NEW FEDERAL REGULATIONS ON HVAC WILL BE A BIG COST TO OUR CLIENTS

By
Real Estate Agent with Keller Williams Capital Properties DC AB15253

New Government Regulations Increase Costs for HVAC Repairs and Replacements

On January 1, 2015, my former employer, the US Department of Energy (DOE), released new regulations regarding HVAC efficiency standards. These new laws increase the minimum efficiency ratings required on all new air conditioners and heat pumps. The DOE regulations also include a “matching” requirement for HVAC equipment that states when a system can no longer be repaired with “like-kind parts,” all existing and new components must be compatible with the same efficiency rating as a newly manufactured system.

These new government regulations may significantly increase the cost of heating, ventilating, and air conditioning (HVAC) repairs and replacements. These new rules will also complicate the process of deciding whether to repair or replace a system. You can protect yourself by knowing the new rules and regulations.

What Does This Mean?

As of January 1, 2015, the DOE increased the minimum SEER rating, heavily affecting contractors, builders, manufacturers, and ultimately, homeowners. The new regulations are intended to enhance energy efficiency and reduce energy costs.

SEER is the Seasonal Energy Efficiency Ratio. The Air Conditioning, Heating and Refrigeration Institute (AHRI) defines this metric by dividing the unit’s cooling output during a normal cooling season with the total electric energy input. Simply put, a higher SEER rating means that an air conditioner is more efficient. In 2006, the federal government mandated that 13 SEER equipment be the new minimum SEER rating for all new central air conditioners. Now, all new equipment in certain regions of the U.S. will be required to have a SEER rating of at least 14. In some parts of the country, heat pumps will be required to have a SEER rating of at least 14 and a HSPF rating of 8.2 (or 8, for packaged heat pumps.)

However, before any savings can be achieved, homeowners will have to bear the higher costs of repairing and replacing their HVAC equipment.

Simply put, this means that air conditioner and heat pump manufacturers are only building “new” higher efficiency models, and existing systems that require repair must be brought up to the latest standards when current stocks of replacement parts are depleted.

Experts currently estimate the cost to repair or replace an HVAC system could rise by more than 60%.

The U.S. Has Been Divided into Three Regions

To implement this new regulation, the DOE has divided the country into three regions, and each region will have unique requirements for air-conditioner and heat pump efficiency levels. This is the first time that efficiency standards for HVAC components will be determined on a regional basis.

The three regions are the North, Southeast, and Southwest. The regions were determined by analyzing
each region’s heating degree days (HDD) and weighted for population. In the North, air conditioners must be at least 13 SEER and furnaces must now have an efficiency of 80% or more (prior to the new regulations, the national standard was 78% efficiency). While it is acceptable in the North to install 13 SEER units, no 13 SEER units could be manufactured after January 1, 2015. As the SEER 13 inventory runs out, 14 SEER will become the de facto standard nationwide.

Maryland and Washington DC fall into the Southeast category. In the Southeast and Southwest, 14 SEER is the new requirement for air conditioners, and furnaces must be at least 80% efficient. The DOE has granted a grace period where 13 SEER equipment may be installed anywhere in the country up until June 30, 2016. However, the inventory of 13 SEER equipment may sell out long before that date. This will cause a shortage of equipment available for repair for most current systems that are rated SEER 13 or lower. These equipment shortages will result in more system replacements that in turn will cost more than repairing existing systems. The reasoning behind the regional differences is that residents of Northern states will use less energy to cool their homes and more energy to heat their homes than residents of states in the Southeast and Southwest. 

Buyers, Protect Your Wallets 

If a buyer doesn’t know that the older furnace or air conditioner in their new home might cause problems in the future, from the matching requirement or because it has a lower SEER rating, they could encounter an expensive surprise when a repair is needed.

Alternatively, a home buyer could be relocating from one region to another. Even if they are informed or well-educated about the home’s mechanical system, they might not be aware of the differences in regional standards that new equipment and repairs must meet.

Being current on regulations that have financial implications is not easy, but in this case, can save you significant amounts of money. 

If you are planning on buying a home in the DC Metro area, such as Chevy Chase, MD, you should pay close attention to the inspector's review of the HVAC system. If the HVAC system is approaching the end of its useful life you may consider asking for a credit to replace the system, or at a minimum a home warranty which covers the cost of the replacement.  Your realtor should be able to give you useful advice on a home warranty. 

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Roy Kelley 07/31/2015 07:00 PM
  2. Elyse Berman, PA 08/01/2015 11:21 PM
Topic:
Real Estate General Information
Location:
Maryland Montgomery County Chevy Chase
Tags:
home warranty
chevy chase md
montgomery county homebuyer
hvac regulations
lise howe group advice for buyers
advice on homebuying

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Rainmaker
2,725,900
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Adaptability is a key after all and you never know the exact things that can happen in life.

