There’s been a lot of talk recently regarding a national decarbonization policy. So, take a second and imagine a world where that policy is implemented. What does it look like? Does it make things better for HVACR contractors? What about those servicing more than one state? What overall impact could it have? Or is it all just part of some political agenda?
Whatever the mindset, decarbonization efforts are rapidly impacting the HVACR industry. In April, the U.S. Department of Energy (DOE) released, “Decarbonizing the U.S. Economy By 2050: A National Blueprint for the Building Sector.”
The goal of this blueprint: to reduce greenhouse gas emissions from U.S. buildings by 65% come 2035, and a 90% reduction when compared to usage in 2005.
Policy Possibility
Will a national policy actually happen?
“The likelihood that anything will come on a federal level — which we'd really like to see like we did with the AIM Act and Kigali as well as the prior appliance energy efficiency requirements — is rather unlikely with the current dysfunctional Congress that we have in the ability to get anything through,” said Steve Yurek, president and CEO of the Air-Conditioning, Heating, and Refrigeration Institute (AHRI).
Which is why the HVAC industry is only seeing enforced decarbonization efforts at a state level (think California, New York, Maine, Washington). To some, that’s not enough.
“We continue to advocate that this cannot be solved on a state-by-state or local basis; it really needs a national or even a global solution, because all it does is potentially transfer emissions from one area to another depending upon how they go about it,” said Yurek.
It seems that on one end of the national decarbonization policy are those who feel that implementing one is worth the investment, and on the other are those who just aren’t buying it.
When Barton James, CEO of the Air Conditioning Contractors of America (ACCA), hears “national decarbonization policy” he thinks it sounds like someone’s campaign speech.
“If you had it, you’d put together a plan, and the plan would work from the logic that’s in place,” James said. “And we don’t have that, so to me it’s just a talking point or somebody’s political agenda.”
Yet that’s not to say that what’s been achieved in terms of decarbonization doesn’t deserve appreciation, considering that today there is a worldwide market for its efforts. That being said, those who might be wary of a national policy aren’t unsupportive of sustainability.
After all, for the most part, the HVAC industry as a whole has sought solutions that meet the heating, cooling, and comfort needs of customers in order for them to have a safe and productive life long before something like a national policy was even ever discussed — and it’s sought to meet these needs while using less energy.
“But, at the end of the day, our systems in the U.S. remain unique the rest of the world … we have, for the most part, things like ducted systems, much larger refrigerant charges, systems that are unique in terms of how they need to be maintained … and I think that's great, because that means the contractors can continue to be important,” James said.
While an implemented national decarbonization policy (whether found successfully implemented or not) would affect most of the HVACR industry, those who service two different states would find themselves in a unique position.
Specifically, Ben Kelley, director of operations at CroppMetcalfe said a national decarbonization policy would impact the company’s boiler, water heater, and gas furnace markets, as well as standby generators. The company services the HVAC, plumbing, and electrical (to name a few) needs of areas of Virginia, Maryland, and Washington D.C.
“The Mid-Atlantic is a large furnace and gas water heater market, and it would lead to a drastic change for our customer base,” Kelley said. “The education for the customer would be arduous” — especially since many customers already don’t know what their systems run on or how they do so in the first place.
“They assume the decarbonization movement won’t affect them,” Kelley said. “They have a lack of understanding of how heat pumps operate and what they possibly would be losing in performance and comfort.”
In reality, how a national decarbonization policy could affect an HVAC business is a million-dollar question. But if it were achieved, it might mean a massive push toward heat pump technology and geothermal in colder climates, and an increase in ductless splits and nontraditional whole-house comfort systems.
“This would be ever-evolving, dependent on the policy,” Kelley said. “If all gas appliances are banned, then it would be a push to the things listed above while still trying to maintain a customer base dependent on natural gas until it dies. Heat pumps to replace boilers don’t seem overly plausible at the moment. I have seen no answer for standby generators.”
Implementation?
If a national decarbonization policy is never achieved, dictation of decarbonization requirements will continue to fall to the states.
“So you would have some areas where gas equipment continued and some areas where it didn’t,” Kelley said. “This would be awkward for companies serving both types of areas.”
For a national decarbonization policy to not only be implemented but be accepted by the entire HVAC industry and the world around/within it, it’s going to require a lot of things, and take a long time.
James said he thinks it’ll take a roadmap that people on both sides of the political spectrum can get behind. But he also argues that if it were implemented, it likely wouldn’t have a real-world effect, since there isn’t enough enforcement or general focus on basic things like licensing, continuing education, or how refrigerant is recovered and who is allowed to purchase it.
“Right now, we have some public sentiment and support for [a national policy], but it’s just from people on one side of the political aisle,” James. “As exciting as aspects of the Inflation Reduction Act (IRA) were, it was done in the laziest way possible: in a partisan manner. And it should’ve been done in a bipartisan manner, but in our political climate, no one wants to give something to someone else.”
If the national decarbonization policy continues to be approached that same way, and those behind it aren’t doing any real legislative and relationship work, James said it’s a “non-starter” because it’ll continue to be just another political tool in someone's tool chest.
Kelley said at a minimum, regionalization would make more sense. But for a national decarbonization policy to really work, technology would have to keep advancing.
“Heat pump technology would need to continue to progress to allow for colder climates to still be comfortable,” Kelley said. “Electric water heaters and heat pump water heaters would need to be able to perform at the same rates current gas water heaters do.”
But with an increase in technology (not to mention the increase of investment of resources that would be divested to a national policy) comes additional cost to the consumer.
“For the entire industry to accept it would take great technological improvements in both commercial and residential equipment … It would take an increase to the electric grid to be able to handle the load,” Kelley said. “Investment in infrastructure will be required and will take a lot of time.”
Right now, though 100% electrification is what a lot of the world is striving for — whether it’s in 2035, 2040, or 2050 — the rest of the world can’t get behind it if they don’t understand it. So, whatever happens with the national decarbonization policy, one thing that does have to continue, in regard to sustainability and decarbonization, is education.
“Educating consumers on what those availabilities are and how that impacts them,” Yurek explained. “I think we need to really look at how we move consumers to a place that they get what they need in heating and cooling, while at the same time reducing their energy bill and the impact on the environment. A lot of those solutions today are really hybrid solutions where you move to installing a heat pump, rather than an air conditioning system, and then use that heat pump to provide cooling and then heating … and then have the supplemental heating for those really cold days by either a furnace or a boiler.”
