NAECA round two: Higher efficiencies on horizon

June 1, 2000
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SAN ANTONIO, TX - Seven years after the Department of Energy (DOE) imposed the first round of minimum efficiency standards for residential-light commercial hvac equipment, the agency has reignited the process that will raise the bar to higher standards.

The DOE is required by law to reassess the standards, which derive from the National Appliance Energy Conservation Act (NAECA), born during the 1970s "energy crisis." Updates to the NAECA probably will become effective in 2006.

Last week's advanced notice of proposed rulemaking sparked a discussion at the annual meeting of the Air-Conditioning and Refrigeration Institute (ARI), which met here in San Antonio.

The present minimums, which took effect in 1992, generated a fair amount of turmoil in the market. An "overhang" of pre-minimum efficiency equipment remained to be sold, and manufacturers strove to recoup the cost of producing the newer, more efficient equipment.

The current minimums are 10 SEER for central air conditioners and heat pumps. Heat pumps also have a 6.8 HSPF. Both split systems and packaged equipment are affected.

The new numbers

How high will the new minimums go?

The rulemaking analyzes the impact of a range of SEERs, from 10 to 17 for central air conditioners, and up 16 SEER and 8.2 HSPF for heat pumps.

While manufacturers have been bracing for efficiency minimums in the 11- to 12-SEER range, they may find themselves looking at a 13 SEER - or at least debating this level.

Keep in mind that each point up the scale imposes additional costs to manufacturers and higher prices to consumers. Keep in mind, too, that contractors will be on the front lines, explaining these higher prices.

Mitigating circumstances

Unitary equipment manufacturers have argued that any new efficiency minimums should take into account the refrigerants now being used.

In its proposed rulemaking, DOE, which seems to be more sensitive to industry's needs than in the first round of rulemaking, said it will "seek to mitigate" the effect of impending regulations on the HCFC phaseout.

Manufacturers are continuing to scrutinize DOE's analysis closely.

Another significant factor is DOE's analysis of consumers' lifecycle costs (LCC) for equipment at various efficiency levels. In this scenario, the higher the efficiency, the higher the first cost of the unit and the relatively fewer consumers experiencing a lower LCC.

This methodology uses two variables: the effects of real-world industry data and those of "reverse engineering," in which equipment is torn down and reassembled.

For instance, at a 12-SEER level for central air conditioners, industry data suggest that 31% of consumers would experience lower LCCs; reverse engineering suggests that 45% have lower LCCs.

The climate factor

At the 13-SEER level, industry data show that 12% of consumers would have a lower LCC; reverse engineering finds that 27% would be impacted on lower LCC.

The question is, can you justify a high-efficiency system to homeowners in northern states? Would the system operate long enough to offer a reasonable payback?

Thirty-six percent of consumers buying a heat pump with a 13 SEER and a 7.7 HSPF would have a lower LCC, according to industry data; reverse engineering suggests that 49% would have a beneficial LCC experience.

In another measurement, DOE says that the Net Present Value ("a net benefit to the nation") also showed a "range of impacts."

Significantly, the agency said a positive benefit results for all efficiency levels less than 13 SEER, with the exception of a 12-SEER level for split-system air conditioners.

A public hearing is set for Dec. 9, 1999, from 9 a.m. to 5 p.m. at DOE's headquarters, the Forrestal Building in Washington, DC. Written comments must be received by Jan. 31, 2000. Further information is available from the Office of Energy Efficiency and Renewable Energy.

Publication date: 11/22/1999

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