In addition, the industry has simultaneously had to gear up for numerous refrigerant changes.

Workhorse refrigerants R-134a and R-404A are set to be delisted by the U.S. Environmental Protection Agency’s (EPA’s) Significant New Alternatives Policy (SNAP) program for stand-alone medium- and low-temperature units. The EPA changes take effect Jan. 1, 2019, for stand-alone medium-temp units with a compressor capacity below 2,200 Btuh, and Jan. 1, 2020, for stand-alone medium-temp cases with a compressor capacity greater than 2,200 Btuh and all stand-alone low-temp cases.

All of this has meant that for the past few years, manufacturers have been largely innovating to stay in business rather than innovating to meet customers’ desires.

“That has definitely been an issue for many manufacturers,” said Alex Tappé, vice president of sales, Victory Refrigeration. “We’ve had to spend a tremendous amount of our engineering and product development resources to get to the DOE levels and to prepare for the changes in refrigerants we’ll be required to make when R-134a and R-404A are delisted. So, it certainly has taken away from our ability to do research and come up with truly innovative products for the marketplace.”

Despite the huge investments of time and money required to make the DOE and EPA changes, Tappé remains optimistic that everything will turn out for the best.

“I think there’s a reason we’re doing this, and I hope it’s going to have the positive effect on the environment that we’re all hoping for,” he said. “Cleaner business is smarter business, and if you look back 20 years to when the industry switched over from R-22, we all ended up with better and more efficient products. So, I’m on board. All manufacturers are dealing with this, and I’m confident we’ll get through this period and get back on track.”

Tappé added that the changes create an important consideration for contractors and customers; however, they’ve also forced contractors, consultants, dealers, and customers to hold conversations about the equipment that’s going to be delivered.

“We’re in a big transition right now, so it’s very important that information is gathered and communicated to the operators,” he said. “Are they buying an R-290 unit or an R-134a unit? They’re going to have these units long-term, and it’s important that they know exactly what they’ve got in their buildings.”

CHALLENGES FOR OEMs

Allen Wicher, director, refrigeration marketing, Emerson Commercial and Residential Solutions, said the DOE’s mandate of a 30-50 percent reduction in energy consumption on new stand-alone commercial refrigeration equipment that took effect on March 27 combined with the EPA’s phasing out of the use of high-GWP (global-warming potential) refrigerants has created challenges for OEMs.

According to Wicher, important issues for OEMs to consider during this time of transition include:

• One Design Cycle or Two? — OEMs face a critical design choice to achieve regulatory compliance and must approach each regulation as a separate engineering effort or combine compliance into a single design cycle.
• Compressed Design Cycle — Regardless of the design cycle decision, OEMs will need to allot sufficient laboratory and testing time to make the necessary design adjustments to achieve DOE compliance and secure requisite UL, ASHRAE, and NSF certifications.
• Civil Penalties — The details regarding how the DOE will enforce the ruling remain unclear, but past performance indicates civil penalties will be imposed.
• Peer Scrutiny — As many OEMs have made significant investments in design changes to achieve compliance, those who haven’t will likely be subject to the scrutiny of their industry peers. In other words, the industry will also police itself.
• Registration in DOE Compliance Database — The DOE maintains a database of commercial equipment for compliance called the Compliance Certification Management System. This database is essentially a record of the baseline energy consumption of equipment prior to making the mandated design changes to achieve new energy-efficiency levels. OEMs that have not listed their equipment in this database may be subject to civil penalties.
• Market Pressures — Because design consultants and end users are seeking refrigeration units that comply with DOE and EPA regulations, OEMs that fail to bring viable products to market may face significant business risks.

REDESIGNING FOR DOE AND EPA

Tim Wilczak, senior product sales manager, Delfield, said Delfield and some other manufacturers took the opportunity to redesign their entire product lines to simultaneously meet both the DOE’s and the EPA’s new and upcoming regulations. It was a difficult undertaking, but one that is likely to pay dividends in the long run.  

“We incorporated a lot of refrigerant work as part of the energy redesign for the DOE, because the R-290 refrigerant we’re transitioning to is actually more energy efficient in the system than R-134a or R-404A,” he said. “So, even though it wasn’t required to switch the refrigerants quite yet, we took advantage of that and did all the redesign work at one time.”

According to Wilczak, most Delfield equipment — including all of the company’s standard refrigeration products, such as reach-in coolers and undercounter units — will use R-290 and be compliant with both DOE and EPA SNAP regulations through 2020. Some larger units will continue to use R-404A, but the company is working to transition those units by 2019.

“We’ve been training our service network for quite a while, and we think the industry is ready for R-290,” he said. “Some customers have concerns about R-290, but it’s a very small charge, especially in an undercounter unit. In addition, there’s very rigorous testing by UL on these types of systems to make sure they’re not going to leak. So, it’s very unlikely that there will be flammability issues in the kitchen.”

Looking ahead, Wilczak said Delfield is eager to get back to responding to customers’ needs.

“Obviously, we’ve tried our best to continue to be responsive to customers, but putting significant resources into the DOE was basically a stay-in-business move,” he said. “We’re looking forward to getting back to being more flexible and agile.”

