In the year 2016, varying regulations impacted the HVAC industry. Three main, key issues that impacted most contractors, manufacturers, distributors, and organizations included the 92 percent mandate, regional standards enforcement, and the U.S. Environmental Protection Agency’s (EPA’s) Significant New Alternatives Policy (SNAP) refrigeration alternatives. Let’s examine the current state of these regulations and what the future holds.

92% MANDATE

On Feb. 10, 2015, the U.S. Department of Energy (DOE) issued a pre-publication Federal Register notice of proposed rulemaking (NOPR) proposing to raise the minimum AFUE performance for nonweatherized gas-fired furnaces and mobile home gas-fired furnaces from 80 percent AFUE to 92 percent starting January 2021. These standards will effectively ban the manufacture of noncondensing furnaces. While the due date for comments ended on Jan. 6, 2017, the industry is anxiously awaiting comments from the country’s new leadership.

“This could be a rule that won’t be completed or finalized under President Trump,” said Karim Amrane, senior vice president, regulatory and international policy, Air-Conditioning, Heating, and Refrigeration Institute (AHRI). “We don’t know yet where this is going.”

Cost, size, and remodeling requirements remain significant factors.

Jon Melchi, vice president of government affairs and business development, Heating, Air-conditioning, and Refrigeration Distributors International (HARDI), said cost is certainly a major factor with this regulation, because higher-efficiency furnaces often have to be vented in a certain way because there is water involved.

“Let’s say I live in a condo or apartment in an older housing complex; it’s going to take construction of some sort on the contractor’s part, which could be challenging. To accomplish this, costs are going to increase for homeowners.”

Melchi continued, “If you live in downtown Detroit, Boston, or New York City, where they have a lot of old buildings, this could become very expensive in those types of urban areas. If these furnaces aren’t vented properly, a health safety issue could occur.”

Another issue with construction concerns is installing these units in multifamily units or mobile homes, where the size of these units may be an issue as multiple-family units and mobile homes may not be able to accommodate this larger equipment. “To get more efficiency, you do so through sizing,” said Barton James, senior vice president of government relations, ACCA.

Not only will contractors and consumers be affected, manufacturers will also be making adjustments, said Melchi. “These [high-efficiency] products will require manufacturers to redesign furnace platforms.”

In June 2015, 121 members of the U.S. House of Representatives sent a letter to DOE Secretary Ernest Moniz urging him and his agency to reconsider the DOE’s recent proposed 92 percent AFUE nationwide residential furnace standard. 

Several industry organizations — including ACCA, AHRI, and HARDI — filed comments regarding the economic and legal ramifications of the proposed standard during the public comment period. From Trump’s decision to a potential lessened percentage, the rule is clouded with uncertainty. “We don’t know the percentage that will be in the final ruling, but we do know the cost will be passed onto the consumer, as the real cost is in installation,” he said.

REGIONAL STANDARDS

The Residential Appliance Standards for Central Air Conditioners, Furnaces, and Heat Pumps — more commonly recognized as regional standards — were introduced Oct. 26, 2011. The DOE divided the country into three regions: North, South, and Southwest, with the minimum efficiency requirements vary by type and area. The new rules for nonweatherized furnaces became effective May 1, 2013, and for weatherized furnaces, central air conditioners, and heat pumps on Jan. 1, 2015. 

For the Northern region, comprised of states with population-weighted heating degree days (HDD) equal or greater than 5,000, split air conditioners are required to perform at 13 SEER and gas furnaces are required to possess an AFUE rating of 90 percent or more.

In the Southeastern region, comprised of states with population-weighted HDD less than 5,000, split air conditioners are required to perform at 14 SEER and gas furnaces are required to have an AFUE of 80 percent or more.

In the Southwestern region, split air conditioners are required to be 14 SEER/12.2 EER and 14 SEER/11.7 EER.

The enforcement schedule, effective July 1, 2016, requires contractors retain records for 48 months after the date of installation, distributors retain records for 54 months after the date of sale, and manufacturers retain records for 60 months after the date of sale on each split-system central air conditioner condensing unit and single-package central air conditioner (see the Regional Standards Enforcement sidebar for more information).

Last year marked the first year the industry was forced to abide by the enforcement guidelines accompanying the government’s regional HVAC efficiency standards.

“Contractors are adapting well to the new recordkeeping requirement,” said James. “We are keeping records and contractors are keeping records. Everything is in place.”

