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HARDI Clarifies Phaseout Position, Some Barriers to HFC Adaptation

March 17, 2008
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Talbot Gee

[Editor’s note: The following is a column from Talbot Gee, HARDI vice president.]

From the perspective of the Heating, Airconditioning and Refrigeration Distributors International (HARDI), I felt it important to clarify several points in the article “A Longer Life for R-22 Equipment” (Feb. 11, 2008). The article served a positive purpose in dispelling the misconception that equipment using R-22 or any other HCFC refrigerants could no longer be produced after Jan. 1, 2010. However, I believe the primary reason why HARDI identified this as an issue was lost in the article.

HVACR wholesale distributors are in a delicate position regarding this transition to HFC refrigerants. Regulatory bodies and environmental advocates are increasingly pressuring the industry to improve recovery and destruction of HCFC gases while at the same time promoting regulations on HFC refrigerants. Meanwhile, legislators, utilities, and efficiency advocates are pressuring the industry to reduce energy consumption largely through wider adoption of high-efficiency HVACR equipment.

That being said, for many of our members there were, and still are for some, market disincentives for equipment using HFCs as well as largely a lack of public awareness or concern at all, among building owners and homeowners alike, about the phaseout of HCFCs and the benefits of transitioning to equipment using HFCs.

Many in and outside the industry point to HVACR distributors to lead the charge to recover HCFCs despite the lack of limits on the production of equipment that uses HCFCs and the widely varying access to and cost of HFC-using equipment. Notwithstanding, HARDI simply believes it is important for our members to understand the potential issues that could be presented by a continuing stream of HCFC equipment, including aftermarket, in an HCFC-constrained environment. Coupling that conflict with what appears to be a generally slow transition to HFC equipment - based on the limited data from manufacturers made available to us - puts many HARDI distributors between a rock and a hard place.

HARDI member companies have been very successful promoting R-410A equipment residentially and commercially when provided access to it, and that will continue to grow. But it is also a fact that distributor success throughout this transition relies most significantly on the strategies of equipment manufacturers, which currently range across a very wide spectrum.

Commercially, there is still little evidence to show building owners are asking for equipment using HFCs. So some manufacturers have decided to make the choice for them by discontinuing commercial products using HCFC. Residentially, demand for HFC equipment correlates directly with two factors: price and availability. First, homeowners and builders move to R-410A equipment when there is an insignificant price difference with similar R-22 equipment. Second, customers demanding the highest-efficiency products usually have little option other than purchasing R-410A equipment.

This indicates that simply using an HFC refrigerant does not inherently drive demand for a product. Utilities, driven to reduce peak demands and encourage high-efficiency equipment, make no distinction between R-22 and R-410A equipment, thereby providing no relief for any price differences that may exist between two similar models. Rather, the way manufacturers choose to produce and price their equipment plays the most significant role in leading the transition away from HCFC use and demand.

Distributors have a long history of successfully promoting and selling their manufacturers’ products and growing their markets. But in this case distributors could face the worst ramifications of an approach that encourages the phaseout of HCFCs while potentially doing little to limit its demand.

While understandably proprietary, manufacturers’ production and phaseout schedules, not to mention their pricing strategies, truly hold the key to the transition to HFC-using equipment since there is no legal ban on the production or import of R-22-using equipment after Jan. 1, 2010.

Most of our members still don’t know those schedules for the lines they represent, so HARDI is left with no option other than trying to prepare its members for any number of potential scenarios. These scenarios are not indictments on the industry’s manufacturers, contractors or anyone, but rather potential reactions to be considered as product manufacturers make their individual decisions.

Publication date: 03/17/2008

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