ContractingBusiness.com and Supermarket News magazines brought leading refrigeration contractors and supermarket executives together to discuss the challenges they face in the new refrigeration era.
Part III: Refrigerants & Product Warranties
What does the future hold for refrigerant replacements?
Can product warranty terms be improved? Our panel talks it out.
The ContractingBusiness.com and Supermarket News Refrigeration Roundtable was held during HVAC Comfortech/HVACR Week in September 2010. This one-day event brought together leading refrigeration contractors and their supermarket customers to discuss issues and share best practices.
Hill Phoenix, Heatcraft Worldwide Refrigeration, and Service Net HVACR Division sponsored the event. Sponsor panelists were John Gallaher, director of marketing and business development, refrigeration systems division, Hill Phoenix; Grady McAdams, vice president of sales and marketing for North America, Heatcraft; and Craig Funke, president/CEO, Service Net HVACR Division.
What does the future hold? The answer, at least in the world of supermarket refrigerants, is unclear, as the phaseout of R-22 continues.
Dan Steffen, vice president, AAA Refrigeration Services, Bronx, NY — the 2008 ContractingBusiness.com Commercial Refrigeration Contractor of the Year — says that while many of his smaller customers are sticking with R-22 systems and putting off conversions as much as possible, larger customers face an at-times bewildering decision of "the flavor of the month."
"The phase-out of R-22 has led to a situation that’s akin to visiting a Baskin-Robbins ice cream shop," Steffen says. "As we meet with customers who don't come to energy conferences and keep up-to-date, they don't know which 'flavor' to go with."
Refrigerant and equipment manufacturers tend to promote their latest refrigerant alternatives, and that tends to create confusion and challenges, according to Steffen.
"R-404A was the solution for a while. Everyone got on the bandwagon and started pushing R-404A, which led to us recommending it to our customers. Then, the pendulum swung to R-422, and focus shifted to R-422. We're now seeing R-407 dominating the conversion market. And, I haven't even mentioned MO99," Steffen says.
"We're not alone in wondering, which refrigerant is ultimately going to be 'the one'?"
Jon Perry is director of energy & maintenance, Farm Fresh, Virginia Beach, VA. Farm Fresh operates a chain of 43 supermarkets in Virginia and North Carolina. He says environmental issues make R-407A the leading candidate to ultimately dominate the refrigerant arena.
"R-407A has a relatively low global warming effect compared to R-404 and some of the others," Perry says. "Because of that, many of the chains I've spoken to are going in that direction, and also because R-407A performs comparably to R-22."
Ironically, refrigerant manufacturers themselves may be waiting for market forces to take effect before deciding which refrigerant they'll make a major commitment to, according to Harrison Horning, director of energy and facility services, Delhaize America, parent company of Hannaford Bros., Scarborough, ME.
"Nobody wants to be on the bleeding edge of this, so when you see some of the big players going in a certain direction, then you know the chemical companies will make it their war," Horning says.
Stan Shumbo, president, Eastern Refrigeration, Colchester, CT, agrees that there can be a wait-and-see attitude at work that can delay full implementation.
"Our independent customers kind of sit back and let the 'big guys' test out various refrigerants and see what's going to be the right thing to do," Shumbo says. "Quite honestly, I wouldn't make a recommendation to my customer until [a refrigerant] has been out there for a while."
Most contractors and their customers aren't finding the phase-out of R-22 to be a major issue. There's some "stocking" of R-22 taking place, but it's well short of what could truly be called "stockpiling."
"The phase-out of R-22 has not been an issue," says Jim Galehan, HVACR manager for Giant Eagle. He says that at the time the R-22 phase-out first started, the supermarket chain started a "banking" program of R-22 when it performed refrigerant conversions.
"We're not really stockpiling it, we're just keeping it in stock and having it available for our existing systems," Galehan says.
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Horning is a member of the Environmental Protection Agency’s (EPA's) GreenChill program. GreenChill member stores must reduce refrigerant leaks, and use more green refrigeration technologies, strategies, and practices. The program also includes refrigeration manufacturers and refrigerant producers as members. It’s hoped that someday refrigeration contractors would be admitted to the group.
