The U.S. Department of Energy’s (DOE’s) new compliance guidelines, described as the “largest energy-saving standard in history,” will officially impact the commercial heating and cooling industry.

The new standards, announced in 2015, are scheduled to go into effect January 1, 2018 and will change the way manufacturers engineer commercial rooftop air conditioners, heat pumps and warm-air for “low-rise” buildings. like retail stores, educational facilities and mid-level hospitals.

Why? The purpose of the new standard is to improve RTU efficiency and cut energy usage and waste. It’s anticipated that these changes will save property owners a lot of money in the long run— but, of course, the 2018 mandates present some challenges for stakeholders across the HVAC industry.

Let’s look at some of the areas where the HVAC industry will feel the impact of the changes:

Building codes/structure – Building contractors will need to adjust floor plans and structural models to meet the new standards.

Codes will differ state by state – Geography, climate, current laws, and topography will all affect how each state adopts the codes.

Reduced emission and carbon footprint – The DOE estimates that the standards will reduce carbon pollution by 885 million metric tons.

Building owners must upgrade – Upfront costs will be offset by $3,700 in savings per RTU when the owner replaces or retrofits the old equipment.

New models may not look the same – Advancements in energy-efficiency will result in new designs in RTUs.

Increased sales for HVAC contractors/distributors – Contractors and distributors can expect a 45 percent increase in sales by retrofitting or implementing the new RTUs on commercial buildings.

The industry, to its credit, is stepping up. Let’s see how.

A Two-Phase System for HVAC Contractors

The DOE will issue the new standards in two phases. Phase One focuses on energy-efficiency increases in all air conditioning RTUs by 10 percent as of January 1, 2018. Phase Two, slated for 2023, will jack the increases up to 30 percent and include warm-air furnaces, too.

The DOE estimates that raising the bar on efficiency will reduce commercial heating and cooling usage by 1.7 trillion kWh over the next three decades. The massive reduction in energy use will put between $4,200 to $10,000 back into the average building owner’s pockets over the expected lifespan of a standard rooftop air conditioner.

“This particular standard was negotiated with relevant stakeholders, including manufacturers of commercial air conditioners, major industry organizations, utilities, and efficiency organizations to finalize this standard,” Katie Arberg, Energy Efficiency and Renewable Energy (EERE) communications, DOE, told the press.

HVAC Pros Hustle to Keep Up With the Changes

Those most likely to be caught off-guard by the new regulations are HVAC contractors and the hard-working professionals who will install and maintain the new HVAC equipment. Although it is always the responsibility of an HVAC professional to stay current with industry developments and trends, manufacturers will need to spend time explaining the DOE standards and how they affect work in the field.

“While we salute the effort to reduce emissions, we also understand that there will be some concern from commercial property owners about the new mandate,” Carl Godwin, commercial HVAC manager at CroppMetcalfe, said. “We’ve been in close contact with commercial HVAC manufacturers and have taken extensive time to train our five-star technicians on the new standards and practices that will be implemented on Jan. 1. We welcome commercial property owners to contact us with any questions.”

New Rooftop HVAC Units Are Expected

The regulations are changing the way HVAC technology is built to meet these improved efficiency demands. With only two months to go, are heating and cooling manufacturers ready for the impending standards?

The answer is yes. The major heating and cooling manufacturers have embraced the changes.

“We can build in value along these trend lines as part of our work to comply with these regulations,” Jeff Moe, product business leader, unitary business, North America, Trane told ACHR News. “One of the things we looked at is the term ‘Beyond Compliance.’ For example, we’ll look at the new 2018 energy-efficiency minimums, modify existing products, and increase their efficiencies, so they comply with new regulations. We will also incorporate additional product changes in areas of customer interest along the trends to provide value above and beyond the efficiency increases.”

HVAC engineers have also taken significant steps to meet the DOE guidelines, recognizing that they must have a clear understanding of compliance with the new mandates and create new product designs to meet or exceed all of the new standards.

Higher Initial Cost, Lower Operating Cost

The biggest challenge to manufacturers is designing RTUs that meets the new demands without incurring higher costs up front. Higher Integrated Energy Efficiency Ratio (IEER) systems will require larger heat exchanger surfaces, increased modulated scroll and variable speed scroll compressor use and adjustments in fan speeds on blower motors.

