Chiller Vs. Cooling Tower: What'S The Difference? August 4, 2026 Chillers and cooling towers are often mentioned together — and for good reason. In many large commercial and industrial cooling systems, they work in combination. But they perform very different functions, and understanding the distinction is essential for anyone working with commercial cooling infrastructure. This is one of the most common points of confusion for those new to industrial and commercial HVAC systems. What Each System Does A chiller produces chilled water (or glycol) — it removes heat from a process or building by cooling a fluid that then circulates to where cooling is needed. The chiller requires the removed heat to go somewhere; in a water-cooled chiller, it goes to condenser water. A cooling tower rejects heat to the atmosphere through evaporation of water — it's essentially a heat rejection device. It receives warm condenser water from a water-cooled chiller and cools it by evaporating a small fraction of that water into the air. How They Work Together In a water-cooled chiller system, both pieces of equipment are required: The chiller cools the building or process chilled water loop, removing heat from the building or process That heat is transferred to the condenser water loop, which flows from the chiller to the cooling tower The cooling tower rejects the heat to the outdoor air through evaporation The cooled condenser water returns to the chiller to absorb more heat Chiller Cooling Tower Produces chilled water for building or process cooling Rejects heat from chilled water system to atmosphere Uses refrigeration cycle (compressor, evaporator, condenser) Uses evaporative cooling — no refrigeration cycle Requires electrical energy to operate compressor Requires electrical energy only for fans and pumps Can be air-cooled (no cooling tower needed) or water-cooled Only needed when a water-cooled chiller is used Located indoors or outdoors depending on type Located outdoors; requires water supply and makeup "The simplest way to explain it: the chiller is what makes cold. The cooling tower is where the heat goes. Most large buildings need both if they're using a water-cooled chiller — but air-cooled chillers don't need a tower at all."— Justin Thomas, General Manager, G&D Chillers Air-Cooled Chillers: No Cooling Tower Required Many commercial and industrial facilities use air-cooled chillers — units that reject heat directly to outdoor air through condenser coils and fans, without any water or cooling tower. Air-cooled systems: Are self-contained — no cooling tower, no condenser water system, no water treatment Are simpler to install and maintain Are lower in upfront cost for most applications Are less energy-efficient than water-cooled systems at large scale, particularly in hot climates Are the most common choice for commercial HVAC and industrial process cooling at most scales When Is a Cooling Tower Justified? Cooling towers add cost and operational complexity (water treatment, basin maintenance, Legionella risk management). They're justified when: Scale is large enough that water-cooled efficiency premium exceeds the cost of the tower infrastructure Outdoor space or airflow constraints prevent adequate air-cooled installation Application has very high energy costs where efficiency improvements have large financial value Frequently Asked Questions Do all large commercial buildings use cooling towers? No — many large commercial facilities use air-cooled chillers without cooling towers. The choice depends on scale, efficiency targets, local water costs, available outdoor space, and first-cost vs. operating cost tradeoffs. Both approaches are widely used in large commercial buildings. Can a cooling tower operate without a chiller? A cooling tower can reject heat from non-chiller applications (industrial process water cooling, condenser cooling for non-chiller refrigeration equipment), but it cannot produce chilled water on its own. For applications where the required leaving water temperature is achievable through evaporative cooling alone (typically above 70-75 degrees F), a cooling tower can serve without a chiller — this is sometimes called 'free cooling.' > Explore G&D's air-cooled chiller solutions that eliminate cooling tower requirements -> Contact us