Are you ready for the start of the HCFC R-22 phaseout? On January 1, 2010, the production and import of the HCFC refrigerant R-22 will cease (unless for use in equipment manufactured prior to that date). Until 2020, R-22 will only be manufactured and imported in amounts deemed sufficient to service existing equipment.
For this article — our last in our series of articles on the phaseout over the past year — we spoke with refrigerant formulators and equipment manufacturers, to learn if they believe the industry is ready — or not — for the R-22 phaseout.
Our panel of experts: Joyce Wallace, global business manager, DuPont; David Diggs, global business director, Honeywell; Bob Swilik, director of product management, Carrier Corp., Craig Thomas, business manager, refrigerants, Arkema North America; Gus Rolotti, technical marketing director, fluorochemicals, Arkema North America; Gordon McKinney, president, ICOR International; Ken Ponder, president, RMS of Georgia.
The deadline for the first big step towards a total R-22 phaseout is less than two months away. How have HVAC contractors responded?
Joyce Wallace: “Awareness of the R-22 phaseout for new equipment is certainly growing. We see that in the corresponding sales of R-410A to original equipment manufacturers (OEMs), and to the aftermarket as well. We've seen these sales continuing to increase all year long. However, while contractors seem very aware of the new equipment aspects of the R-22 phaseout, awareness is not as high as it should be, relative to R-22 supply issues, and servicing of existing R-22 equipment.”
Bob Swilik: “For Carrier Corp, this is a bit of yesterday's news. We've been using Puron (R-410A) for 14 years. About 80 to 90% of our business in 2009 is already in R-410A. We hear of contractor concerns only in cases where contractors are trying to use components that are already in place, such as linesets that are in a wall and can't be replaced. Or, maybe they changed out a coil a year or two ago in an R-22 system and would like to continue using that coil with an R-410A system.
“Those questions have pretty well been answered, and we have well-documented procedures in place for dealing with those types of things.”
David Diggs: “Contractor response to the new equipment R-22 phase-out has been varied. By and large, however, they've learned to use HFC-based equipment, through training offered either by OEMs, or through
wholesalers. The new products are safe to use and provide energy efficiency benefits. The technology is basically the same; the only changes have been to the oil and the pressures, which are a little bit higher.”
Craig Thomas: “As the R-22 OEM phaseout approaches, we've seen some HVACR contractors who've taken the initiative. They've found it to be a good opportunity to obtain more R-410A training and education. We've seen a bump in contractor participation in Arkema's training. From an overall perspective however, in terms of the amount of activity related to moving on from R-22, the progress has been rather slow. We don't see the visibility and volume of reclamation activity as we thought we'd see. Part of this is due to the fact that it's a costly activity for contractors. Like anything else in this industry, it seems like we wait until the change is upon it, and then we adjust.
“The bottom line is, that R-22 supply will be reduced in 2010 by the Environmental Protection Agency. How that will affect pricing will depend on demand. R-22 demand has been reduced by conditions in the economy.
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“There will be some changes next year related to the supply and demand of HFC refrigerants. We'll see a large shift in demand toward R-410A. All the components that go into R-410A refrigerant will see more pressure. I think the industry has done a good job of developing supply to meet the expected demand.”
Ken Ponder: “For the most part, contractors are responding as we would expect them to. Typically, the owners of larger HVACR contracting businesses are more progressive in their thinking. The smaller companies are unsure about whether there's going to be a refrigerant shortage, and if the need for reclamation is what the EPA is saying it needs to be.
“Additionally, there's still a lack of awareness among certain commercial end-user groups. I recently attended a meeting of the Georgia Association of School Facilities Administrators (GASFA), and I discovered that most school board administrators in the state were completely unaware of the coming phaseout. It was shocking to see so much misinformation within a group that large.
“So, we did a little math for them. Based on the Montreal Protocol's stated 75% reduction in production and importation of R-22, if normally they would purchase 10,000 pounds of R-22 in a given year, in 2010, they'll only be able to obtain 2,500 pounds. When you look at it in terms of the math, it's amazing how clear it becomes. They realize they need to be reclaiming R-22 and looking at alternative refrigerants.”
Gordon McKinney: “There are still many technicians who are behind the curve, especially in the air conditioning sector. They've been insulated from these changes, except for a few of the progressive ones, who have been selling R-410A systems over the past decade. I still think the vast majority of people don't fully understand the magnitude of the change that's going to occur over the next 18 months or so.
“The price of R-22 has stagnated, or even dropped. This is because of surpluses that were created by anything from weather to hoarding. And, there are distributors who've stocked up in anticipation of the phaseout. People have become a little complacent; they think there's plenty of R-22. But, it won't take long to move the supplies through the channel, especially when you consider how much R-22 is used for service every year. I've seen numbers of 120 to 150 million pounds.”
Are contractors aware of and receptive to their new refrigerant options?
Joyce Wallace: “Since the early 1990s, and the start of the CFC phase-out, contractors have faced an ever-changing landscape of refrigerant choices. So, this is not something that's new to them. The period of transitioning out of HCFCs is a continuation of this dynamic. It continues to offer opportunities for innovation and differentiation by contractors. While it's a time of change, they're not facing this alone.”
How can contractors stay ahead of the game?
