“In normal times, without all these issues, we would not be devoting a lot of these resources that we've been required to on the fly, so that we're not prevented from being able to ship product and meet today's customer needs. That has certainly captured some of our resources that had originally been focused on new product development and new market introductions,” said Ward.

He added that when it comes to developing new products, the DOE standards are not the only thing to consider — manufacturers should make sure their HVAC solutions are aligned with current trends in decarbonization, electrification, digitization, low-GWP refrigerants, and even indoor air quality. Ward explained that these are themes that align with the future path of all products and services in the HVAC industry.

 

Design Options

Despite the challenges of producing new products amidst a pandemic and raging supply chain issues, the DOE’s new efficiency standards can be viewed as a step in the right direction when it comes to more environmentally-friendly HVAC solutions. Manlio Valdes, vice president of product management, Trane Commercial HVAC Americas, explained that the number of air conditioners in buildings is expected to reach 5.6 billion by 2050. If the technology of these devices and the behavior toward energy consumption don’t change, this increase in units could potentially grow the annual total emissions from HVAC units from 15% to 25%.

“We directly addresses these emissions at the source by developing newer and better HVAC technology to heat and cool buildings,” Valdes said. “Meeting these increased energy efficiency goals is an ongoing process that is integrated into our long-term new product development process.”

Valdes added that at Trane, during work on systems specifically designed to improve energy efficiency, engineers take the opportunity to inspect all its elements — such as energy performance, control systems, modularity, serviceability. From there, they take a look at the overall design and make improvements wherever they can. He said having more than one tier of efficiency is crucial because different customers want different levels of energy efficiency, which is what Trane offers with its IntelliPak portfolio of products.

Other manufacturers have taken the same approach toward offering different efficiency tiers to their customers. Ted Cherubin, marketing manager at Carrier, explained that Carrier’s Weather Series rooftop units come in three efficiencies, with the lowest one compliant with the DOE 2023 minimum standard. He added that when the minimum has a new standard, the other efficiency tiers have to follow suit, so producing and adjusting these product lines have helped the company meet and even exceed the job expectations of some customers.

“Just having one efficiency unit today is sort of risky, because you've got a lot of states with higher requirements than the DOE minimum and you’ve got utility rebates, so we've got a product to fit each one of those needs or a mix of them,” said Cherubin.

Cherubin said Carrier will be ready for the upcoming efficiency changes, already releasing some key sizes to meet the DOE 2023 standard, because the company put in a lot of effort up front. However, external factors — such as the availability of sample components from suppliers and partners — have slowed them down a little. Cherubin noted that even though they were a concern last year, supply chain problems have gotten much worse.

Phasing Out

So what happens to the products that don’t meet the DOE 2023 minimum efficiency requirement? Bobby DiFulgentiz, vice president of commercial product management and marketing at Lennox, said the company’s plan is to phase out the current lineup and replace it with their newer products. However, Lennox is still producing its “older” products because there is a demand for them.

“The way that regulation works is that, for the commercial market, as of January 1, 2023, you cannot build the old product that doesn't comply. You can build it up until then and stock it,” DiFulgentiz explained. “It’s a pretty smooth transition to a certain extent because you can still sell anything that was developed before January 1, 2023, which allows you to get into production on the new products.”

DiFulgentiz said the key to successfully delivering these new products is getting in front of the customer early on and understanding what they want from a product development standpoint. Having those conversations can help development and product management teams create a great product that consumers are actually willing to buy. When it comes to higher-efficiency products, DiFulgentiz said it’s also important to figure out how to deliver these new standards in a way that has good payback for customers. Considering a customer’s needs from not only an environmental standpoint but a financial one, too, is something that should not be overlooked.

Although the new higher-efficiency products are well on their way, Matt Schlegel, commercial product manager at Johnson Controls, said the purchase of these products early on really boils down to a customer’s preference and determination. He said customers still have options available to them, since the new standard only affects the parameter of efficiency based on the date of manufacture, not purchase. This means a customer could decide to purchase the current “older” product, accelerate to the new 2023 product, or buy a higher efficiency tier that's already available and not impacted by the new standard.

“For rooftops, this is a pretty big change at the base tier efficiency level, but it's not touching everything. Customers shouldn't be scared that every product we build is going to be new,” Schlegel said. “Mid-tier, high-tier, ultra-high efficiency — those products for a long time have already exceeded these standards and so those will continue, for the most part, unchanged.”

Schlegel added that the new efficiency standards are not a huge turning point because given recent trends in electrification and decarbonization, most of the industry has already been looking to increase their product efficiencies. He said manufacturers are always working to offer better products to their customers, so the new DOE standards just gave them a solid deadline to consider.

“We know pretty well where the industry is going with electrification and other efficiency changes. We don’t want to be chained to something that in a couple of years is going to be obsolete,” Schlegel explained.