The Industry Weighs Higher Standards

May 4, 2001
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As the debate over a 12- vs. 13-SEER standard continues, The News sought further clarification from two entities that sit on opposite sides of the fence: Goodman Manufacturing Co., Houston, TX, one of the largest manufacturers of air conditioning equipment, and the Air-Conditioning and Refrigeration Institute (ARI), which represents the industry's manufacturers.

As reported in the April 23 News, the outgoing Clinton administration initiated a new 13-SEER standard for central air conditioners and heat pumps. The incoming Bush administration put that rule up for review and last month proposed a reduced 12-SEER standard.

Goodman came out strongly in favor of 13 SEER. ARI, on the other hand, strongly supports 12 SEER. Both explain their viewpoints.



Achieving Efficiency

Ed Dooley, vice president of communications and education for ARI, said that their divergent views are "a difference in how best to achieve optimum energy efficiency gains for the country.

"ARI believes a 20% increase (going from the current 10 SEER to 12 SEER) would encourage more people to move to higher efficiency equipment, which would result in more energy conservation. With a 30% increase (13 SEER) and the cost increases for the equipment and potentially for installation, consumers might be discouraged from replacing their units."

John Goodman, chairman of Goodman Manufacturing, noted that higher-efficiency technology, basically, has been around a long time. His company already produces both 12- and 13-SEER models, and he believes that 99% of the industry currently has 12- as well as 13-SEER models available.

Going with the more efficient 13-SEER standard, he said, "is the right thing for consumers. It's the right thing for manufacturers. It's the right thing for the environment."

Dooley, however, said that going to 13 SEER would eliminate 84% of the a/c units presently on the market and could have an adverse effect on competition. He related that a statement filed by the Justice Department said that 13 SEER "would have a disproportionate impact on smaller manufacturers."

Although Dooley said that Goodman Manufacturing is "the only company that didn't support our position," Goodman remarked that a few manufacturers have expressed support for his 13-SEER stance and will be going public with their comments. He also said that his firm's distributors have been supportive.

Talking about replacement systems, Dooley pointed out that new higher-efficiency units would not only be replacing 10-SEER models, but also 9, 8, and lower. The concern is that there are millions of homes with older equipment where 13 SEER "would be a costly retrofit."

The larger 13-SEER indoor coil could cost more to install due to inadequate physical space compared to what was needed for the old coil. "And if people mismatch the coils, in other words leave in the old indoor coil with a new condensing unit, they won't get the energy improvement they sought."

Regarding equipment size, Goodman said that his company's research shows that 13-SEER condensing units are taller but remain the same length and width. The size difference, he professed, is minimal. As for indoor coils, he said they are larger but not enough to make a difference in the installation.

Another area of contention is manufactured housing. Dooley related that there are about 20 million people living in 9 million manufactured homes. "To try to retrofit 13 SEER in these homes could be extremely difficult" and costly.

Goodman answered that his company doesn't foresee problems with manufactured homes either, but said that in the Clinton proposal, manufactured housing had an exemption.

Many of these points revolve around cost. ARI and Goodman Manufacturing paint very different pictures on payback.

Department of Energy (DOE) cost figures for 12 vs. 13 SEER show a price differential of $122 (see The News, April 23, 2001, pg. 46). Goodman agrees that his cost difference is about $100.

The DOE reports that 12 SEER will provide a payback of 9.8 years, while 13 SEER has a payback of 11 years. In its letter to the agency commenting on the earlier proposed 13-SEER rule, ARI wrote that payback periods for 13-SEER units "are from 9.3 to 21.8 years based on the ARI cost data, and are 6.4 to 14.5 years based in reverse engineering."

Goodman, on the other hand, contended that "payback to the consumer is very quick" with 13 SEER. "Our studies say it will take one to two years. In the Sunbelt, it's a one-year payback basically."

And the rising price of energy would speed that payback, he noted. "With energy costs the way they are today, and we feel it will continue this way, it's the right choice for the consumer."

He also affirmed that, if the standard were set at 13, it would drive manufacturing costs down for those units because there would be more manufacturing throughput.

So although ARI believes that higher unit cost and possible higher installation cost could deter people from buying a/c systems, Goodman doesn't agree. In fact, he thinks that the higher energy efficiency offered and consumers' desire to cut their energy bills will actually spur demand.

A new comment period on the newly proposed 12-SEER standard is expected to begin shortly, and both ARI and Goodman Manufacturing will again express their views to the DOE.

Dooley stated, "We are not discouraging 13 SEER. But a national standard has to apply to all the people," including considering the needs of retirees and lower income families. Goodman summed up his position by reiterating that he believes 13 SEER "is the right thing for our industry and it's the right thing for the consumer."

Publication date: 05/07/2001

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