First of all, an air cooler uses air and hot water to cool the rooms while the air conditioner uses a compressor like the one present in the refrigerator to carry out the cooling process. In fact this is the most prominent difference between the two appliances.
Climate of the region is largely important for the air cooler to function well. For instance, air coolers work best in hot and dry weather conditions while the air conditioners works well in all weather conditions. Here it needs to be noted that the cooler has the power to add moisture to the air and so it is a useful appliance during the winter season.
As far as the energy efficiency is considered, air coolers use far less energy when compared to air conditioners. In fact HVAC experts are of the opinion that the use of energy by air coolers is around 75% less. This means if an air cooler is used the amount of savings on utility bills will be considerably high. The reason as to why the use of energy is lesser because the cooling takes place naturally and so only little extra energy is required for the creation of the cold air and the only mechanical parts that use electricity are the fan and the water pump. On the other hand air conditioners have more number of mechanical parts than the air coolers. Air conditioners have mechanical components like the compressor, two fans and two set of coils and all of them require electricity for their operation.
Another difference between the air coolers and the air conditioners lies in the way they are installed. The air coolers are small in size and can be easily installed both inside and outside the house; while air conditioners are cumbersome appliances that need to be installed either on the windows or on the walls for them to function properly. Hence, it can be said that air coolers are more flexible than the air conditioners.