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Change is here—let’s navigate it together

The push to increase energy efficiency and reduce emissions continues to drive change in the HVAC industry. As a result, the government is instituting significant changes in energy efficiency criteria and ratings for both residential and commercial equipment.

Rather than viewing the regulatory changes as a problem to be solved, Rheem is embracing them as an opportunity to innovate new technologies to create an even better product line for contractors and homeowners.

To help you understand what’s changing, why, and how it’ll affect you, we’re pleased to bring you this HVAC KnowZone^® to act as a central hub, where you can easily access information as it becomes available.

2025: Technology Transition Rule on GWP Limits

In October 2023, the U.S. EPA finalized the Technology Transitions Restrictions on the Use of Certain Hydrofluorocarbons (HFCs) under Subsection (i) of the AIM Act, establishing GWP limits for the applications that use HFCs. The Technology Transitions Rule contains a 700 GWP limit for air conditioners and heat pumps by 2025, prohibiting the use of R-410A, which has a GWP of 2,088.

This rule has had quite the journey, going back to 2020 when the AIM legislation was enacted. Responding to recent concern by industry, EPA signed an interim final rule in December 2023, regarding the installation compliance date for residential heat pump and air conditioning systems. The amendment allows for installation of higher-GWP HFC equipment manufactured or imported before January 1, 2025, to be installed until January 1, 2026.

Designing for Sustainability with Low GWP

For 2025, the Environmental Protection Agency (EPA) has set a global warming potential (GWP) limit of 700 for refrigerant used in heating and cooling systems. This new requirement will result in a 78%³ lower GWP than previous-generation refrigerants—with only minimal changes to system installation. For us, this is another step toward our continued sustainability goal of reducing greenhouse gas emissions, while still delivering an exceptional level of energy efficient, dependable comfort.

¹Air Conditioning, Heating & Refrigeration Institute. ²Heating, Air Conditioning and Refrigeration Distributors International. ³When comparing the GWP of R-454B to R-410A refrigerant.

Compliance Based on Equipment Type

It is essential to get familiar with the regulation specifics. EPA delineates the equipment categories of Products, Systems and Components, and the rules are different for each.

Packaged equipment are considered “Products” and have a three-year sell-through of existing inventory. “Systems” are considered a grouping of components, such as a split ducted AC/HP or mini-split, and that compliance is based on system installation, but equipment made before 2025 can now be installed through 1/1/26. “Components” are the major elements such as an indoor coil, outdoor condensing unit or air handler, and can be manufactured for R-410A indefinitely as long as they are only used for the service of already-installed equipment and labeled as such.

California and Washington HFC Rules Overlap With EPA

There is no federal preemption of state authority in the American Innovation and Manufacturing (AIM) Act. Both California and Washington have finalized state HFC rules, and other states are also considering doing the same. It’s important to note any differences between local and federal rules for your state, as the more stringent requirement prevails.

¹Compliance is due by Jan. 1, 2026, if UL 60335-2-40 Edition 4 is adopted by the WA State Building Code Council by Dec. 31, 2023; otherwise 24 months following the adoption of the updated code. ²R-410A condensing units manufactured prior to 1/1/2025 can continue to be offered for service repair only.

NOTE: In CA, R-410A condensing units manufactured prior to 1/1/25 can continue to be sold for service after the compliance date.

Basics of A2Ls

The most common low-GWP alternatives to R-410A are classified by ASHRAE as mildly flammable, or A2L. Due to their mildly flammable characteristics, A2L refrigerants require updates to standards and building codes to allow for their safe installation.

Building Code & Legislation Updates
In order to install appliances containing flammables in buildings, codes must be modified to allow it. Updated standards and model codes need to be adopted by the states on an individual basis, and there’s been a tremendous amount of progress on this as we prepare for 2025. To view where state and local building codes have been updated, or where legislation has passed to allow equipment using A2L, visit AHRI’s A2L Refrigerant Building Code Map.

