Focus Energy in the Right Place During Regulatory Changes
Tick, tock … the countdown for the Department of Energy’s regulatory changes are quickly coming upon us, and the regulations just keep stacking. New laws have been enacted — for example, as of June, the Defense Production Act went into effect declaring that noncondensing indoor gas furnaces would be phased out beginning in 2029. There are two more acts waiting for legislation: the ICEE HOT Act of 2022 will reduce residential building greenhouse gas emissions and increase energy security by incentivizing electric HVAC equipment, water heating, and other home appliances across the supply chain; and the HEATR Act of 2022, which aims to establish upstream incentives for manufacturers to transition production to heat pumps. Plus, the HVACR industry is on the brink of yet another refrigerant phasedown — R10A is effectively eliminated in January, and the refrigerant transition is complicated by the fact that it is occurring on a state-by-state basis, which leads to more confusion. Collectively, there is a lot to wade through, but you can see that all roads are leading to electrification and the highest efficiency equipment. Ready or not, this massive push is coming.
To start, let’s look at what got us to this place — the place where a government agency has to step in to regulate our industry. There’s no denying the industry faces a mix of consumer, contractor, manufacturer, and environmental challenges, but I keep reiterating these known truths:
In North America, 80% of replacement sales are made at the time of a breakdown. There are currently over 260,000 technicians just in the United States; this means that there are over 260,000 opinions on diagnostic processes, equipment replacement, and equipment efficiency. With a technician making a manual recommendation, U.S. consumers purchase the lowest efficiency replacement model available 81% of the time. And, the final truth is that residential HVAC is the No. 1 contributor to the global climate crisis. This is why we are now faced with imminent change.
If we’re honest, the only thing consistent about our industry is inconsistency. There is no one standard model for technicians — hence the 260,000 variances in opinion. Inconsistent application of the known best practices leads to poor field recommendations, poor consumer experiences, and an overall mistrust of the industry. If we don’t address the consumer experience and the overwhelming desire for transparency, then there is zero way that you can effectively navigate these upcoming changes or be able to explain to your customers why this is the time for a “more affordable” replacement system; why pricing and standards will change in January; why if you have a heating and cooling system and one appliance breaks down, why the whole entire system needs to be replaced. If they don’t trust you, they won't believe you.
There are really three areas you need to be focusing your energy on for the coming changes...
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Article by: Darren Dixon, AHCR News
