The push to increase energy efficiency and reduce emissions continues to drive change in the HVAC industry. As a result, the government is instituting significant changes in energy efficiency criteria and ratings for both residential and commercial equipment.
Rather than viewing the regulatory changes as a problem to be solved, Rheem is embracing them as an opportunity to innovate new technologies to create an even better product line for contractors and homeowners.
To help you understand what’s changing, why, and how it’ll affect you, we’re pleased to bring you this HVAC KnowZone™ to act as a central hub, where you can easily access information as it becomes available.
In 2020, a bipartisan Senate bill, known as the American Innovation and Manufacturing (AIM) act, was enacted. It sought to address global warming by ushering in the next generation of refrigerants.
In addition to the new M1 requirements, the Inflation Reduction Act (IRA) has new 2023 updates. These include enhanced tax incentives and a new state-administered consumer rebate program that encourages homeowners to upgrade to HVAC systems with heat pumps and high-efficiency air conditioners and furnaces.
For equipment manufactured after January 1, 2023, the minimum standards have changed, and a new test procedure is required. These requirements vary by region but generally increased by about 7–10%.
With a company-wide commitment to excellence, robust product processes and relentless support of the installers who turn great equipment into reliable comfort systems, Rheem is always seeking to make the very best products possible.
When it comes to training and certifications, everyone connected to the HVAC industry benefits —contractors, technicians and even homeowners.
North American Technician Excellence (NATE) is the nation’s largest nonprofit certification organization for heating, ventilation, air conditioning and refrigeration (HVACR) technicians. Headquartered in Arlington, VA, NATE was developed by and has been supported by the industry for over 20 years.
ENERGY STAR® is the government-backed symbol for energy efficiency and provides simple, credible and unbiased information that consumers and businesses rely on to make well-informed decisions that help them save money and protect the environment.
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As the new DOE Requirements Take Effect Jan. 1, 2023, Rheem will be ready with the all-new Endeavor™ Line of Furnaces, Air Conditioners, Heat Pumps and Air Handlers. So even as regulations get tougher, your job gets easier.
Endeavor Features & Benefits
As of 2023, newly manufactured residential and commercial equipment sold in the U.S. must meet minimum efficiency standards set by the DOE. For single-phase residential and light commercial central air conditioning systems, the M1 efficiency requirements vary by region.
The new test method is commonly referred to as Appendix M1 and replaced Appendix M in the Code of Federal Regulations. For decades, we used the classic metrics of SEER, EER and HSPF. Now, you’ll hear these metrics referred to as SEER2, EER2 and HSPF2.
Commercial single-phase air conditioners and heat pumps <65k BTU/HR (typically those in the 3-, 4- and 5-ton range) follow the residential standards. Commercial systems ≥65k BTU/HR also have new minimum efficiency levels with compliance based on date of manufacture. Note that while the metrics of IEER and COP did not change, IEER and COP minimum efficiency levels increased from the DOE 2018 standard. EER requirements remain unchanged. See the table “DOE 2023 6 to 30 tons” for more details. The M1 requirements will apply to small 3-phase systems 5 tons and below starting January 1, 2025.
The 2023 requirements apply nationally—unless superseded by a regional standard.
The regional standards apply in the Southeast and the Southwest, and there is a key difference between the national and regional standards when it comes to enforcement. While both had a compliance deadline of January 1, 2023, the national deadline is based on the equipment date of manufacture, while compliance to the regional standards is based on the date of installation. Heat pumps do not have regional efficiency criteria, so the national criteria apply in all states.
Outdoor AC units manufactured prior to January 1, 2023, rated using Appendix M, can be installed in the Southeast and Southwest Regions, if the lowest FTC label rating (coil-only) is at or above the new minimum efficiency requirements on a conversion basis. Ratings based on Appendix M will need to be cross-referenced with the corresponding Appendix M1 values.
Understanding Compliance by Region:
North, Southeast & Southwest
Heat pumps and packaged AC systems manufactured prior to 1/1/2023 can continue to be installed, provided the equipment was compliant at the time it was produced.
Heat pumps manufactured prior to 1/1/2023 can continue to be installed, provided the equipment was compliant at the time it was produced.
In October 2023, the U.S. EPA finalized the Technology Transitions Restrictions on the Use of Certain Hydrofluorocarbons (HFCs) under Subsection (i) of the AIM Act, establishing GWP limits for the applications that use HFCs. The Technology Transitions Rule contains a 700 GWP limit for air conditioners and heat pumps by 2025, prohibiting the use of R-410A, which has a GWP of 2,088.
This rule has had quite the journey, going back to 2020 when the AIM legislation was enacted. Responding to recent concern by industry, EPA signed an interim final rule in December 2023, regarding the installation compliance date for residential heat pump and air conditioning systems. The amendment allows for installation of higher-GWP HFC equipment manufactured or imported before January 1, 2025, to be installed until January 1, 2026.