RISKS AND OPPORTUNITIES

In addition to energy-efficiency requirements and low-GWP refrigerant regulations, food safety standards are putting pressure on cold room owners, manufacturers, wholesalers, and installers, noted Christopher Nitz, manager, segment marketing — air conditioning and commercial refrigeration, Danfoss.

“While this demanding and evolving regulatory landscape represents profitability risks, it also creates opportunities to rethink how cold room equipment is designed, which allows for cleaner, safer, and easier use and ensures sustainable and efficient operation,” Nitz said.

On June 3, 2014, the DOE issued a final rule regarding energy conservation standards for cold rooms. This ruling introduced a new compliance term, the annual walk-in energy factor (AWEF), which is the ratio of heat removed from the envelope to the total energy input of the refrigeration system over one year. Effective Jan. 1, 2020, all medium-temperature condensing units offered for sale in the U.S. must meet the applicable AWEF levels found in the ruling.

Nitz noted that cold rooms are transitioning to lower GWP refrigerants to comply with SNAP, and R-404A, the predominant refrigerant in use today, will no longer be permitted in new remote condensing units after Jan. 1, 2018. This is leading many manufacturers to focus on R-448A and R-449A.

He added that expansion valves, solenoid valves, fan speed controllers, temperature controllers, and condensing units will all play a role in reducing energy consumption and enabling compliance with upcoming environmental regulations.

“Given the changes taking place, care should be taken when selecting refrigeration components to ensure compatibility with new refrigerants,” Nitz told The NEWS. “Now is the time for all market players to act to guarantee a smooth transition to the new energy and environmental standards.”

THINNING A CROWDED FIELD?

D.J. Kourie, vice president of national account sales, Turbo Air Inc., said the combined DOE and EPA regulations may have the effect of shaking out some manufacturers from a crowded field.

“Virtually every manufacturer has faced some fines and penalties because they couldn’t meet certain timetables, but the larger and more established manufacturers are basically all prepared now,” he said. “However, I think there will be some smaller manufacturers from overseas that won’t be able to comply in time.”

This may especially be the case for manufacturers of small grab-and-go novelty cases, he added.

“A lot of smaller grab-and-go novelty cases won’t meet the DOE regulations, and some of those are either going to be dropped or are going to have to be totally redone and redesigned. But, outside of that, there’s not going to be any major changes with the big players in the industry.”

Turbo Air became fully DOE-compliant for 2019 as of Jan. 1, 2017, according to Kourie. Everything manufactured by Turbo Air after Jan. 1, 2017, will have either R-290 or R-600 refrigerant. He said the company experimented with a few other types of products, but it seemed like the industry consensus was going to R-290 with the grocery store market and rack systems moving more to CO2.

Despite the challenges presented by new regulations, Kourie is optimistic all the effort will be worth it in the long run.

“I was selling ice cream machines when they went from R-12 and R-22 to R134a and R-404A, and it proved to make the machines much more efficient,” he said. “So, we weathered that storm, and 20 years later, we’re much better for it. I imagine 20 years from now, we’ll be saying the same thing about propane.”

REGULATIONS AT ODDS

Jeremy James, engineering manager, Master-Bilt, noted the DOE and SNAP regulations do not always work well together. Manufacturers are challenged by the fact that alternative refrigerants approved by the EPA are not always consistent with the goals of increasing energy efficiency and reducing end-users’ energy costs.

“One of the unfortunate aspects about SNAP — particularly for remote refrigeration — is that there are some compromises that have to be made for the alternatives we’re left with,” James said. “This is particularly true when it comes to mitigating the higher discharge temperatures and working with the refrigerant glide that wasn’t there with our current refrigerants. Those are things you have to account for in design, and in some ways, the equipment becomes more complicated.”

James said contractors are already seeing another consequence of the DOE and SNAP regulations: A proliferation of refrigerants. For the most part, while the industry has worked with two or three refrigerants that covered about 90 percent of the equipment, technicians can expect to soon be carrying anywhere from seven to 10 to service the full range of products.

According to James, regulations also have created some confusion and uncertainty among customers, that may compel them to hold off and see how things shake out before they make the commitment to invest in new equipment.

“Customers know there’s some uncertainty about what refrigerant is going to become the industry standard moving forward,” he said. “This uncertainty can lead to customers choosing to keep old units in service rather than replacing until the issue is settled. But, we all know there are advantages to having new equipment, so we hope the customers will weigh that as they make their decisions.”

R-290’s GROWING ROLE

Scott Malernee, sales development manager, Traulsen, said the company is moving in the direction of R-290 in its new equipment but is going to offer alternatives as long as possible.

“We’re finding that not everyone wants propane,” he said. “At the end of the day, some customers, such as school administrators, don’t like the idea of technicians walking down the halls with cylinders of propane. It may not make much sense to us in the HVACR industry, but they’re the customers. So, we are openly advertising that we’re not all-in on R-290, and we’re going to offer legal alternatives for as long as we can do so.”