“Whenever there are major regulation changes, the biggest concerns for manufacturers, like Rheem, are how does the product need to be redesigned,” Karen Meyers, vice president, government affairs, Rheem Mfg. Co., noted in an interview earlier this year. “How will the proposed changes be applied in the field, will the product remain a good value for the end user, and what training needs to happen for the contractors and installers.”

Breaking It Down

The DOE has set its focus on IEER when assessing energy efficiency. Seasonal Energy Efficiency Ratio (SEER) grades a machine’s energy performance based on the hottest or coldest days of the year, while IEER assesses the machine’s efficiency based on how it performs over an entire season. This helps the DOE to get a more accurate reading and label a unit with a more accurate rating.

The new level of consistency should help manufacturers design HVAC units that will meet the new standards.

“One of the items required for getting ready for 2018 is preparing for the DOE’s change of the performance metric to IEER, which will require education to customers on that change and what that is going to mean,” Darren Sheehan, director of light commercial products, Daikin North America LLC, told reporter Samantha Sine. “From a technology standpoint, different types of indoor supply fans and variable capacity compression could come into play.”

The American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) is also adjusting its standards according to the new DOE regulations. The last changes in ASHRAE came in 2015.

Although it’s unclear exactly what the standards will look like, experts are making these predictions:

Two-stage fan on cooling units 65,000 BTU/h or larger

Two stages of mechanical cooling on units 65,000 BTU/h or larger

VAV units could be required to have three stages of mechanical cooling from 65,000 BTU/h-240,000 BTU/h

VAV units could be required to have four stages of mechanical cooling on units greater than 240,000 BTU/s

Both DOE and ASHRAE regulations will vary from state to state. HVAC professionals that want to stay updated on the development of new standards in their state can visit energycodes.gov/compliance.

New Commercial HVAC Installation Refrigerant Regulations

The DOE HVAC directives will also include parameters set for refrigerant use in the U.S. that relate to HVAC certification. Industry use of hydrofluorocarbons (HFCs) was phased out in 2017 due to dangerous carbon emissions. Earlier this year, the DOE limited ozone-depleting substance (ODS) purchase allowance to certified reclaimers or technicians. ODS limited use included hydrochlorofluorocarbons (HCFCs), chlorofluorocarbons (CFCs) and now HFCs.

What’s new in 2018? Technicians wanting to acquire ODS-classified refrigerants will need to have HVAC certification with a specialization in ODS use. Certification is good for three years. DOE regulations will require all technicians handling ODS substances to maintain disposal records of ODS used in equipment with five or more pounds of refrigerant.

Records must include the following information:

Refrigerant type

Location and date of disposal

The amount of used refrigerant extracted from an HVAC unit

Name of recipient of the refrigerant transfer

Some new changes in HVAC system refrigerant standards will also drop in 2019. Technicians can expect a new leak rate table and quarterly or annual leak inspection in all equipment that requires a review of 30 percent for industrial process refrigeration using over 500 lbs of refrigerant, an annual check of 20 percent for commercial coolant using 50-500 lbs of refrigerant and an annual inspection of 10 percent for comfort cooling in office and residential buildings

How Will the HVAC Changes Affect Consumers?

Naturally, the upgrades in energy-efficient HVAC systems will send some shockwaves through the entire heating and cooling industry. In the long term, business owners and homeowners will benefit from the DOE’s strict standards over the next 30 years.

What HVAC distributors, contractors and consumers want to know is how the changes will affect the initial product and installation costs of the new HVAC systems. Efficiency doesn’t come cheap. The first wave of technology is likely to bring higher price tags.

Still, HVAC manufacturers remain optimistic that the new systems will be seen as a smart investment because they will meet the short and long-term needs of business owners.

“We continue to have dialogue on the 2018 and 2023 DOE rooftop efficiency regulations that will impact our industry,” said David Hules, director of marketing, commercial air conditioning, Emerson Climate Technologies Inc. said this past January. “Specifically, we have been talking with our customers to understand their needs and how our modulation solutions, including our two-stage compression solutions, can help them achieve higher efficiencies with enhanced comfort benefits.”

It’s been a heavy lift for manufacturers to completely revamp their units to meet the new efficiency levels, though many are working hard to ensure they do so in time.

“The biggest impact is on the manufacturers who have to ensure that all of their products meet the minimum efficiency levels,” Michael Deru, engineering manager, National Renewable Energy Laboratory (NREL) said. “The next biggest impact will be on utilities because they have to adjust their programs and savings calculations. It gets harder for them to develop new efficiency programs and show savings when the minimum efficiency bar keeps getting higher.