19 Oct 2021

Editor Introduction

A long list of regulatory and environmental trends is determining the future of the HVAC industry. Some trends will have an immediate impact, while others will come in force years from now, although the complexity of the industry requires that manufacturers and installers start planning now. We asked our Expert Panel Roundtable: What regulatory or environmental trend will have the greatest impact on the HVAC market?

The regulatory trend that will most impact the HVAC industry in the coming years is the refrigerant transition and the implementation of the AIM Act phasedown, which is set to start in 2022. Everyone involved in the industry – manufacturers, contractors, end users – needs to be aware of this transition because its impact could be felt on the ground as early as 2024 when the EPA is scheduled to reduce the amount of available HFC refrigerant by 40% from its baseline. Many state and local building codes likely will not be updated by then to allow for A2L refrigerants, creating the potential for a HFC supply shortage as the EPA begins its phasedown in earnest before the industry is ready to transition to A2Ls. Currently, the industry is working with the EPA as it develops its baselines and allocation rules to avoid this scenario as well as with state legislatures to make sure building codes are updated in time.

As R-22 refrigerant continues to be phased out in the U.S., prices for refills will continue to increase – this summer we saw prices as high as $150/lb, which doesn’t include labor costs or possible additional EPA fees. As of January 2020, R-22 can no longer be manufactured or imported into the US, which means supplies are finite and costs will continue to increase every year until supplies are depleted.

Eric Dubin Mitsubishi Electric Trane HVAC US

We’re seeing renewed commitment and investment in programs meant to boost heat pump adoption at federal, state and local levels. These developments increase opportunities for Mitsubishi Electric Trane HVAC US and other all-electric, energy-efficient HVAC equipment manufacturers. As a general practice, we design our products with consideration for existing codes and standards as well as likely future requirements. This extends the lifecycle of our products and is an essential aspect of how they contribute to sustainability overall. The phaseout of hydrofluorocarbons (HFCs), essentially lowering their use and production by 85 percent over the next 15 years because of The American Innovation and Manufacturing Act (AIM), will certainly have an industry impact. Upgrades to power grids with an emphasis on renewable energy production, cost reductions in clean energy technologies and tax credits and rebates will continue to affect the HVAC market.

Paul Scriven HDR | Hurley Palmer Flatt

The United Kingdom government’s proposed changes for 2025 and 2030 require buildings to be sold or let to have minimum energy performance certificates (EPCs) of a ‘C’ and then a ‘B’ rating respectively.  In addition, by 2028 all tenancies will be required to achieve an EPC ‘C’ rating with associated noncompliance penalties increasing up to £150,000. Historically EPCs are assessed on the latest version of Part L software in place at time of assessment. Combined with the on-going link of Part L carbon factors to the decarbonization of the grid, gas-reliant HVAC systems are under scrutiny as electricity dips below that of gas equivalent. This is seeing a wholesale move away from gas to all-electric solutions. The impact of forthcoming Hydrogen fuel networks is yet to be seen as it is too early to determine the viability of hydrogen-based installations.

Editor Summary

Refrigerant transition is at the top of the list of regulatory trends that will impact the HVAC market in coming years. A major environmental trend is the transition to all-electric equipment. In the United Kingdom, energy performance standards are directing the course of the ongoing transition from gas to electric solutions. Technology innovation within the industry will equip HVAC professionals with the tools they need to meet the challenges.