Goodman believes that the simplest method for reaching these three goals is to raise the minimum standard for air conditioners to a level of 13 SEER from the current level of 10.
Given the tremendous benefits associated with the 13 SEER standard, Goodman believes that the Department of Energy’s (DOE’s) decision to roll back the original standard of 13 SEER to a newly proposed standard of 12 lacks merit. In our opinion, the DOE appears to be basing its decision on several misconceptions surrounding the 13 SEER standard.
The first of these misconceptions is the claim by the DOE that not all manufacturers have the capability to produce the more efficient equipment, thus limiting consumer choice. In fact, 13-SEER technology has been available to both large and small manufacturers for approximately 15 years.
According to Air-Conditioning and Refrigeration Institute (ARI) data, virtually all manufacturers produce 13-SEER equipment today. In reality, the only difference between a 10-SEER unit, a 12-SEER unit, and a 13-SEER unit is a little more copper and aluminum. Given the fact that the units have equivalent technologies, we at Goodman run all of our equipment down the same assembly line.
Another Look at CostA second misconception is that the 13 SEER standard would cost consumers substantially more money than the proposed 12 SEER standard. This is not true. According to the DOE, the average difference in cost between a 13- and a 12-SEER unit today is approximately $122. Since a 13-SEER unit is 8% more efficient than a 12-SEER unit, consumers will save more on their electric bills each month for the life of the unit. Thus, over an average life of a home cooling unit, the savings will easily cover the increase in cost between a 12- and a 13-SEER unit.
Moreover, Goodman is confident that with the implementation of a 13 SEER standard, the market will drive prices down and make the more efficient equipment more affordable for all consumers. How do we know this? From experience.
In 1992, when the government implemented the efficiency standard of 10 SEER, the cost of the 10-SEER a/c unit dropped dramatically across the nation. The reason for the change in price is simple. Once the standard is set, more sales of that type of unit occur and more volume is manufactured, thereby allowing the manufacturers to run their plants more efficiently and pass savings on to the consumer.
Some believe that the slight increase in cost would deter a consumer from purchasing a more efficient unit. However, we believe that when considering the purchase of a unit that is between $2,000 and $5,000 dollars, the difference in cost is negligible. In any case, the additional cost of the 13-SEER unit would only take 1.2 years longer to recoup than a 12-SEER unit, according to the DOE. After that time, the consumer will profit continuously from the more efficient 13-SEER unit.
Lower Income FamiliesIn addition, critics of the 13 SEER standard have routinely expressed that the 13 SEER standard will negatively impact lower income families and the elderly. This too is a misconception. The Department of Justice issued a report stating that most low-income families with central air rent their homes. It is our assessment that they would benefit from the energy savings and lower electricity bills associated with a 13-SEER unit without bearing the actual up-front equipment costs. For those low-income families who must purchase a central air unit, the incremental cost of improved efficiency will be made up through lower utility bills.
Finally, in our opinion, Goodman has a marketing philosophy of selling in volume. The incremental cost to the manufacturer to produce a 13-SEER unit is only about $100, and we feel that the most efficient technology should be available to people of all income levels at an affordable price. However, some manufacturers may be seeking protection of higher profit margins on their more efficient equipment. A 13-SEER standard would force all manufacturers to be truly competitive and provide all consumers with the most-affordable energy-efficient technology for air conditioners that is available today.
In conclusion, we believe that there are actions Congress can and should take to address the unfortunate decision by the DOE to roll back the higher standard for central a/c and heat pump units to only a 20% increase in efficiency. In fact, the 13 SEER standard would be more consistent with the president’s effort to promote energy efficiency and conservation.
To provide longer-term solutions to meet our energy and environmental goals, we need a national energy policy that promotes energy efficiency, conservation, and new supply technologies. Goodman urges Congress to continue to focus attention on improving appliance efficiency standards for a/c and heating products.
John Goodman is president of Goodman Global Manufacturing, the second largest air conditioning, heating, and appliance manufacturer in the nation. Its name brands include Amana®, Goodman®, GmC®, and Janitrol.
Publication date: 08/20/2001