Whether we like it or not, how we heat and cool our homes here on the Texas Gulf Coast is changing with new SEER2 HVAC standards. The Texas State Climatologist located at Texas A&M’s College of GeoSciences is predicting warmer weather for the state in the coming years. They expect more days of extreme heat with temperatures of 100 degrees and above. Conversely, researchers predict lower risk of snowfall, already quite rare on the Gulf Coast.

What does this mean for you?

If you’ve been watching the news, decisions about how the Texas economy will adapt to limit the impacts of severe weather can invite heated political arguments. It should not be political, however, to learn more about the factors that are changing the residential air conditioning and heating industry. These factors can help homeowners better understand how air conditioning and heating will adapt, so they can keep their homes comfortable long-term.

Read on to learn what SEER2 (Seasonal Energy Efficiency Ratio 2) energy efficiency standards you’ll find on the energy rating labels found on every home appliance means. We are sharing these trends to keep our customers informed about how the residential air conditioning and heating industry is adapting to market, climate, and regulatory conditions. The upshot: The U.S. Department of Energy’s new energy efficiency standards including SEER2 are a big deal.  

Here are four trends that savvy Texas homeowners need to know about:

Trend 1 – More HVAC technology & SEER2 Efficiency = Higher Prices

HVAC manufacturers are innovating as fast as they can. In recent years, we have seen thermostats you can control with your smartphone. Multi- or variable-speed air conditioners and heaters have set records for efficiency as motors and controller boards become more sophisticated.

Reducing energy consumption became a high priority in response to the 1970s energy crisis, a driver for innovation. This is why lawmakers passed laws that set up the U.S.Department of Energy’s Appliance and Equipment Standards Program, establishing a single federal energy efficiency standard. This program regulates the efficiency of many types of home appliances, including residential central air conditioners, heat pumps and furnaces.

It’s not surprising to learn that newer air conditioners and heat pumps are much more efficient than they used to be. “In fact, new air conditioners today use about 50 percent less energy than they did in 1990,” says the U.S. Department of Energy (DOE).

Technological Advancements in HVAC Require Specific Expertise

The downside of these technological innovations is that they cost more and require more training to install and repair correctly.  Some parts can be more expensive when they fail. And, repairs and installation require specific expertise in air conditioning and heating.

HVAC technicians are licensed by the state and they hold EPA permits to safely handle refrigerant. They are a very specific type of engineer who regularly navigates principals of refrigeration, ventilation, heating, electricity, plumbing, chemistry and building science to craft solutions that keep your home comfortable year-round.

Trend 2 – Expect Fewer SEER2-Compatible Budget Models of Air Conditioning and Heating Equipment

The DOE’s more stringent energy efficiency standards for central air conditioners and heat pumps go into effect January 1, 2023.  What this means for residential customers in Richmond, Texas and the surrounding area is that air conditioners must meet higher SEER2 efficiency standards before they are installed in 2023. The new test procedures are more stringent and designed to better test for real-world conditions.

Regional SEER2 Standards Present Challenges to HVAC Manufacturers

To meet new testing requirements, HVAC manufacturers are redesigning and renovating air conditioning and heat pump systems. Because some of the standards vary regionally, existing air conditioning equipment inventory that meets the energy efficiency requirements can be installed in the northern part of the United States. Conversely, in the southern part of the United States where our company operates, only NEW HVAC equipment meeting SEER2 requirements can be installed as of January 1, 2023. In the past older equipment in inventory had been grandfathered in, but that is not the case this time.

To say there is a mad scramble going on in the industry may be an understatement. Already in 2022, we have been working with supply chain disruptions, which has made getting the air conditioning and heating components we need for customers more challenging.  This is why we believe that many of the budget air conditioning and heating models are not long for this world. As the emphasis on efficiency heats up (no pun intended), we are betting that HVAC manufacturers will decide that the higher-efficiency HVAC equipment product lines will have a longer shelf life than budget models.

