by Jim Hinshaw
As they say in Texas, we have a “Blue Northerner” coming toward us. OK, so not sure if they say that anywhere, but a cowboy once used that expression, and I have been looking for a chance to use it for a decade or more. What it means is, we have clouds forming, a storm is brewing that will bring change upon our industry. That storm is in the form of the new efficiency standards, called SEER2. What a great country, when we decide to change a testing procedure, the old system was SEER, the new one is SEER2. Sort of numerically correct.
By now you may be aware, Jan 1st the new standards for efficiency go into effect, will be major change for most of us. By most of us I mean every single manufacturer through most of their lines, almost all air conditioners, most heat pumps, it will be a major overhaul. The coils will be re-designed, condensing units will be new, all must meet the new standards.
Full disclosure: this is not meant to be a final check list, search the internet to get the exact details, since it may change before year end. Couple of lawsuits are pending regarding long term projects in new housing, this will be an opportunity for the companies involved in those.
The country is divided into three distinct areas, go to Contracting Business website, https://www.contractingbusiness.com/residential-hvac/article/21245297/2023-regulatory-overview-new-minimum-efficiency
For a look at the map and further explanation. Let me summarize. A close look at the new testing reveals that the federal government wanted to incorporate the typical fan electrical consumption that would be found in the home installation. A 15 SEER will be a 14.3 SEER2. And so on, the new testing results will lower the efficiency almost a seer point. For the good news, we have different rules for the three zones in North America. In the northern territory, the units produced after Jan 1st, will need to be 14 SEER, which is 13.4 SEER2, up from 13 SEER minimum today. The good news, that territory will be allowed to sell through. Meaning if you have 13 SEER stock, it can be sold after Jan 1st. Not manufactured but sold.
In the Southeast territory, the minimum moves to 15 SEER, which is 14.3 SEER2. No sell through. In the Southwest, the minimum is 15 SEER, again, 14.3 SEER2, but with an added EER minimum rating of 12.2 EER which is 11.7 EER2. No sell though. And this all applies to units up to 3.5 ton. Higher sizes the numbers are reduced, see the final details at the above-mentioned website. Or any major manufacturer website, they all have the details posted.
Here is the reason for this newsletter. To let you know these changes are coming, and fast, the year end is approaching quickly. You need to look at the inventory you have now, plan carefully what you have to install the next couple of months. One major manufacturer has already sent out a message, they will accept non-compliant equipment up till Nov 1st, then it will not be credited back, you will have bought it.
So, what is the penalty for installing a non-compliant unit after Jan 1st, 2023. One site I found said that the fine can be as much as $503. Per unit. And the plan (as for now) is to publish a toll-free number that anyone can call to rat you out. Anyone, including a competitor, a disgruntled employee, angry neighbor, anyone.
What this means to you is that you must be aware of these changes and act accordingly. Watch the inventory levels, be careful on sales quotes during the last quarter of the year, be diligent on how you buy, and finally, let every employee know exactly what is going to happen. The best course of action is to be a close partner with your distributor. Keep them informed on what you have on hand to sell, what you need to order before year end, and let them know you need to be informed on what they are stocking and how if fits the new mandates. If you are in the north territory, the situation is not as critical, but still needs to be considered. If you sell a 13 seer in the northern region and later the homeowner finds out that the unit he just purchased is “obsolete”, even if it was legal and allowed to be sold, it could be a potential disaster on social media.
Now you need an excellent relationship with your suppliers, and they want to be involved with your business and help you navigate these waters going forward. Next up, the new refrigerants, another chance to change your business, but you have a year or so till we start to worry about that. More to come, stay tuned!