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Seasonal Energy Efficiency Rating (SEER)

As of January 23, 2006, manufacturers of heating and air conditioning equipment can no longer manufacture single-phase central air conditioners and heat pumps with output of 65,000 BTUH (British thermal units per hour) or less, with a Seasonal Energy Efficiency Rating (SEER) of less than 13. There has been considerable debate as to the impact of this change on homeowners and landlords. The simple fact, we believe, is that the impact will be minimal except for a gradual savings of energy over time. First, some background.

A history of efficiency

Progress in regulating the efficiency of HVAC equipment has been slow. The Energy Policy Act of 1992 established a minimum SEER for air conditioners of 10. SEER is defined as the total cooling output (in Btu) provided by the unit during its normal annual usage period divided by its total energy input (in watt-hours) during the same period. The Energy Policy Act of 2002 raised that minimum to 13. This change represents an approximate 30 percent increase in efficiency over the current standard and, according to the Department of Energy (DOE), will save 4.2 quadrillion Btu’s (quads) of energy between 2006 and 2030. The DOE is charged with regulating compliance with these requirements.

How is efficiency gained?

To gain efficiency, the heat exchange surfaces – the evaporator coil on the inside and the condensing coil on the outside of the structure – are made larger. These standard components of a “split system” generally are sized to work together to obtain the desired efficiency. Change one end of the system and not the other, and you may not reach the required efficiencies of energy usage.

Further, by changing the size of the components, a variety of questions have been raised by many who either opposed the change or simply are concerned about the impact of this change. Among those we have heard are:

  • The new equipment will be dramatically more expensive because of increased manufacturing costs and shipping and handling costs.
  • The new equipment, because of its increased size, will be difficult to retrofit into existing locations.
  • Repairing existing systems will be difficult because of limited availability of parts.

Let’s examine each of these.

What new concerns accompany higher efficiency equipment? 

It is important to understand that equipment with a SEER rating of 13 is not new. High- efficiency air-cooled equipment with a SEER as high as 18 has been manufactured for quite some time.

Units with a SEER of 13 are more expensive than SEER 10 units. However, although manufacturers are just establishing 2006 pricing, we would not expect to see any pricing premium over previous prices for these units. And, with the dramatic increase in energy prices in 2005/2006, we anticipate little resistance to – and in fact, great acceptance of – higher efficiency equipment.

There will also be isolated cases where the new units are larger than existing units and would represent installation difficulties. For example, condensing coils sitting next to each other on pads in multi-family complexes may not accommodate larger units. However, although the condensing unit will be larger, each manufacturer’s unit has a different profile. Thus, in some cases, a taller unit may fit where a wider one wouldn’t, and vice versa. In addition, many manufacturers will be building condensing units using aluminum coils with extruded tubes (similar to many automotive condensers) rather than the traditional copper tube/aluminum fin coils. These coils will, in many cases, allow the condensing unit size to remain comparable to the old 10 SEER units. A few manufacturers already have these coils on the market in their highest-efficiency units, but more are sure to come.

Evaporator coils in closets or within the framing of these same units may not fit. However, these problems will not be unique to the new equipment. Contractors we have spoken with deal with such problems already. And again, whereas different manufacturers make equipment with different dimensions, if one brand does not fit, another might.

As for the availability of parts, we have heard stories of some shortages, but overall, we do not expect significant problems in this area either. There remains a huge installed base of existing units out there. Manufacturers such as Trane and others have indicated that replacement parts for these units will be available for at least the next ten years. Further, the electrical parts and components – switches, fans, contacts – tend to stay the same from model to model. No shortage of that equipment is expected.

Advice for property managers

Owners of multi-family and small commercial buildings should think through their approach to HVAC equipment in light of the new standards. The industry reports about 8 million residential heating/cooling units are sold each year, with 70 percent being replacement units. If equipment is old and has exceeded its useful life, manufacturers are being allowed to sell out their existing inventory of lesser efficiency systems. This window will be short-lived, however, as these units can no longer be manufactured and inventories will be exhausted quickly.

Although pricing is still somewhat uncertain, given that the new equipment uses approximately 30 percent more material and some custom installation may be required, expect to pay at least 30 percent more for replacement units than in previous years. The cost could be even higher if custom interior work is required.

As far as whether to replace part or all of a system, that decision is not very difficult. If the unit is at least 10 - 12 years old, the only legitimate choice is to replace the entire system – both indoor and outdoor units even if only one part is found defective. There are times when new units can be matched to old equipment, but these are rare. In any case, if you do, the hybrid will not operate at the efficiencies advertised, and may actually decrease. If the defective component is less than five years old, however, there will probably be enough inventory around to replace the defective component.

Finally, when trying to decide whether to replace your old system with a new one, consider the following. Most manufacturers have already upgraded all their new equipment to be more environmentally friendly. Thus, your system may use a refrigerant that is no longer available. You may also want to consider variable-speed units, air cleaners, and humidifiers, in addition to higher efficiency equipment. Although in most cases, the tenant pays the utility bills, with vacancy rates still higher than most owners/managers would like and utility bills highly visible, this combination might just offer you a competitive advantage in renting your units to cost-conscious tenants. Also, don’t forget to contact your local electrical utility for available rebates - these can help reduce, or sometimes pay for the premium cost of higher efficiency equipment.

Volume 17, Number 1

March 2006

Copyright © 2006

The Engineering Advisor is intended to enhance your knowledge of technical issues relating to buildings.  For additional information on any subject, please feel free to call us.  Our commitment is to provide you with timely, accurate information.