Beyond today’s tensions, it is a good time to take a longer view of what will affect our industry. Key elements of US federal legislation and national commitments for the climate during the COP26 conference are about to unfold in the next few weeks. Those will not translate immediately into headline-grabbing impacts for the US HVAC sector, but the transformations in the decade to come could run deep, whether they end up being:
- Federally legislated, with follow-ups to the 2020 Hope-for-Homes program (rebates for EE improvements & contractor training) or with a version of the CEAA (tax credits, in particular for energy-efficient buildings),
- Elaborated at state / county /municipal level, where building codes evolve towards stricter energy efficiency standards (e.g., Title 24’s 2022 BEES as adopted recently by California’s CEC, pushing for heat pumps and electric-ready homes) and where benchmarking and BEPS are now seen in various jurisdictions,
- Standardized with stricter Minimum Efficiency Performance Standards (e.g., DOE’s planned 2023 MEPS update for central AC and heat pumps),
- Driven by the industry’s direct engagement, with the phase-down of HFCs, the 2020 passage of the AIM Act and its recent rule finalization by EPA, or with the heralding of ESG goals,
- The result of market mega-trends where digitalization, IAQ, efficiency and decarbonization combine into a new wave of innovation.
We have seen some of the changes already affect energy producers and utilities, given their long investment cycles, already looking past 2030. It will be interesting in particular to look at the gas and electric utilities, whether IOUs or PUC-regulated, their IRP long-term planning, rate structures, energy-efficiency program, and their relation to end-users, whether residential, commercial, or industrial. The interplay with the HVAC industry to become also a Distributed Energy Resource and, increasingly, with Big Tech and Controls pure-plays (think Google’s Nest, IoT devices) is already clear.