On The Horizon

Furnace Efficiency Rule

On December 18, 2023, the DOE published the final rule for energy conservation standards of consumer furnaces, making official the new minimum annual fuel utilization efficiency (AFUE) of 95% in the Federal Register. Compliance with the amended standards will be required on December 18, 2028.

NOTE: The gas industry has launched a lawsuit against DOE, challenging the final rule. The result of the legal challenge will likely take some time to resolve, but stakeholders should continue to prepare for the 2028 compliance date as stated in the rule.

Commercial HVAC Efficiency Changes

DOE is preparing regulations that will bring new metrics and a 28–35% expected increase in minimum efficiency for large commercial air conditioners and heat pumps. The traditional efficiency rating metrics of IEER and COP will be replaced by IVEC and IVHE, reflecting changes in the DOE test procedure that incorporate additional sources of energy consumption. The anticipated rules will be required for all new large commercial equipment by January 1, 2029.

Recap: 2023 Minimum Efficiency Standards

As of 2023, newly manufactured residential and commercial equipment sold in the U.S. must meet minimum efficiency standards set by the DOE. For single-phase residential and light commercial central air conditioning systems, the M1 efficiency requirements vary by region.

Appendix M1: A System of Measurement The new test method is commonly referred to as Appendix M1 and replaced Appendix M in the Code of Federal Regulations. For decades, we used the classic metrics of SEER, EER and HSPF. Now, you’ll hear these metrics referred to as SEER2, EER2 and HSPF2.

What About Commercial? Commercial single-phase air conditioners and heat pumps <65k BTU/HR (typically those in the 3-, 4- and 5-ton range) follow the residential standards. Commercial systems ≥65k BTU/HR also have new minimum efficiency levels with compliance based on date of manufacture. Note that while the metrics of IEER and COP did not change, IEER and COP minimum efficiency levels increased from the DOE 2018 standard. EER requirements remain unchanged. See the table “DOE 2023 6 to 30 tons” for more details. The M1 requirements will apply to small 3-phase systems 5 tons and below starting January 1, 2025.

Navigating Regional Standards The 2023 requirements apply nationally—unless superseded by a regional standard. The regional standards apply in the Southeast and the Southwest, and there is a key difference between the national and regional standards when it comes to enforcement. While both had a compliance deadline of January 1, 2023, the national deadline is based on the equipment date of manufacture, while compliance to the regional standards is based on the date of installation. Heat pumps do not have regional efficiency criteria, so the national criteria apply in all states.

Compliance for Existing Inventory AFTER JANUARY 1, 2023: Outdoor AC units manufactured prior to January 1, 2023, rated using Appendix M, can be installed in the Southeast and Southwest Regions, if the lowest FTC label rating (coil-only) is at or above the new minimum efficiency requirements on a conversion basis. Ratings based on Appendix M will need to be cross-referenced with the corresponding Appendix M1 values.

Understanding Compliance by Region: North, Southeast & Southwest

North

Southeast

Southwest

For the states in the North region, compliance is based on date of manufacture. Therefore, if a product, as part of an AHRI-rated matched system, was compliant on the day it was produced, it can continue to be sold and installed anywhere in the North region.

North Region Existing Inventory: Units manufactured prior to 1/1/2023 can continue to be installed, provided the equipment was compliant at the time it was produced.

For split air conditioner systems in the Southeast states, a regional standard (as highlighted in red on the table) supersedes the national requirements. Therefore, compliance for that product type is based on date of installation. Compliance for all other product types is based on date of manufacture.

Southeast Region Existing Inventory The least efficient coil-only rating listed on the EnergyGuide Label, of any AC split system installed on or after 1/1/2023, must meet 2023 Efficiency Requirements on a cross-reference basis for SEER.

Heat pumps and packaged AC systems manufactured prior to 1/1/2023 can continue to be installed, provided the equipment was compliant at the time it was produced.