Only six months into its existence, perhaps it’s too early to know if it’s working, said Amrane. “We’re okay with the DOE requirements, but haven’t received feedback yet in the field,” he said. “It’s too early to see if things are working properly. We supported what ended up being agreed upon.”

However, some in the industry view this as a hindrance.

“There is a cost to the industry with people having to update their recordkeeping systems to comply with the DOE’s enforcement plan,” commented Melchi.

Butch Welsch, owner, Welsch Heating & Cooling, St. Louis, said he believes the industry is buried under too much regulatory tape.

“We need no more regulations regarding unit efficiencies, especially for furnaces. There are far too many variables involved in the installation and venting of furnaces for any type of additional national standards to be invoked,” he said. “The government should just let the industry and the market dictate efficiencies of equipment.”

But not everyone feels this way. According to the DOE, in a brochure the organization created for homeowners and contractors, these new standards will benefit customers and result in a significant reduction of CO2 emissions.

“Some types of central air conditioners will have to be more efficient than previously required. New air conditioners might be more expensive, but the use of a more efficient model means you will save more on every utility bill. For example, the typical utility bill savings resulting from the regional standard in the warmest climate (hot-dry), on average, is $320 over the lifetime of the air conditioner,” stated the brochure.

And, according to the DOE, the environment will also benefit from these units.

“The estimated number of carbon dioxide emissions that will be avoided as a result of these new standards for central air conditioners is 50 million metric tons.”

The contracting community has mixed feelings on the rule and its subsequent enforcement schedule.

Paul Sammatoro, owner, Samm’s Heating and Air Conditioning, Plano, Texas, is all for all three regions in the country being based on degree days.

“It is not economical or fair to impose a minimum efficiency rating on a condensing unit in Wisconsin the same as in Texas. This saves consumers money upfront and improves their returns on investment (ROIs).

Furthermore, Steve Moon, owner of Moon Air Inc., Elkton, Maryland, believes the rule helps to justify different areas’ needs. “I believe the divided regions work well in most cases,” he said. “Creating efficiency rules based on expected run hours is a good idea. There is no reason for the folks in Florida to install high-efficiency furnaces when they run only a few hours a day. The same is said for the folks in Minnesota and high-SEER air conditioners. The regional system, I believe, adds a little common sense to our changing industry.”

SNAP REFRIGERANTS

The U.S. Environmental Protection Agency (EPA) has finalized two rules designed to reduce the projected growth and emissions of hydrofluorocarbons (HFCs).

In the first rule, under Section 612 of the Clean Air Act, the EPA’s Significant New Alternatives Policy (SNAP) program is:

• Adding to the list of “climate-friendly” chemicals for use in the refrigeration and air conditioning and fire suppression sectors. (Propane has been added as acceptable in certain new equipment, subject to use conditions);

• Listing several new substitutes as unacceptable in specific end uses in the refrigeration and air conditioning sector; and

• Changing the status of a number of substitutes that were previously listed as acceptable in the refrigeration and air conditioning and foam-blowing sectors.

The EPA said that in each instance where it is listing a substitute as unacceptable or changing the status of a substitute from acceptable to unacceptable, EPA has determined that there are other alternatives that pose lower risk overall to human health, the environment, or both. This rule, according to the EPA, will result in environmental benefits from avoided HFC emissions of up to 7 million metric tons of CO2-equivalent (MMTCO2eq) in 2025, equal to the greenhouse gas emissions from 1.5 million cars in one year.

Additionally, the EPA introduced a second rule in which it strengthened the refrigerant management program under Section 608 of the Clean Air Act and extended the regulations to non-ozone depleting substitutes, such as HFCs and other substitutes. This action is designed to reduce emissions by lowering the leak rate at which large air conditioning and refrigeration appliances must be repaired and incorporating industry best practices, such as verifying repairs and conducting regular leak inspections on leaking appliances. In addition to the benefits for the ozone layer, the EPA estimates the refrigerant emissions avoided from this rule will be more than 7 MMTCO2eq annually.

The new leak-rate thresholds that trigger the duty to repair refrigeration and air conditioning equipment containing 50 or more pounds of refrigerant are:

• Reduced from 35 percent to 30 percent for industrial process refrigeration;

• Reduced from 35 percent to 20 percent for commercial refrigeration equipment; and

• Reduced from 15 percent to 10 percent for comfort cooling equipment.