James Piliero, sales development manager, Traulsen, agreed with and expanded on Malernee’s comments.

“The upcoming SNAP delistings of R-134a and R-404A — effective in 2019 for cabinets using less than 2,200 Btuh and in 2020 for cabinets exceeding 2,200 Btuh — forced every freezer and cooler manufacturer to make a decision on what worked best for their customers and their business models,” he told The NEWS. “We felt that switching over to R-290 at this time didn’t give our customers choices. It’s not that there’s anything wrong with R-290. Our sister company in the U.K., Foster, has been using it for 20 years. But, in the U.S., it’s a perception issue, although that will change with time.”

In the interim period, Traulsen is going to offer R-134a and R-404A in all of its products. R-290 will be available as a customer-selected option on select models of its most popular dealer’s choice models, including its G Series refrigerators and freezers and compact undercounter refrigerators, freezers, and prep tables, said Piliero.

“Giving our customers choices increases our cost of doing business, but it’s the right thing to do,” Piliero said.

In other trends, Malernee noted that the days of mechanical controls are just about over. He said microprocessor controls are helping to make new equipment much smarter and more efficient and also enable remote monitoring. Piliero, meanwhile, noted that the recent DOE efficiency changes have led to interesting developments, such as smaller glass surface areas on glass door coolers and LED lights installed inside the door frame rather than inside the cabinet.

“Those changes are definitely a reaction to needing to increase efficiency by reducing the number of Btu either leaking out of or entering the cabinet,” he said.

Continental Refrigerator is also moving to R-290 in its new equipment, according to Grant Price, sales manager.

“The ongoing transition has gone very smoothly in the plant,” Price said. “The efficiency of the R-290 equipment is very good. As far as our customers are concerned, everything has been seamless.”

David Sellers, director of reach-in product development, Hoshizaki, said the company is continuing to offer R-134a and R-404A equipment but plans to eventually switch its product lines over to R-290. He noted there is talk that the International Electrotechnical Commission (IEC) will increase the allowable charge limit per refrigeration circuit from the current 150 grams to 500 grams and that, he said, would be a big help in incorporating R-290 into larger equipment. In the meantime, Hoshizaki is putting together training through its technical support department, so the company can be assured the technicians who are doing warranty work on the equipment know how to work safely with R-290.

“The technicians are going to get there,” Sellers said. “R-290 units are already out there in the field, and the service technicians who are knowledgeable about working with HFC [hydrofluorocarbon] refrigerants will pick up quickly on the few different things you need to know about working with hydrocarbons.”

Sally Ray, marketing manager, Hoshizaki, added that the company is offering a new prep table that was tested at much higher temperatures and for a much longer duration than what is required by NSF standards.

“NSF requires testing at 86°F for four hours, but the extended testing we did on our prep table more accurately reflects the real-world conditions found in many kitchens,” she said. “The air circulation system inside the prep table ensures that all the bins and trays maintain proper temperatures even under harsh conditions.”

PROMOTING VALUE

David Bishop, managing consultant, Blue Air Refrigeration, said despite the new refrigerants and higher required efficiencies, in many ways, refrigeration technology has not changed much since the 1940s — the laws of thermodynamics are still the same as they have always been. What has changed, however, is the business itself.

“The influx of low-priced foreign brands and the proliferation of sales over the internet have basically created a race to the bottom when it comes to pricing,” he said. “That means dealers often are trying to fight against the tide and cultivate customers who recognize the value of the product and the service.”

Bishop noted that Blue Air is a foreign brand, but rather than enter the low-price wars, the company is striving to win customers over with high-quality products and a focus on strong after-sale support.

“You can’t let things slip through the cracks when it comes to the quality of your product or the reaction time of your customer support people,” he said. “The service needs of the end users who have invested in our product must be met 10 out of 10 times. That’s our goal. And I think if we continue to do that, it eventually will translate to the street, and customers will be more aware of what they’re getting.

“There’s a time and a place for the least expensive products,” he added. “I understand and completely agree with that, but there’s also a time and place to make an investment.”

A PROUD FRATERNITY

Finally, the walk-in segment of the cold storage industry is made up of a “fraternity of excellence” that has worked hard over the last decade to meet ever-changing regulatory initiatives, according to John Stocks, senior vice president of retail sales and marketing, Everidge.

Stocks said the federal mandates regarding greenhouse gasses, walk-in insulation, and supporting accessories has had an impact felt by manufacturers and customers alike. Manufacturers that worked diligently to meet 2007’s Energy Independence and Security Act were soon preparing for DOE 2012 and the EPA’s accelerated blowing agent limitations. These mandates, he said, were addressed with direct involvement, support, and commitment by panel manufacturers.

“The U.S. walk-in industry is highly involved in energy regulations, and large manufacturers, like Everidge, are demonstrating compliance to federal requirements, environmental protection initiatives, and energy consumption,” Stocks said. “Our industry’s state-of-the-art manufacturing equipment provides controlled, accurate, and customized superior products for today’s end user, and Everidge is a 75-year, proud member of this fraternity of excellence.”   

Publication date: 7/10/2017

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