Trend 3 – Matching Systems Will Become the Standard

Another wrinkle to the updated energy standards that homeowners should be aware of is that there are penalties for non-compliance. Contractors, manufacturers, and distributors can face monetary penalties for knowingly providing and installing an “illegal air conditioner.” If reported, the DOE can request records from the HVAC contractor, distributor, and manufacturer who must respond within 30 days. If a violation of the standards is found, the contractor can replace the HVAC system with a system that does abide by the regional efficiency standards at no charge to the homeowner within that 30-day period.

Additionally, the DOE may assess penalties of up to $440 per violation against manufacturers, private labelers, or distributors who sell air conditioners or heat pumps to routine violators.  Routine violators may no longer be able to receive HVAC equipment to install. Those consequences are serious.

How these standards will be logistically enforced is a fair question. Regardless of the answer, we believe that HVAC contractors and installers will be repairing and installing legal HVAC equipment to factory specifications to the letter of the law. While there may have been more flexibility in the past to help homeowners keep their equipment longer, few HVAC contractors are going to risk such financial penalties.

Certified HVAC Matched Systems Offer Proven Efficiency

We predict that parts for older equipment will phase out more quickly, making it more cost-effective to purchase new and more efficient systems that are matched.

An AHRI-matched system refers to air conditioning components that are designed to be used together. AHRI refers Air-Conditioning, Heating, and Refrigeration Institute, which tests HVAC systems and certifies the efficiency of air conditioners and heat pumps.

“You can verify your split system is a properly matched by asking your HVAC technician to provide you with an AHRI Certified Reference Number (formerly ARI Reference Number) or an AHRI Certificate of Product Ratings (formerly Certificate of Certified Product Performance). The reference number can be entered into the CEE Directory to verify that you have a matched system and to obtain a Certificate of Certified Product Performance.”

The upside of newer and more efficient HVAC systems is that they will be friendlier to the environment while saving you money on utility bills.

Trend 4 – Demand for Heat Pumps Will Increase

We predict that the demand for heat pump systems will continue to increase, especially in our climate which trends toward hot and less toward cold weather.  Heat pumps are operated using electricity with the ability to provide both cooling and heat. Their special “reversing valve” enables the heat pump to reverse the flow of refrigerant. This is why it can pump in cool air in the summer and then switch directions and pump in warm air in the winter.

The High-Efficiency Electric Home Rebate Act, included as part of this year’s Inflation Reduction Act, offers rebates for low and middle-income residents, who choose to switch out appliances for electrical ones, such as highly-efficient heat pumps and water heaters. Policymakers don’t expect those rebates to be available until later in 2023, though. It does speak to the rising demand and incentives becoming more available for electrification at home.

How Will More Electrification Affect Homes & Neighborhoods?

Our thought bubble: It remains to be seen how electrifying more residential appliances will affect the Texas electrical grid. We wonder if homes and neighborhoods will require costly electrical upgrades. According to the Texas Comptroller, Texas already leads the nation in energy consumption. More clean energy is available but the lack of transmission lines from West to East Texas keeps energy prices in the Houston area high.

A federal report issued in October 2022 declared the state’s electrical grid was still vulnerable to extreme winter weather, an assessment that the Electric Reliability Council of Texas disputes. Even the Natural Resources Defense Council (NRDC) points out that neither gas-powered furnaces nor electrical-heat pumps will run without electricity if the power grid goes offline the way it did for Winter Storm Uri in 2021. They recommend both switching to electrical heat pumps AND making overall energy efficiency improvements, such as adding insulation.

We also question whether the rising cost of HVAC equipment and required upgrades will come as a shock to homeowners who may not have been aware how new regulations will affect their home’s HVAC system.

Plan Ahead for SEER2 and DOE’s New Efficiency Standards

If you’re looking for a new heat pump or air conditioning system this fall, give us a call at 281-495-7830 and we can talk you through the options available. We’d welcome the opportunity to earn your business. A Ruud Pro Partner™, Terry’s A/C & Heating serves homeowners and businesses in West Houston and throughout Fort Bend County, Texas.