The rule changes also require owners/operators to submit reports to the EPA if systems containing 50 or more pounds of refrigerant leak 125 percent or more of their full charge in one calendar year.

In addition, substitute refrigerants — even those that are non-ozone depleting — are to be treated the same as ozone-depleting refrigerants. Beginning Jan. 1, 2018, only certified technicians will be able to purchase substitute refrigerants. The rule change, however, does not require recertification of technicians who are already 608-certified.

“These two rules demonstrate the United States’ continued leadership in protecting public health and the environment,” said EPA Administrator Gina McCarthy. “We are reducing emissions of HFCs that are harmful to the climate system and showing the world we can do this responsibly and thoughtfully by working with businesses and environmental groups.”

In a recent Emerson Climate Technologies Inc. webinar, Dr. Rajan Rajendran, vice president of the system innovation center and sustainability, Emerson Climate Technologies, updated attendees on the types of commercial refrigeration equipment affected by the new SNAP rules and provided advice on how to proceed.

“The EPA, using its SNAP ruling, came out with a delisting or change of status rule in July 2015. For supermarket, remote condensing unit, and stand-alone applications, different refrigerants were deemed unacceptable. As of Jan. 1, 2017, you are unable to use 404A and 507A in new equipment. After that, in September 2016, a second change-of-status ruling came out that included a series of approvals, including the approval of propane in self-contained ice machines, commercialized machines, and water coolers as well as a few other applications. R-407C and -410A will not be allowed in positive displacement chiller or rooftop chiller applications after Jan. 1, 2024.

“Additionally, dispensing equipment — slushees and ice cream machines — which typically use 404A or 507A must find alternatives as these refrigerants will be eliminated as of Jan. 1, 2021.”

In addition to the EPA’s SNAP rulings, many regional refrigerant activities are taking place, including the European Union’s (EU’s) F-gas regulations, California’s Air Resources Board (CARB), and Environmental Canada’s greenhouse gas emissions reduction proposal. Many of these current regulatory proposals target 150 GWP for refrigeration and approximately 750 GWP for a/c applications.

A global agreement, like the Kigali Amendment, can help eliminate the patchwork of refrigerant regulations, said Rajendran.

“Safety standards and effective building codes are being updated regularly, and there is a lot of activity going on at the federal level,” Rajendran said. “The DOE, AHRI, and ASHRAE have formed a $5.2 million partnership to study flammable refrigerant behavior in real-world applications, and it’s also important for us to pay attention to what’s going on globally in all cases.”

During the webinar, various companies proposed various refrigerant alternatives to comply with the SNAP program. Honeywell Intl. Inc.’s  L41Y and L41Z were promoted as replacements for R-410A in stationary air conditioners.

“We have two options that are mildly flammable, L41Y and L41Z, which have a GWP around 700 that boast a very good mesh in capacity and efficiency,” said Dr. Samuel Yana Motta, director of technology, Honeywell.

Matt Ritter, global business director, fluorochemicals, Arkema Inc., said a number of alternatives exist, including Arkema’s R-457A, ARM-42, and R-459A.

“We’re pivoting to the future and focusing on these candidates as they have a GWP of less than 150,” he said. “R-457A, which has also been identified as ARM-20a, has undergone significant testing, and, in this material, we see efficiency significantly higher than 404A with a very similar discharge temperature. When it’s used as an R-22 replacement in a/c, we see higher efficiency there, as well.

“We’d be targeting applications in stand-alone refrigeration, supermarkets, packaged rooftop units, and split systems with this material,” Ritter continued. “This is our universal replacement for 404 and R-22 due to its use in a/c and refrigeration sectors.”

Melchi said he understands the EPA’s reasoning for the change in statuses, but questions how the rules were implemented.

“[These SNAP changes] were implemented in a haphazard way and issued at the whim of the agency,” he said. “We feel they should give manufacturers and distributors a distinct time, such as, ‘We are going to do this within a 15-year period,’ rather than, ‘We want you to use this refrigerant, so, on January 1, you are not allowed to use this other refrigerant anymore.’ That has made things challenging.”

On the other hand, James feels this will put a positive spotlight on the HVAC industry.

“The exciting part for the industry, though it’s a little scary, too, is how this is spotlighting the importance of safety. Regarding installations, hopefully this will change safety concerns and end up benefiting consumers in the end.”

For more information on the EPA’s SNAP rulings, visit http://bit.ly/EPA-608 or http://bit.ly/EPA-SNAP.

Publication date: 1/23/2017

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