EPA mandate to boost HVAC costs

Jeremy Grisham: Manufacturers will still honor 10-year warranty for older HVAC units.

Mike Polino: Several new systems have been sold.

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An Environmental Protection Agency mandate set to take effect in January is aimed to improve energy efficiency for air conditioning units. However, it will come at a price – up to 10% more for consumers, local officials say.

The HVAC refrigerant mandate is a part of the EPA’s Technology Transitions Program, which limits the use of high global warming potential chemicals called hydrofluorocarbons, or HFCs.

In addition to regulating air conditioning units, the mandate addresses aerosols, foams, refrigeration systems and heat pumps.

Starting Jan. 1, 2025, manufacturers will be required to change the refrigerant used in their air conditioners. Refrigerants are the fluids used in AC units that absorb heat and produce cold air.

The EPA will require residential air conditioning units to use refrigerants with a global warming potential, or GWP, below 700. Current air conditioners use R-410A, a refrigerant with a GWP of 2,800. Refrigerants R-454B, with a GWP of 465, and R-32, which has a 675 GWP, will be the new standard used in units manufactured in January and beyond.

While the idea is to make systems better for the environment, it’s also making them cost more, said Jeremy Grisham, president of SS&B Heating and Cooling Inc.

“The big thing that people are going to see is it looks like somewhere around a 10% increase in cost with the new refrigerant,” he said, noting air conditioners for homes typically are priced between $5,000 and $8,000. “So probably a $500-$800 increase on average. The commercial units, I just haven’t seen much pricing on those yet, so I don’t really know. Manufacturers have been slow to release the pricing.”

According to the EPA, the new refrigerants are expected to be cheaper for manufacturers and more energy efficient, potentially lowering monthly bills for consumers.

“We work with a lot of homeowners, so customers have a lot of questions. Once we talk to them, there’s not really a major effect,” said Mike Polino, owner of Lorenz Plumbing, Heating and Air Conditioning Inc.

He added consumers are not required to upgrade by 2025 and can still get current units serviced as long as there’s available equipment. Polino said the average residential install for his company is roughly $8,200, while commercial jobs range $10,000-$50,000, based on the system sizes. He expects price increases will land between 6%-10%.

“Big thing is we want to be sure that everybody understands there is no (liquid petroleum) gas or propane gas in this refrigerant,” he said of the new options. “That kind of has been going around that there’s LP gas in it.”

For those wanting to transition to equipment with the new refrigerant, there could be a wait, both Polino and Grisham said.

“Every manufacturer takes upon themselves to decide when they’re going to switch their manufacturing plants over from the old equipment to the new equipment, which is just a personal preference with their dealer for how they see their stock flow changing,” Polino said. “It’s just a question of when do you want to have your biggest problem of gaps in your products. Most people chose for the fall to get that transition to occur when it’s in the offseason.”

Polino said his company already has its orders in and expects to see its first units arrive in the next few weeks. He estimated HVAC jobs comprise around 55% of the workload for the business.

“We already have quite a few systems sold and we’re just waiting on the equipment to come in,” he said. “We’ve already been trained on it. It’s not a big change. We already have safe practices and there are minor things that we will have to do differently. However, if you already have safe practices that you follow, you’re not going to see a big difference.”

Grisham said manufacturers must walk a tightrope to be sure they have produced enough units to meet this year’s demand for units still using 410A refrigerant, while also switching over to assemble the new units.

“There’s obviously governmental regulations in their manufacturing process that they have to check the boxes on,” he said.

The transition by consumers to the newer units may be a lengthy process, Grisham said.

“The 410A units that we’re selling this year, they’re going to be a little less expensive than the new ones,” he said. “But if you have to have major repairs done on them through the course of their life, it may be more expensive to have those repairs done as that refrigerant becomes less and less in demand.”

Equipment for the 410A units will remain available through the 10-year warranty period, according to officials.

“The manufacturers are required by law to continue to manufacture components for those units through the life of a warranty,” Grisham said. “So, for the next 10 years, they’ll still be making parts for them and the refrigerant will still be there. It’s just going to get more and more expensive as it becomes more and more scarce.”

Both residential and commercial clients will have the opportunity to continue purchasing the older units into at least next year.

“It can still be sold; it can still be installed. It just can’t be manufactured,” Polino said. “But I would put a 410A system in my house today or my sister or anybody’s home right now and have no problem telling them that they can expect having no issues going forward until the life of that system is done.”