Joyce Wallace: “The most important thing for contractors to do is to educate themselves on the changing supply conditions surrounding R-22, and become familiar with the HFC replacement alternatives and their performance.
“The best advice is to take action now. Contractors who make the shift from awareness to action, and do so before the R-22 shortfall, will be in the best position to really offer this as an opportunity for their customers and differentiate themselves. In these economic times, business is tough, and not everyone can afford new equipment. We believe there's a real opportunity for contractors to position themselves as leaders. They can do this by understanding the refrigerant options and by keeping their customers' equipment running longer with HFC alternatives. The more proactive contractors will be in the best overall position to service their customers and grow their business.”
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Craig Thomas: “Contractors need to keep up with the changes in the HVACR industry. It's just like any other business. Those with in-depth knowledge of the business and its changes will have the competitive advantage. Arkema's stepped up its efforts in terms of seminars and discussions. And, I think the industry has done a good job as well. The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) has initiated phaseoutfacts.org, and there are many other sources of information available.
“We're preaching responsible service practices. With all the new refrigerants, there will be a premium on good service practices. Contractors will find there's a value to following proper procedures.”
Do you see increasing trends in terms of retrofits versus replacements?
Bob Swilik: “People are retrofitting rather than replacing. I think that's mostly a legacy of the efficiency change in 2006 that drove equipment prices higher. It increased the cost ‘delta’ to replace rather than repair. The other factor is the recession. There are many people who are trying to spend the least amount of money that they can. Even if it means spending more money later they seem ready to repair rather than replace. Those forces are driving the repair-versus-replace decision more than any type of refrigerant change is.”
Gus Rolotti: “People are thinking with their wallets. They'll replace inefficient systems that are costing more to service and operate. The decision to repair or replace is made for them.
“If we're talking about a system that's going into a new supermarket or a remodeled supermarket, chances are it will be a brand new system. If the system is in good operating condition, is efficient, without leaks, and is economical to run, the owner will probably choose to repair and continue using that system. If everything is equal, and it's not going to cost more, they'll try a greener alternative.”
What can be done to fill the supply vacuum?
Joyce Wallace: “In January, 2010, the production and import allowances will be decreased significantly as the EPA implements the next step in the phaseout of R-22. This will result in a 58% decline in import and production allowances, and that will have a major impact on supply/demand dynamics as early as January. EPA service demand is expected to exceed supply by 27.5 million pounds starting in 2010. Therefore, contractor focus should be on leak reductions, increased reclaiming and recycling of R-22, and retrofitting to HFC alternatives.”
Gordon McKinney: “There are four ways we can close the coming gap between the supply and demand of R-22:
“One, install more new equipment charged with non ozone-depleting refrigerants. However, in a down economy, with equipment sales hurting, I don't think we're going to see new equipment significantly close that gap.
“Two, tighten systems up. The EPA has tried this approach, increasing the requirements on leaking systems and record-keeping. But I'm not sure that's ever worked. I think the estimates on how much refrigerant leaks from systems every year is grossly underestimated. Tightening the regulations may help, but it's not going to be a solution.
“Three, reclaim. However, that market hasn't expanded. The amount of refrigerants that are reclaimed and recycled by the industry as a whole is a laughable. It's less than 10 million pounds. It's dismal. So how much is reclaimed and recycled refrigerant going to contribute to closing the supply-and-demand gap? I wish I could be more optimistic.
“Four, use alternative refrigerant replacements, non-ozone-depleting replacements. Alternatives were the saving grace when CFCs were phased-out. We look for alternative refrigerants to play a significant role — maybe the significant role — in meeting the gap between the demand for R-22 and the supply of R-22.”
How will the changing refrigerants and continued scrutiny of fluorochemicals affect contractors?
David Diggs: “The main change is that service practices have improved. It's against the law to intentionally vent refrigerant, so contractors should be reclaiming the refrigerant during service calls. More importantly, with the EPA reduction of the allocation of R-22, they're relying on reclaimed R-22 to meet some of the estimated demand required to meet service needs.”
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How have alternatives been accepted?
Ken Ponder: “We're disappointed that compressor manufacturers haven't adopted and condoned the use of alternative refrigerants as much as they have accepted R-410A. If there's a shortage, there's got to be a service gas that's used. It can be any of the alternatives, as long as some gets traction in the residential marketplace.
“The commercial refrigeration sector, for example, has made some progress. It's opening the door for several of the other alternatives to be recognized as a service gas in place of R-22.
“Compressor manufacturers say they're not sure about materials compatibility. However, they build R-134A and R-410A compatible compressors. If you look at the materials in those compressors as being nearly identical, it doesn't require a big leap of faith to realize that here's a fluid that has both of the refrigerants in it that run in either of the two independent compressors. There's nothing in the gas to hurt the compressor to begin with.
“The dependability of oil return is another issue compressor manufacturers are concerned about. And I understand. If I were them, I wouldn't make a blanket statement that it will run in any system without doing the tests. But, at the same time, none of them involve themselves with the refrigerant manufacturers enough to inquire about how those systems are performing.”
How will systems evolve in the future?
Bob Swilik: “I think higher efficiency standards are coming. We'll have to push the technology beyond where it is today, and look at things such as variable speed compressors, more zoning, better humidity control for tighter homes, and energy recovery ventilators. Those types of things will become more prevalent.”