[Editor's note: The Department of Energy's standard for air conditioners and heat pumps will be raised to a minimum of 13 SEER (seasonal energy efficiency rating), effective Jan. 23, 2006. In this series of articles,The Newsexamines the impact of the standard on manufacturers, distributors, contractors, and consumers. This installment focuses on manufacturers' efforts to meet the requirements of the new standard.]

Makers of residential air conditioning and heat pump equipment are moving quickly to meet the 13 SEER requirement recently imposed by the Department of Energy (DOE), and most manufacturers contacted by The News intend to promote systems that offer even greater efficiency.

In a little over 18 months, manufacturers of such equipment must meet the new standard. While much of the industry initially supported a minimum standard of 12 SEER, the Air-Conditioning and Refrigeration Institute (ARI) withdrew its court challenge on March 17, and the Department of Energy quickly announced its intent to enforce the 13 SEER standard. (See "ARI Withdraws Challenge to 13 SEER Rule," March 22.)

The increase in minimum SEER levels is the first since 1992, when the current minimum of 10 SEER was adopted.

Worries about the affordability of 13-SEER units (compared with those conforming to a lower standard) haven't gone away, but most industry experts believe employment in air conditioning manufacturing won't be adversely impacted. In fact, some manufacturers are planning on expansion.

The York Unitary Products Group’s (UPG) manufacturing facility in Wichita, Kan., produces residential HVAC products for its York, Luxaire, and Coleman brands. Pictured here are 400- and 500-ton coil feed presses that are used to fabricate sheet metal parts for air conditioning products. (Photos courtesy of York Unitary Products Group.)

Bracing For Change

Speaking on behalf of competitors in the market and colleagues in ARI, Thomas Huntington, president, York International Corp., Unitary Products Group, said, "The manufacturing community is unified today on the 13 SEER standard, and ... we have the wherewithal to meet it in a cost-effective manner."

Manufacturers seem intent on educating contractors and consumers on total home comfort systems that include not just higher-efficiency condensers and coils, but other components such as better filtration, humidity control, zoning, and control systems designed to deliver better indoor air quality.

While the imposition of the 1992 standard resulted in some stockpiling of less-efficient equipment, major makers don't anticipate such a result this time. They aren't encouraging distributors or contractors to stock up on 12-SEER-and-under equipment, but they will fulfill orders as needed until the Jan. 23, 2006 date.

York UPG material handler transports compressors to an assembly line.
"ARI withdrew its appeal in the Circuit Court of Appeals in order to give manufacturers time to prepare for the phaseout of units below 13," explained Ed Dooley, ARI vice president of communications/education.

One of the industry organization's concerns was affordability. "We liked the idea of more people having exposure to a 12, making it more affordable for them to replace their unit," Dooley said.

Since 2001, when ARI took that position, he noted, steel, copper and aluminum have all increased markedly in price, and the higher the efficiency, the more metal is required for heat exchangers, condensing units, and indoor coils.

An outdoor coil is staged in a machine for the bending operation.
York's Huntington said some of that impact can be eased on distribution and consumers thanks to advances in design, manufacturing technology, and management that have come into play in recent years.

"Specifically at York, we have already optimized our new-generation product design around 13 SEER and we are currently building competitive 13-SEER units," Huntington reported in a position paper early last month.

Ongoing efforts to build more efficient products have prepared many manufacturers for the upcoming change. "We already have lots of products above 13," said Sharon Brogdon of Trane's marketing department, noting the company expects a smooth transition with production workers simply shifting to the proper product lines as the changes take place.

Not that the process is easy, suggested Dave Pannier, board chairman of ARI and president, residential systems, for Trane and American Standard. Seeing the new rating as a challenge to manufacturers, he said that normally, "We would have had five years to plan for a change. This time we have less than two years." (See "What Does the Future Hold?" May 3.)

Completed air conditioners and heat pumps are ready to be moved to a loading area, where the units will, ultimately, be distributed throughout the United States.
"We've been planning on making a major design change around the new SEER levels since about the 2000 time frame, and it's been a process of studying what are the best core technologies and the migrations to get there," reported Halsey Cook, president of Carrier's Residential Division.

"We're well focused on the SEER 13 challenge and making sure that we have a product line commensurate with being the industry leader, which is what our customers would expect."

Goodman Manufacturing, which has supported 13 SEER since 2001, notes that it has been producing 13-SEER air conditioners since 1992. Its brands include Amana, Goodman, GMC, Janitrol, and QuietFlex.

At Carrier, plant and employment expansion is planned or under way at its Collierville, Tenn., condensing unit plant, its evaporator coil factory in Mexico, and the fancoil and furnace plant in Indianapolis. All the expansion is focused on 13-SEER products, said Cook. Carrier also makes Bryant and ICP (International Comfort Products) products.

A production employee on a York UPG assembly brazes outdoor coils.
"We need all the capacity we can get, and we're going all out to meet the demand," stated Doug Widenmann, senior director of marketing for the York Unitary Products Group.

"We're growing significantly and have been for the past two years. We don't see the efficiency standard as having an impact in the demand for our products. We're not in a retrenchment mode." He cites new plant and equipment investments in Wichita, as well as Apodaca, Mexico, and improved facilities in Norman, Okla.

A more cautious outlook comes from Doug Young, vice president and general manager, Lennox Residential. He said, "We're moving along in good fashion in preparing for the 13 SEER deadline, and all things look exceptionally promising.

"We believe there'll be an enhanced level of service to existing products on the installed base, as opposed to the replacement, which would impact the total industry volume such that the manufacturer will see less output, and so we will need to flex our manufacturing manpower to accommodate that lower volume."

A refrigerant leak test is performed prior to the final packaging of an air conditioning unit.

The Switch To R-410A

One change that seems almost certain to pick up speed as the 13 SEER deadline approaches is in refrigerants. Experts assert that R-22 will continue with a strong presence in the industry, but R-410A will become more commonly used.

"Although we think 2006 and 13 SEER will accelerate movement to R-410A, we'll still see a lot of R-22 units until manufacturers are forced to produce alternate refrigerant products in 2010," said York's Widenmann.

"We do believe that the industry will have a swift and significant move towards 410A as the new efficiency standard takes place because it then allows all products sold to utilize R-410A where today that's not the case," said Lennox's Young.

ARI's Dooley said, "Logic would dictate...an increase in the number of R-410A units shipped after 2006 for sure. It's already happening, not only on the residential but also on the commercial side."

"As the environmental leader, we want to see a faster adoption of Puron," said Carrier's Cook.

"R-22 is still a refrigerant that people are comfortable with, and we'll continue to supply contractors needing that type of equipment.

"We will have R-22 models available in 2006, but as more contractors become comfortable working with Puron, then the benefits, beyond the obvious ecological benefits, start to take hold in the industry. Such obvious benefits include focusing on one gas, and having more reliable, more efficient and more compact units to offer."

Next installment: Part two of this series looks at manufacturers' plans for education and training, as well as contractor and consumer marketing, to support the 13 SEER standard.

Publication date: 07/05/2004