Author: Brett Knox
October 25, 2024 - 4 MIN. READ
Big changes are coming to the HVAC industry in 2025. HVAC contractors: are you ready for the impact on your business and profit margins?
A new HVAC refrigerant mandate will take effect on January 1, 2025. Here's a closer look at what this HVAC news means for your business.
In 2020, the American Innovation and Manufacturing Act introduced new standards for refrigerants. The goal is to adopt refrigerants with a lower environmental impact.
The Environmental Protection Agency (EPA) established target dates for transitioning to new refrigerants, and from January 1, 2025, R410-A will be phased out and replaced with R-32 and R-454B.
R-32 is a single-component refrigerant that's been in use in the U.S. since 2016. Because of its single-component formula, it's easy to reclaim and reuse. It's also a highly effective product that can reduce CO emissions by around 13% compared to R410-A.
R-454B is a blend that contains approximately 70% of R-32 and also reduces emissions by about 13%. Both refrigerants have the added benefit of lower flammability compared to R410-A, as reflected by their A2L security rating.
As manufacturers phase out R410-A production, you can expect prices to rise for this refrigerant. It will translate into higher repair costs for customers with older HVAC systems that still use this refrigerant.
Because R-32 and R-454B aren't suitable drop-in replacements for R410-A, adopting these new refrigerants will require customers to upgrade their HVAC equipment. You can expect higher prices on these units as manufacturers recover the costs of developing new designs and releasing new products to meet changing EPA standards. Plus, ongoing supply chain challenges will continue affecting prices.
R-32 and R-454B also need a larger surface area on HVAC coils compared to R410-A designs. With most manufacturers using copper and aluminum for their coils, the high prices of these materials could contribute to rising HVAC unit costs.
Beyond rising prices for older refrigerants and the ongoing effects of inflation across the industry, the cost of replacement parts will also likely increase as manufacturers phase out their R410-A designs. Plus, lead times will probably go up as these parts become more challenging to find.
As a contractor, preparing for this major shift means educating your customers about this HVAC news and the advantages of the new refrigerants. Highlight the environmental benefits of cutting emissions and demonstrate how upgrading their HVAC units can save them money in the long run.
Ensure your team is ready for the transition by investing in training and upskilling. Proper knowledge of the new refrigerants will enable them to confidently discuss options and address customer concerns about HVAC upgrades.
Manufacturers will also introduce updated product lineups and best practices. Stay informed about these changes and make sure your workforce is trained to install and maintain the new systems efficiently.
Another major HVAC trend transforming the industry is the rise of heat pumps. While incentives already exist to support heat pump adoptions, a new program will provide low and middle-income households with up to $8,000 per heat pump under the High-Efficiency Electric Home Rebate Act. Funding will likely become available to households by late 2024 or early 2025.
Upcoming changes to the HVAC industry will likely result in higher costs for refrigerants, replacement parts, and new HVAC systems. Rising costs for parts and materials could shrink your profit margins.
If you offer HVAC installation or repair services, you can win more bids and increase profits by paying less for HVAC equipment, parts, and materials as well as business essentials.
Unlock unparalleled savings and streamline your procurement process with Raiven. We allow contractors to consolidate their purchasing power to negotiate exclusive discounts, favorable service terms, and priority access to supply chains. Say goodbye to the hassle of negotiating with multiple suppliers and enjoy significant cost savings on HVAC parts and materials.
Gain access to pre-negotiated discounts of 7%-30% from industry-leading manufacturers and distributors, including Alpscontrols, Carrier, Ferguson, Grainger, Graybar, HD Supply, Home Depot, Lowe’s, Office Depot, Sunbelt Rentals, Schneider Electric, and more!
Raiven is committed to supporting electrical contractors by providing unbeatable prices on equipment, parts, and maintenance supplies. Experience the convenience of our streamlined purchasing platform for quick and efficient procurement. Other key benefits:
Raiven is your one stop shop to save time and money. Visit Raiven to learn more about how we can help you win more jobs and make more profits.
Summary: Major changes are coming to the HVAC industry in 2025 with new refrigerant standards. Learn more about these HVAC trends and how they’ll impact your business.