An oversized AC compressor will tend to cycle on and off more frequently than a properly sized one, reducing its efficiency. (The thermostat controlling the unit is "satisfied" more quickly by the supply of conditioned air, thereby short-cycling the equipment.)
Frequent cycling will also tend to make the indoor temperatures fluctuate more, and result in a less comfortable environment. (Possibly requiring reheating of the supply air, either by use of a reheat coil adjacent to the chiller coils, or in the form of a "terminal reheat" coil, installed at or near the point of discharge into the occupied space.) This cycling would also tend to wear out the compressor and electrical parts more rapidly.
Another symptom/pitfall is decreased moisture (humidity) removal, due to the frequent cycling, and short-runs. The air passes over the chiller coils and drops in temperature, but the contact time with the coils is too brief, and little condensation has the chance to form. In humid climates, removing moisture is essential for acceptable comfort.
Most heat loads contain both "sensible" and "latent" heat. (Do a google search for those terms). As sensible heat is removed from the air, the supply air temperature drops. As latent heat (aka "humidity") is removed from the air stream (via condensation on the chiller coils), the temperature remains constant as the moisture in the air is removed and goes down the drain. Humidity is often referred to as the "latent heat load". Latent heat removal can be improved via modifying the rate at which the air passes over the chiller coils, via installation of a variable speed blower.
I am an engineer for production boat builder (250 units a year), the only one I might add. My expertise is not with aircon, but I sort of remembered the physics of the problem. Our production foremen and managers all think all engineering is a waste of time. "Just throw a bigger ________ (fill in the blank) at it" is always their answer. I just wanted to make sure I have all my facts.
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