A marine air conditioner (which may also be used as a heat pump) has a low volume to cooling capacity ratio, and high efficiency. A blower is connected to a shroud, and within the shroud are a water cooled tube-in-tube condenser coil and a raised lance fin evaporator coil. The condenser coil is mounted between the evaporator coil and the blower so that air is drawn past the evaporator coil, then past the condenser coil, and then discharged by the blower. The shroud and blower are mounted, along with a rotary compressor connected to the coils by refrigerant lines, in a condensate drain pan having side walls of 1.5 inches or more in height and a plurality of widely spaced drain plugs or fittings. The cooling water inlet and outlet for the condenser coil pass through a wall of the shroud, and the inlet is connected to a water pump below the water line of the boat in which the condensate pan is mounted.