"One of our obligations as a member of GreenChill is that when we install a new system, or perform substantial work or a major overhaul on an existing system, we upgrade to an HFC and reclaim the R-22," Horning explains. "We then keep the R-22 on hand until we find that we have enough to keep us going. As we have fewer and fewer stores using R-22, the reclaiming process itself is enough to get us what we need. I wouldn’t call it stockpiling, it’s more like having just-in-time stock."
Warranty Work Brings Caution
Quality contractors combined with forward-thinking customers are what make positive change happen in an industry, and create valuable partnerships. Cooperation and relationships are the foundation of success, and warranty work and the availability of extended warranties are among the industry’s top relationship builders. But there are some gray areas in manufacturers’ warranties — and some contractors who try to "game the system" — and that makes warranty work a difficult subject at times.
Every vendor will back their product, especially for larger customers with legitimate complaints, says Perry. However, contractors who install systems that have a refrigerant leak caused by a manufacturing defect still "own" that leak.
"A manufacturer will reimburse you for your time and for the refrigerant, but you still own that leak in your leak rate," he says. "You may have properly installed a brand-new piece of equipment, but if it just leaked five drums of refrigerant, you still have a 500-lb. leak on the books. Why don't manufacturers have any ownership if the leak was from the factory? The leak is always attached to the contractor, never to the manufacturer."
Charles Dinsmore, director of engineering, Weis Markets, Sunbury, PA, says that although the end user ends up bearing the responsibility for any breakdowns or problems during the warranty period, the problem could have been caused by any number of people who handled the system or its components throughout the manufacturing process.
"It's very difficult to say where the problem may have been introduced into the equipment," he says.
Steffen adds that factory warranties can occasionally lead to difficult battles with manufacturers.
"We recently had some condensers delivered. We installed them, and made everything tight. But we still lost refrigerant," Steffen says. "We had to fight with the manufacturer to get the gas replaced. They said, 'We only warranty the work; we don't warranty the refrigerant.' They didn't want to hear my argument that the leak was internal and was clearly caused by a manufacturing error. We really felt that the refrigerant was not something that should have come out of our pocket. So it's a battle at times to deal with the warranty side of things."
Craig Funke, president/CEO, Service Net HVACR Division, says he understands the manufacturers’ perspective, and says they can't be expected to just "open their checkbook" for refrigerant across the board. However, most manufacturers, he says, will replace refrigerant if you can prove to them clearly that it was caused by a manufacturing defect, or caused by a component that failed in an inordinately short period of time.
Sometimes it's necessary, he adds, to enlist customers' support to encourage manufacturers to reimburse a large claim.
"I think we need to go back to the idea of partnerships, Funke says. "Let's face it, there are some people in our industry who are not always honest and may try to take advantage of the manufacturer. That's why rules are set in place. So, as a contractor, there has to be a relationship and a partnership not only with your customer, but also with the manufacturer. And some of it can be aided by tracking, recordkeeping, awareness, and monitoring, to help prove and verify for the manufacturer when the leak happened."
Steffen sympathizes with manufacturers, but says manufacturers should be aware of who their quality contractors are, and not assume that all problems that occur during the warranty period are the result of poor installations. However, he admits that the situation can be difficult to sort out.
"I know it must be a tough balance, because some of the installs that we've been called in on afterwards are definitely not manufacturer issues," Steffen says. "It's because someone cut costs and brought in a contractor that didn't know how to set cases, or took shortcuts."
Funke agrees. "We run into that an awful lot, and it's challenging," he says. "You end up having to become an arbitrator at some point. Typical mechanical breakdown insurance is just that. Something's going to break in a normal course of operation, and that gets replaced or repaired. But when the breakdown is a symptom from the installation, or a specification that wasn't quite up to the manufacturer's standards, a lot of finger-pointing gets started."
Ultimately, the demands of the marketplace may lead to manufacturers or third-party warranty companies offering all-inclusive options to customers. These would — at least in concept — replace the typical 30-day or 1-year parts warranties with fixed cost solutions of up to five years.
"That seems like a requirement that's coming forward from the supermarket side of the business," Funke says. "We're trying to monitor that business, and discover how attractive that option would be to them."