How Do Changing HVAC Regulations Mirror a Game of Monopoly?

Have you ever played Monopoly with an eight year old? If the answer is yes, then you probably have experienced something like what playing games with my younger brother used to be. Growing up, anytime I started winning, my brother would begin trying to convince me that I was somehow violating the rules, when in reality, he was trying to make up his own rules in order to win. Naturally, I didn’t let that deter me from abiding by the rules of the game and beating my little brother, who is 14 years younger than me, despite the likelihood that he would stomp out of the room upset.

Since the oil crisis of 1973, when the United States experienced a significant economic strain due to the lack of available oil, we have been impacted by a plethora of rule changes regarding the HVAC equipment that can be installed in homes. Sometimes it can feel like the regulating bodies in charge are making up their own rules to win; however, the important thing to remember is that the intent behind these rule changes is to protect the earth’s environment and the people living on it.

While you might conclude that we are at the mercy of a political endgame, if you want to beat your competition, it is important to get comfortable with these regulatory changes ASAP! The three most imminent transitions that we are facing are the 2023 minimum efficiency changes, the electrification trend, and the move to a lower GWP refrigerant in 2025.

2023 Transition

By now, I sincerely hope that you are familiar with the updated minimum efficiency requirements that were implemented on January 1, 2023, but as a reminder, the Department of Energy (DOE) has an obligation to analyze energy usage every six years, in addition to ensuring that units are being tested in the lab under the same conditions that they are operating in the home. Since we introduced regional minimum efficiencies in 2015, that element of the 2023 change was fairly straight forward. However, the SEER2 change to the rule has caused confusion, especially as many major industry players still reference SEER. I encourage you to fully embrace the change to SEER2 in all your dealer facing material and conversations, and the gas mileage analogy might help. Think of SEER as the highway miles and SEER2 as the city miles of your HVAC system. A grasp on the SEER2 concept will help as refreshed product nomenclature, including a SEER2 indicator, is introduced with Allied’s lower GWP products beginning in late 2024.

Electrification Transition

We’ve talked a lot about electrification in recent years, and we will continue to talk about it for the foreseeable future. You can’t hide from heat pumps, remember? While the gas furnace isn’t going away yet, embracing the heat pump now will only serve you well in getting ahead of your competition. The $2,000+ homeowner tax credit opportunity implemented in August 2022, with a nearly 10-year active timeframe, clearly demonstrates that regulating bodies are incentivizing the move to heat pumps. As a response to the tax credit and our sustainability goals, Allied Air Enterprises continues to invest in providing solutions that meet the needs of the industry. This has been demonstrated by offering tax credit eligible matches even with our minimum efficiency heat pump offerings, expanding our heat pump capacity, and offering inverter heat pump technology across all our brands.

2025 Transition

As someone who has been talking to distributors and dealers for the past three years about the 2023 minimum efficiency changes and the conversation consistently getting diverted to the looming refrigerant change, I know this has been on your minds for a while. When talking through the reasons behind the 2025 transition, consider the history of refrigerant changes that led us here. If you recall, the purpose behind the R-22 phase out was to combat the harmful effects contributing to the growing hole in the ozone layer.

As a response, we introduced a hydrofluorocarbon (HFC) refrigerant, R-410A, into residential homes beginning in 2010. While R-410A does not contribute to ozone depletion, it does contribute to extreme weather events due to climate change. As a result, the American Innovation and Manufacturing (AIM) Act of 2020, was signed requiring an 85% phase down of HFCs by 2035. We will experience this phase down in a multi-phase approach beginning in 2025 with the introduction of lower global warming potential (GWP) refrigerants. Most major industry players, including Allied Air Enterprises, will be designing their equipment with R-454B; however, we will also see equipment with R-32 in the industry.

There is much that could be said on the 2025 transition, but the key takeaway is this: R-454B installation best practices will be the same as compared to R-410A, with one addition. A refrigerant detection sensor (RDS) will be required on all R-454B systems, so dealers will need to verify that the RDS is installed and functioning properly.

While at times, dealing with government regulations can feel like playing monopoly with an 8-year-old, the true end goal is to leave the planet better than we found it. To beat the competition and win the three transitions, it is vital to stay up to date and embrace the rule changes.