Jul 31, 2015 01:55 PM #15
Rainmaker
2,725,900
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Yeah I agree with the previous statement about renewable energy in a long-term sense. It'll be a rough patch at first.

Jul 31, 2015 01:57 PM #16
Rainmaker
2,725,900
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I see a lot of positivity despite the new changes and I think that's a great thing overall!

Jul 31, 2015 01:58 PM #17
Rainmaker
2,346,102
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

Government regulations have gotten way out of hand.....they love spending our money for us.

Jul 31, 2015 07:08 PM #18
Rainer
496,448
Sham Reddy
H E R Realty, Dayton, OH - Dayton, OH
CRS

Thanks LIsa for a timely and very useful article about the new airconditioner rules across US.  Everything is getting expesive in the way the Government is ruling just about everything in our lives in the name of environmental protection.  Thumbs down from my side!!!

Jul 31, 2015 08:44 PM #19
Rainmaker
1,644,464
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

Roger D. Mucci - Welcome back - do you feel shaken or stirred? How is the rehab going? 

Jul 31, 2015 08:54 PM #20
Rainmaker
2,926,746
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

I had not heard about it. It sure could be costly, it may save in the end, but the initial cost will hurt many.

Jul 31, 2015 09:24 PM #21
Rainmaker
1,644,464
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

Scott Godzyk - thanks for stopping by! Makes a home warranty that covers HVAC even more important

Jul 31, 2015 09:26 PM #22
Rainmaker
1,644,464
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

Sham Reddy  thanks for stopping by! Makes a home warranty that covers HVAC even more important

Jul 31, 2015 09:27 PM #23
Rainmaker
1,644,464
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

Laura Cerrano - thanks for stopping by - The energy efficiency gudelines are useful -and it  Makes a home warranty that covers HVAC even more important

Jul 31, 2015 09:28 PM #24
Rainmaker
1,644,464
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

James Dray  thanks for stopping by! Makes a home warranty that covers HVAC even more important

Jul 31, 2015 09:29 PM #25
Rainmaker
1,644,464
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

Conrad Allen  thanks for stopping by! Makes a home warranty that covers HVAC even more important

Jul 31, 2015 09:29 PM #26
Rainmaker
1,644,464
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

Joe Petrowsky  thanks for stopping by! Makes a home warranty that covers HVAC even more important to protect our clients

Jul 31, 2015 09:30 PM #27
Rainmaker
2,346,102
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

A little shaken and a little stirred.....a bit behind on rehab because of the gout, but doing what I can.

Jul 31, 2015 10:28 PM #28
Rainmaker
174,644
Kim Johnson
Realty Associates of Florida I Inc. - Coral Springs, FL
Selling South Florida

Hi Lise! Saw this on Roy's blog. Great info! Can't believe I missed it!!!

Aug 01, 2015 07:35 AM #29
Rainmaker
1,644,464
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

Roger D. Mucci  I believe in you!  Gout????? Do I you know that john Milton suffered from gout so you are in great company. When his gout bothered him he would go out into the garden and sing to himself. Since you are a fellow sufferer you might have some idea of what he was singing. Lol. 

Aug 01, 2015 09:28 AM #30
Rainmaker
2,346,102
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

I have a funny feeling the words to the song could NEVER  be published.

Aug 01, 2015 09:42 AM #31
Rainmaker
864,631
Elyse Berman, PA
Best Connections Realty, Inc. - Boca Raton, FL
Boca Raton FL (561) 716-7824 CRS, ABR, GRI,ePR

Lise Howe This is great information for buyers.  Thanks for sharing it.  We use a lot of air conditioning in south Florida and many homeowners have warranties that cover it (or should!)

Aug 01, 2015 11:14 PM #32
Rainmaker
214,389
The Brewer Team - Benchmark Realty
Benchmark Realty - Franklin, TN

It's really a shame that we have a federal government that doesn't really care about the cost of anything. From what I have read, the energy savings in moving from a seer13 to a seer14 are so small that you will need more that 10 years of service to recover the addiional cost of changing. Now that we know that we have an unlimited supply of natural gas in the country to create electricity and to heat our homes, why are we forced to pay more and more money to squeak out a small improvement in energy savings. It just doesn't make sense.

Aug 01, 2015 11:29 PM #33
Rainmaker
991,310
June Piper-Brandon
Long & Foster Hampden - Baltimore, MD
Piecing Dreams One Home at a Time

Welcome to Maryland what's in your wallet?  I agree with having more energy efficient equipment but some people can't afford to replacement. 

Aug 03, 2015 04:53 AM #34
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