by Jim Hinshaw
Excuse the title, winter is almost over in most of our markets. But what isn’t over is the government getting into our business. Here are some specific details that impact our industry.
First, the new energy efficiency standards will be effective Jan 1st, 2023. What is unusual is that certain areas of the country will be treated differently. The North will have the advantage: you can install any products that meet existing standards and were built prior to Jan 1st. We call that sell-thru, you can install your units in inventory. The South and Southwest are in a different category, you cannot install any products that don’t meet the new standards after Jan 1st. So you will need to keep a careful watch on your inventory.
Additionally, part of the new energy efficiency standards (according to ACCA) for the South and Southwest is to log your purchases by date and install address, distributor purchased from and customer contact info. For up to 4 years. This will be another level of record keeping that will require some money and time from the selling contractor.
All this leads me to the following conclusion: time to update your pricing and watch your inventory. I realize the message this last couple of years has been to stock up, since we have no idea when products will be available. That is still the case but be very careful what you are stocking up on. If in the South/Southwest, I would increase stock on high efficient systems only, the entry level may not pass the new standards.
What this means is that you must have a great relationship with your partner who sells you stuff (also called your distributor). They can give you guidance as to the information needed to record for the new energy standards, as well as what their equipment can achieve, what can work in your market. Remember, they will be under the mandate as well, cannot sell old products that fail to meet the new standards in some areas of the country. Increases the reason to have a great working relationship.
We are facing the new energy standards, that will take some concentration, but we also have another opportunity for growth in the next few years. There is new federal legislation coming up requiring us to move away from R-410. A couple of solutions are on the table, Daikin has R-32 available soon, and Carrier has brought R-454B to the industry. There may be more, too soon to say. These will both be in systems starting in 2023, at least that is the current time frame.
How will this affect us? We will need additional training, may need new gauges, and certainly train our service staff on how to answer questions about the new products and refrigerants. I can recall a few years ago having a conversation with my dermatologist about efficiency. He had a rental property that he had installed a new heat pump air handler on a 20-year-old outdoor unit. Had trouble with the system every year. Surprise. I told him it did not have a chance to work correctly, and if it ever needed refrigerant he would be in for a nasty surprise.
He asked me why. I replied that the refrigerant used in that system (R-22) was being phased out, it was already out of production, soon there would be none available. He asked what he should do then. I said he would need to replace the system, not just part of it. Why? Cause the new products are not compatible with that old refrigerant, our government has made that decision to help solve the environmental concerns with chlorine-based refrigerants.
He just could not wrap his head around the fact that his system was obsolete. He is a doctor, and certainly had more schooling than I did, and more than most people alive. I am confident that you have customers in your market that may not believe you when you say you can’t get a certain part or refrigerant, or even a system these days. So help your team be confident with some skills enhancement. We like that term more than role-playing. That is how adults learn, by working thru an objection they may find in the marketplace.
Is there anything you can do to help work thru this opportunity? Yep, go to the ACCA Government relations page, send a message to your representatives, tell them to vote for allowing “sell thru”.
https://www.acca.org/advocacy/government-relations
Thanks for listening, we’ll talk later.
