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In the realm of residential cooling, two trends popped out at the 2023 AHR Expo.

The first is that everyone is talking about the new federal tax credits.

Reported Jeff Goss, director of product management - residential systems, from the Rheem booth on the second day of the show, “The biggest request for information from contractors has been around the Inflation Reduction Act and how those incentives will align with our new product portfolio.”

And it’s not just industry buzz. Word has spread quickly among homeowners, too.

“It's definitely picking up … the 25C credit any homeowner can get that's a $2,000 tax credit if you meet the qualifications for the CEE,” said Justin Huntington, senior product manager for residential heat pumps and air handlers at Lennox International. “The other is the $8,000 rebate. We haven't seen too much of that yet; we're waiting for the states to adopt those — each individual state has to set up their own program for the IRA. But we'll definitely see more and more as the year goes on.”

The other big trend is that, at least among leading manufacturers exhibiting on the show floor, heat pumps dominated the residential cooling scene, leaving air conditioners in the background.

Johnson Controls

Johnson Controls Inc. didn’t show any traditional a/c units at its AHR booth.

“The world is shifting to heat pumps,” said JCI’s Charles Hurd, director of residential product management. “There's a potential world in the future where straight a/cs don't get installed … that one of the regulatory strategies in the future is no a/cs, everything has to be heat pumps.”

Right now, he continued, there's one school of thought that forces everyone to do heat pumps exclusively. The other school of thought says no bans on gas.

But given the rebate levels, the market might largely sort this out on its own.

“There’s certain products in the portfolio that if a customer was already going to buy this a/c, but they can flip it to a heat pump and get [a credit], and the cost of the heat pump is less than that, why would anybody buy the a/c and not just buy the heat pump?” Hurd queried. “If they had a legit match and provided the same amount of cooling, the same great dehumidification? They’ve got an economic incentive to flip to the heat pump. It’s the decarbonization bandwagon — get on board or get left behind.”

JCI is boosting heat pump options for its 2025 portfolio and working to have a wider selection of heat pumps than a/cs. Its 15.2 SEER heat pump is the THF2, and its 16 SEER a/c is the TCF2.

Aside from decarbonization, another shift at JCI is prioritizing user-friendliness for contractors.

“Contractors want it to be easy to install and they want to avoid callbacks,” said Hurd. “We've introduced products in the past that were optimized for absolute performance for the homeowner.” However, how it played out in real life was that if something was not perfect with the install, the homeowner would be alerted that there was an issue and would call the contractor back out, and the contractor would blame the equipment.

In response, JCI is working to make sure the algorithms are easier on the installer — and that they send the complaint directly to the contractor, not to the homeowner.

“That lets the contractor handle it without having anything on their reputation upfront,” he said. “We think that that'll cause contractors to want to do business with us, and it'll be an easier day for them, too.”

Daikin

At the Daikin booth, John Schwartz, marketing and communications manager, didn’t hesitate when asked about the manufacturer’s heat pump progress.

“As you can hear, our government wants everything electric. Well, we're ready for that,” he said.

Among the many HVAC products on display was the Daikin Fit heat pump, a side discharge, smart HVAC system that connects to ducted solutions traditional to the unitary market. Daikin Fit can connect to a furnace or a fan coil.

The system provides a mid-efficiency inverter at an affordable rate, and the low profile of the outdoor unit offers solutions when space is tight. Daikin’s inverter compressor requires less condenser coil surface area. This allows for much smaller cabinet sizes with a side discharge fan design, eliminating the need for typical large, wrap-around style condenser coils. The Daikin Fit’s condensing unit is powered by the company’s proprietary variable-speed swing inverter compressor that gently ramps up and down, using only the energy needed to cool the space, saving money for homeowners during non-peak load periods.

The Daikin Fit is available in air conditioner, heat pump, and heat pump with dual fuel, the latter which, depending on temperature, allows a homeowner to take advantage of local utility rates for gas and electricity.

Rheem

At Rheem, Jeff Goss, director of product management – residential systems, said the company put a lot of effort into relaunching its residential heat pump platform, with different technologies at different tiers, to meet the demand he anticipates this year as consumers take advantage of IRA tax credits.

OPTIONS: Rheem relaunched its residential heat pump platform, with different technologies at different tiers, to meet the demand the company anticipates this year as consumers take advantage of IRA tax credits. Pictured is the Rheem Endeavor “Classic Plus” series iM heat pump. (Courtesy of Rheem)

Rheem’s base efficiency heat pump is the RP14 AZ or “Rheem Classic.” It meets the 14.3 SEER2 minimum efficiency standard nationwide.

“It actually made more sense to go with a two-stage compressor in that heat pump to meet that efficiency requirement and keep the size of cabinets down,” Goss said. “Then, in response to tax credits, we're introducing the RP15 AZ, which is designed with Energy Star and tax credit efficiency levels based on the CEE criteria.”

The biggest shift in technology for Rheem is in its mid-tier RP16AZ or “Classic Plus” heat pump, a new launch for 2023. It uses a twin rotary inverter with a new inverter drive design that Goss said gives a lot of flexibility to the contractor because it can be matched with a standard 24-volt thermostat or a communicating thermostat.

“You’ve still got some homeowners who don't want to go to a communicating, fully featured thermostat, or maybe they just have a thermostat that they're comfortable with and stick with it,” he explained. “In that scenario, the contractor can use that standard two-stage, 24-volt thermostat, and the system will operate in three discrete speeds — kind of a low, medium, and high — so you get the efficiency boost.”

It’s a simple installation and potentially a lower cost for the homeowner if they’ve already got a stat on the wall. However, Rheem still recommends that homeowners invest in the EcoNet communicating thermostat because that unlocks the variable-speed operation in the drive; the system can then modulate between 40-70% capacity.

Rheem’s top-of-the-line heat pump is the RP18 “Rheem Prestige.” It’s fully variable and offers the most efficiency.

Goss said that while right now the base model RP14 has sold the most by volume, he anticipates popularity will shift to the RP15.

“Because there's so many incentives available in the marketplace, whether it's the tax credits, the rebates, Energy Star programs, local utility rebates, that's really in a sweet spot to be potentially even more affordable to the consumer once all those rebates are stacked up. … At the end of the day, it's a win-win for everybody. The homeowner gets a more efficient system and the price point is more affordable because of all the incentives available.”