For 2025, the Environmental Protection Agency (EPA) has set a global warming potential (GWP) limit of 700 for refrigerant used in heating and cooling systems. This new requirement will result in a 78%3 lower GWP than previous-generation refrigerants—with only minimal changes to system installation. For us, this is another step toward our continued sustainability goal of reducing greenhouse gas emissions, while still delivering an exceptional level of energy efficient, dependable comfort.
1Air Conditioning, Heating & Refrigeration Institute. 2Heating, Air Conditioning and Refrigeration Distributors International. 3When comparing the GWP of R-454B to R-410A refrigerant.
It is essential to get familiar with the regulation specifics. EPA delineates the equipment categories of Products, Systems and Components, and the rules are different for each.
Packaged equipment are considered “Products” and have a three-year sell-through of existing inventory. “Systems” are considered a grouping of components, such as a split ducted AC/HP or mini-split, and that compliance is based on system installation, but equipment made before 2025 can now be installed through 1/1/26. “Components” are the major elements such as an indoor coil, outdoor condensing unit or air handler, and can be manufactured for R-410A indefinitely as long as they are only used for the service of already-installed equipment and labeled as such.
There is no federal preemption of state authority in the American Innovation and Manufacturing (AIM) Act. Both California and Washington have finalized state HFC rules, and other states are also considering doing the same. It’s important to note any differences between local and federal rules for your state, as the more stringent requirement prevails.
NOTE: In CA, R-410A condensing units manufactured prior to 1/1/25 can continue to be sold for service after the compliance date.
Furnace Efficiency Rule
On December 18, 2023, the DOE published the final rule for energy conservation standards of consumer furnaces, making official the new minimum annual fuel utilization efficiency (AFUE) of 95% in the Federal Register. Compliance with the amended standards will be required on December 18, 2028.
NOTE: The gas industry has launched a lawsuit against DOE, challenging the final rule. The result of the legal challenge will likely take some time to resolve, but stakeholders should continue to prepare for the 2028 compliance date as stated in the rule.
DOE is preparing regulations that will bring new metrics and a 28–35% expected increase in minimum efficiency for large commercial air conditioners and heat pumps. The traditional efficiency rating metrics of IEER and COP will be replaced by IVEC and IVHE, reflecting changes in the DOE test procedure that incorporate additional sources of energy consumption. The anticipated rules will be required for all new large commercial equipment by January 1, 2029.
ENERGYGUIDE 101
The FTC (Federal Trade Commission) first issued an Energy Labeling Rule in 1979. The Rule requires manufacturers of major home appliances to attach yellow EnergyGuide Labels to products and post label information to supporting brochures and websites.
Consumers should use EnergyGuide Labels to comparison shop for the best in energy-efficient solutions.
Split System Air Conditioner,
Cooling Only, Northern States
Split System Heat Pump,
Cooling & Heating, All States
The ENERGY STAR logo appears on all qualified products that meet specific standards for energy efficiency. The U.S. EPA ensures that each product that earns the label is independently certified.
2023 Changes
For 2023, as the test procedures are changing, so too are the qualifications for a product to be ENERGY STAR certified. In fact, an air conditioner or heat pump that earned the ENERGY STAR symbol before may no longer qualify. For example, the minimum efficiency for an ENERGY STAR-certified air conditioner in 2021 was 15 SEER. In 2023, that number will be XX.X SEER2, which is closer to 16 SEER in the old rating system.
When it comes to training and certifications, everyone connected to the HVAC industry benefits —contractors, technicians and even homeowners.
North American Technician Excellence (NATE) is the nation’s largest nonprofit certification organization for heating, ventilation, air conditioning and refrigeration (HVACR) technicians. Headquartered in Arlington, VA, NATE was developed by and has been supported by the industry for over 20 years.
NATE-certified contractors and technicians receive a high ROI. They’re considered valuable to employers and preferred among customers. So NATE-certified contractors and technicians are sought out. As such, their salaries are higher than their non-certified counterparts.
Homeowners using NATE-certified contractors and technicians receive:
What Is the NATE Program & Who Is It For?
Developed by a committee of industry experts, the NATE program is a series of exams that result in either certificates or full certifications and is designed for contractors and technicians of all experience levels. The entry-level tests, Ready-to-Work and HVAC Support are intended for those with less than 12 months of experience. Those who pass the tests earn a certificate, that identifies them as someone knowledgeable and trained in the field. More rigorous exams are required to receive a full NATE certification.
Who is Eligible for Full NATE Certification & What Does It Entail?
NATE certification is recommended for contractors and technicians with two or more years of experience. There are two certification testing pathways available: the Certified HVAC Professional (CHP-5) pathway, a series of five exams, or the Core and Specialty exam pathway, a series of two exams. For more information on either of these pathways, visit the NATE website.
Are There Training Courses Available to Help with Exam Preparation?
NATE has partnered with lnterPlay Learning to launch NATE Training Academy, which allows contractors and technicians to train for NATE certification exams online when convenient for them. The online training includes 3D and VR simulations that mimic in-field experience. Contractors and technicians can start prepping for NATE’s Certified HVAC Professional exam today. Additionally, this fall, training will be available for NATE’s Low-GWP refrigeration certification.
