Be it for energy savings, tax breaks, or other varying reasons, regulations are a critical component of the HVAC industry and are constantly on the minds of HVAC professionals.

A set of recently enacted energy conservation standards for commercial air conditioners, heat pumps, and warm-air furnaces, otherwise known as rooftop units (RTUs), are set to go into effect in 2018 and 2023 and should, most definitely, be on the radar of all commercial HVAC contractors and manufacturers.


The rooftop air conditioner standards — which will cover new units found on low-rise buildings, like hospitals, schools, and big-box stores — will take effect in two phases, increasing minimum efficiency by about 10 percent as of Jan. 1, 2018, and by 25-30 percent as of Jan. 1, 2023. Standards for new warm-air furnaces that are typically installed as a unit with a commercial air conditioner also become effective in 2023.

Based on the U.S. Department of Energy’s (DOE’s) estimates, the new rooftop air conditioner standards will save more energy and cut more emissions than any other standards completed by the agency, outpacing the previous record-setters that covered electric motors in 2014 and fluorescent tube lamps in 2009. The energy-efficiency standards are expected to save 1.7 trillion kWh over 30 years of sales or almost as much energy as created by all the coal burned in the U.S. to generate electricity in a year.

Additionally, per the DOE, the new standards would net a typical building owner between $4,200-$10,100 over the life of a single rooftop air conditioner.

For larger commercial buildings, the savings are significant.

The DOE estimates the new efficiency standards for RTUs will save businesses as much as $167 billion in energy costs over the lifetime of the equipment — more than any other efficiency standard issued to date. Additionally, carbon pollution will be reduced enough over the next 30 years to offset the annual carbon dioxide emissions of more than 120 million homes.

According to former U.S. energy secretary Ernest Moniz, this announcement “marks the largest energy-saving standard in history and demonstrates that America is leading the effort to reduce energy costs and cut carbon emissions. This rule also shows that strong public-private partnerships can reap environmental and economic dividends and drive technology breakthroughs.”


Because these regulations were finalized in late 2015, manufacturers have had plenty of time to prepare their equipment lines. However, given that the ruling came under the Obama administration, there is some minor uneasiness about their future under the Trump administration.

“These regulations were final prior to the current administration,” said David Hules, director of marketing, commercial air conditioning, Emerson. “The current expectation is that the pace of new regulations from the new administration will be more measured; however, the regulations already on the books are expected to remain. Further, these regulations, in some respects, are supportive of the global competitiveness of American businesses that export and service the global HVAC market.”

Staff at Rheem Mfg. Co. see the upcoming regulations as an opportunity to get onboard with the rulemaking and plan ahead.

“Even though this rulemaking is considered the largest energy savings of any rule issued by the Department of Energy, the first step in 2018 raises the federal minimum to the existing ASHRAE 90.1 level,” said Karen Meyers, vice president, government affairs, Rheem. “The second step in 2023 is a large increase, but having the rule finalized so far in advance is a big help when it comes to planning ahead. In fact, I was on a 17-person DOE committee to help negotiate the rulemaking, which gave me the opportunity to put in my two cents on behalf of Rheem from the very beginning.”

Given the amount of time to prepare, manufacturers revel in the fact that they can redesign and improve their products to meet these new standards.

“Planning is critical with a change of this magnitude,” said Matt Lattanzi, director of regulatory affairs, Nortek Global HVAC. “We plan and prioritize based on market need and available resources. For manufacturers, these regulations represent a tremendous amount of work and expense; however, because we have to redesign, these changes also provide us with opportunities to improve and upgrade our products.”


With these new regulations, manufacturers have to redesign their RTUs to meet the new standards. While this process is costly and timely, it allows manufacturers to improve their products, which gives them a leg up on the competition.

“The greatest performance challenges in these new regulations are in commercial rooftops,” said Hules. “When a system has the ability to match capacity to the demanded cooling load, then you see higher efficiency scores. To respond, we’ve expanded our portfolio of tandem and multiple compressors as well as our offering of two-stage compressors. These solutions deliver additional stages of capacity in a cost-effective manner. The result is improved system efficiencies all while system complexities are kept manageable.

“Regulations present an opportunity across the industry to realign and position products to satisfy customers’ needs,” Hules continued. “Regulations have driven the market to higher value and more efficient systems. As these regulations begin rolling out, both manufacturers and contractors need to communicate the efficiency payback as well as the comfort benefits of these new higher efficiency models.”

New regulations present an opportunity for new and improved products that will be attractive to customers looking for greater energy savings.

“This is an exciting time for Rheem because we get a chance to create more innovative products in our Fort Smith, Arkansas, plant,” said Meyers. “Our product developers have been working a tremendous amount of time tweaking and testing designs. We are confident the latest RTUs will launch well before the January 2018 deadline.

“When new regulations are put into place, it challenges manufacturers to incorporate updated platforms with innovative features to reduce energy, provide increased reliability, and improve the installation process,” Meyers continued. “The DOE estimates the new RTU rule will save 1.7 trillion kilowatts hours over 30 years of sales because RTUs cool about half of the commercial space nationwide. This rule is a triple win for the environment, businesses that use RTUs, manufacturers, distributors, and contractors. The rule saves money on energy bills, lowers emissions, and creates a regulatory certainty for manufacturers.”

At Nortek, the redesign process is viewed as a great way to get ahead of the competition and level the playing field for all.

“Regulatory changes provide manufacturers the opportunity to set themselves apart from the competition. In other words, since we have to redesign, the key to increased sales is providing a better mousetrap versus your competition. In a sense, these changes level the playing field, giving all manufacturers the opportunity to get better,” said Lattanzi.


The new administration has not weighed in on the 2018 and 2023 RTU standards that were negotiated in 2015 and finalized in May 2016, so manufacturers continue to adjust accordingly to meet these impending standards.

“The great news is that manufacturers typically only have three years to comply with the commercial standards, but this time around, we got eight years,” Meyers said. “That’s because it is a two-step process set to go into effect in 2018 and 2023. This gives us a clear roadmap and certainty until almost 2030. We are pleased with the process in which the DOE allowed stakeholders to come together and negotiate this rule face-to-face instead of in written responses. When regulators, manufacturers, and energy advocates work together in person, it usually results in more positive outcomes for all stakeholders.”

Emerson has been planning and adjusting for quite some time and continues to keep an eye on regulations to ease the adjustment process.

“Regulations are something we, as a business, pay close attention to,” Hules said. “We’ve been aware of the regulations and have tracked them through the rulemaking process. We follow the regulatory process to respond to the needs of the industry with solutions to facilitate a smooth transition for equipment manufacturers, distributors, end users, and other stakeholders that may be impacted by regulations. HVAC is a global industry with disparate regulations in many regions of the world. So, in many respects, regulations are a reality for the foreseeable future and alignment on product requirements across regions is beneficial for the industry.”

While manufacturers are positive about the redesign process, it will still be a challenge, but one they are willing to accept.

“While we considered the January 2023 efficiency change in our designs, this still represents another significant change for the industry,” Lattanzi said. “Changing the efficiencies of this equipment within this short time span will be a considerable challenge for manufacturers, and there are still many unknowns.” 

Publication date: 6/19/2017

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