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DOE CHANGES FOR NORTH ZONE in 2023

US Regulatory Guide

The Department Of Energy or DOE has rolled out new regulations for energy efficiency and emissions that take effect in 2023. These national regulatory changes impact the HVAC industry by making significant changes to the way efficiency requirements are calculated. Since Webb Supply is located in the North Zone, this article will focus on the changes in this region.

Minimum Efficiency Requirements

The new regulations from the U.S. Department Of Energy are aimed at reducing energy consumption and carbon emissions by establishing minimum efficiency requirements. Starting January 1st, 2023, any single-phase air conditioner or heat pump greater than <65K BTU/H will have new efficiency levels. The 2023 changes in regulation apply on a national level unless superseded by a regional standard. The regional standards only apply in the Southeast and Southwest regions, and the difference between the national and regional standards how they are enforced for compliance.

How do the DOE Efficiency Standards Impact The North Region?

The regulations were rolled out before the Inflation Reduction Act was passed. The goal of these changes is to reduce dependency on fossil fuels while increasing energy conservation standards. Due to the seasonal changes in the northern states, the regulatory requirements are a little less strict. The DOE is allowing manufacturers and distributors to sell through existing equipment inventory manufactured before 2023 without being penalized for noncompliance. When the old equipment is sold out, HVAC distributors must move to the new Appendix M1 units.

Image of a map depicting the North Zone defined by the Department Of Energy

Appendix M1: A New System of Measurement

A provision in the “Energy Independence and Security Act Of 2007” established a precedent in which the DOE reviews testing procedures every seven years. This same provision from the DOE established appendix “M” which implemented a “Uniform Test Method for Measuring the Energy Consumption of Central Air Conditioners and Heat Pumps”. Appendix M also introduced the efficiency standards of SEER Ratings, EER, and HSPF. With the constant improvement in technology, this rating system quickly became outdated. in 2017 the U.S. Department Of Energy began the process to reevaluate energy savings which is what helped develop the new minimum efficiency standards presented in Appendix M1 or just “M1”.

What Changes Are Coming?

The industry standard ratings we know (SEER, EER, and HSPF) are getting a facelift. After January 1st, 2023 these ratings will be known as EER2, HSPF2, and SEER2 ratings. The metrics are changing to better reflect the field conditions of the installations in today’s homes. The new metrics will apply to all single-phase air conditioners and system heat pumps that are <65k BTU/H.

Understanding Compliance in The North Region

For The North, compliance is based on the date of manufacture. If the HVAC equipment (central air conditioner, heat pumps, furnaces, etc) was part of an AHRI-rated system match and met energy efficiency requirements on the day they were produced, the product is still considered to be compliant. Products with a manufacture date after January 1st, 2023 are subject to different efficiency ratings and new test procedures. Here’s how the new equipment must be rated.

Table explaining the 2023 Department Of Energy Regulations for Heat Pumps and Air Conditioners using the new test procedures for SEER2 and HSPF2.

How Does This Effect Light Commercial Applications?

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 going into effect in 2023 on a national basis, with compliance based on date of manufacture. Note that while the metrics of IEER and COP are not changing, IEER and COP minimum efficiency levels are increasing from DOE 2018 standard. EER requirements remain unchanged. See the table below for the 2023 requirements. At this time, DOE has not issued a new efficiency standard or metric that applies to the category of small 3-phase systems, 5-ton and below, but these are under consideration.

Table of 2023 Efficiency Standards for Commercial air conditioners and Heat Pumps in the north zone.

Enforcement

The DOE and environmental protection agency are set up to be aggressive in enforcing these regulations. While the North is set up in the proverbial “catbird seat” for the time being, noncompliance can result in significant penalties.

The Inflation Reduction Act – How it impacts the HVAC Industry

Inflation Reduction Act

The HVAC industry has been changing over the past few years. In early 2022 the Department Of Energy (D.O.E) announced the efficiency and refrigerant changes rolling out in 2023 and 2025. The Inflation Reduction Act (I.R.A) is the latest facelift to the industry and it has some significant impacts on how distributors and installers think.

What is the Inflation Reduction Act?

The inflation reduction act was passed into law on August 16, 2022. The law was introduced as a bill in 2020 under the name of the “Build Back Better Act” which was focused on deficit reduction, lowering prescription drug costs, and promoting clean energy. When it passed in August of 2022, the law became the largest piece of federal legislation to address climate change. The new law allocates over 200 billion dollars for energy projects. That’s where the HVAC Industry comes in.

How This Impacts HVAC Professionals

The overall goal of the I.R.A. is to combat climate change and carbon emissions by promoting renewable energy. This means the industry will see a reduction in combustion units like natural gas furnaces and a push to install more energy-efficient units like heat pumps. To help facilitate the reduction of emissions and energy costs, the bill allows for incentives to help mitigate out-of-pocket costs for businesses and homeowners. Two different types of rebates will be available and we break them down below.

How To Leverage The Inflation Reduction Act to get more business

Heat pumps are by no means new to the industry. Already popular in the southern states, a heat pump is a great alternative to a natural gas furnace or Air Conditioner. Powered by electricity, heat pumps have both a heating and cooling element and can heat and cool houses with one unit. With sustainability and making money stretch being increasingly important to the American people, heat pumps reduce greenhouse gas emissions and reduce dependency on fossil fuels. Added benefits to switching units are improved indoor air quality, cost savings, and improved safety.

The HOMES Rebate Program

The Homes Rebate Program was introduced through the I.R.A. and helps homeowners manage costs while reducing energy production. This program follows two different models: Modeled performance, and Measured Performance. Household eligibility for the tax credit is defined as low-income to moderate-income houses, and the rebate amount is based on the energy cost savings measured after retrofitting the units. After installation, the minimum energy efficiency rating should be at 35% savings.
While the language in the I.R.A. sets up the process and rebate amounts, there has been nothing set in stone. The new law specifically allows the programs to be enforced on a state level, leaving the tax credits and rebate amounts in limbo until ratified by each state.


The Inflation reduction Act is still being rolled out. Webb Supply is here to be a resource our customers can rely on. Be sure to check www.webbsupply.com for the most up-to-date news regarding the HVAC industry.