One of my favorite episodes of the TV show, “Modern Family,” involves the family taking their old car out for one last sentimental drive before family patriarch, Phil, sells it. During the course of the drive, the family gets out of the car, which then starts rolling backwards. Phil flings himself on the car, while his wife, Claire, yells, “What’s the plan, Phil? What’s the plan?” This catch phrase has been adopted by my family, and we use it whenever we’re confronted with a challenging problem. It’s a question that contractors should probably be asking themselves in regard to DOE’s new energy efficiency standards that take place next year.

Under the new standards, the minimum efficiency of residential equipment will increase approximately 7%, or the equivalent of 1 SEER point. There will also be new energy efficiency ratings used for 3- to 5-ton residential/light commercial, single-phase products that meet the new minimum efficiency standards. Due to a revised test procedure, the new metrics of SEER2, HSPF2, and EER2 will be used instead of SEER, HSPF, EER. The efficiency standards for single split central air conditioners will still be divided into three regions: North, Southeast, and Southwest, but the new SEER2 minimum will be 13.4 in the North (equivalent to 14 SEER) and 14.3 (15 SEER) in the Southern regions.

But what makes this transition more challenging for contractors is that there are separate installation requirements for residential central air conditioners sold in the northern and southern parts of the U.S. Residential air conditioning units built prior to January 1, 2023 can be installed in the North on or after that date, but newly manufactured SEER2, EER2 products must meet the 2023 minimum requirements.

In the Southeast and Southwest, air conditioners not meeting the new energy efficiency requirements must be completely installed by December 31, 2022; therefore, sell-through of air conditioners will not be allowed unless they meet the new 2023 SEER/EER minimums. Heat pumps of all types are excluded, as they are designated as “date of manufacture” products, which means that as long as they are built prior to January 1, 2023, they can be installed on or after that date.

If they haven’t already, contractors installing residential products in the Southeast and Southwest should be crafting a phase-in/phase-out plan, so they won’t be left with stranded air conditioner inventory that can’t be installed after January 1, 2023. In creating that plan, they should be talking regularly with their distributors and manufacturers’ representatives to find out when they should place their last-call orders, as well as when they are likely to receive those orders.

Southern contractors may be hoping for a last-minute reprieve, as some states such as Arizona are asking the DOE to delay the implementation of new efficiency standards to July 1, 2023. In a letter to DOE, Congresspeople from Arizona argued that due to supply chain issues and labor shortages, the deadline should be extended. In addition, they said that in new construction, the interior components of an HVAC system are typically installed first, with the outside equipment installed sometimes five or six months later, even in normal times. Homes being roughed in now, the letter said, require not-yet-available interior equipment that will work with the exterior components that will have to be installed beginning January 1.