For split and packaged AC and packaged gas/electric (GE) in the Southwest states, a regional standard (as highlighted in blue on the table) supersedes the national requirements. Therefore, compliance for those product types is based on date of installation. Compliance for the other product types is based on date of manufacture.

Southwest Region Existing Inventory: The least efficient coil-only rating listed on the EnergyGuide Label, of any split and packaged AC system or packaged GE system installed on or after 1/1/2023, must meet 2023 Efficiency Requirements on a cross-reference basis for SEER and EER.

Heat pumps manufactured prior to 1/1/2023 can continue to be installed, provided the equipment was compliant at the time it was produced.

HOW THE U.S. GOVERNMENT WILL ENSURE COMPLIANCE FAQs Download a PDF of this guide

2025: What You Need to Know

In 2020, a bipartisan Senate bill, known as the American Innovation and Manufacturing (AIM) act, was enacted. It sought to address global warming by ushering in the next generation of refrigerants.

Learn More Watch Video Download Guide

2023: What You Need to Know

For equipment manufactured after January 1, 2023, the minimum standards have changed, and a new test procedure is required. These requirements vary by region but generally increased by about 7–10%.

Learn More Watch Video Download Guide

refrigerant used

R-410A

(Meets 2023 requirements)

Low GWP

(Meets 2025 requirements)

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Tax credits

The Inflation Reduction Act (IRA) 2023 includes enhanced tax incentives and a state-run consumer rebate program to encourage upgrading to heat pumps and high-efficiency HVAC systems.

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Search for and find local rebates for your new Rheem heating and cooling solution.

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Inflation Reduction Act Overview

What Homeowners Need to Know About the IRA

Introducing the Side-Discharge Universal Heat Pump

Regulatory Updates

NATE-certification & the Importance of Properly Trained Contractors

When it comes to training and certifications, everyone connected to the HVAC industry benefits —contractors, technicians and even homeowners. North American Technician Excellence (NATE) is the nation’s largest nonprofit certification organization for heating, ventilation, air conditioning and refrigeration (HVACR) technicians. Headquartered in Arlington, VA, NATE was developed by and has been supported by the industry for over 20 years.

What Are the Benefits? NATE-certified contractors and technicians receive a high ROI. They’re considered valuable to employers and preferred among customers. So NATE-certified contractors and technicians are sought out. As such, their salaries are higher than their non-certified counterparts. Homeowners using NATE-certified contractors and technicians receive:

• Higher satisfaction – Thanks to fast service and fewer callbacks and warranty returns
• Increased confidence
• Lower utility bills – Because their systems are operating more efficiently
• Peace of mind – From knowing that their systems are in good hands

What Is the NATE Program & Who Is It For? Developed by a committee of industry experts, the NATE program is a series of exams that result in either certificates or full certifications and is designed for contractors and technicians of all experience levels. The entry-level tests, Ready-to-Work and HVAC Support are intended for those with less than 12 months of experience. Those who pass the tests earn a certificate, that identifies them as someone knowledgeable and trained in the field. More rigorous exams are required to receive a full NATE certification. Who is Eligible for Full NATE Certification & What Does It Entail? NATE certification is recommended for contractors and technicians with two or more years of experience. There are two certification testing pathways available: the Certified HVAC Professional (CHP-5) pathway, a series of five exams, or the Core and Specialty exam pathway, a series of two exams. For more information on either of these pathways, visit the NATE website. Are There Training Courses Available to Help with Exam Preparation? NATE has partnered with lnterPlay Learning to launch NATE Training Academy, which allows contractors and technicians to train for NATE certification exams online when convenient for them. The online training includes 3D and VR simulations that mimic in-field experience. Contractors and technicians can start prepping for NATE's Certified HVAC Professional exam today. Additionally, this fall, training will be available for NATE's Low-GWP refrigeration certification.

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HVAC KnowZone®

Change is here—let’s navigate it together

2025: Technology Transition Rule on GWP Limits

Basics of A2Ls

On The Horizon

Recap: 2023 Minimum Efficiency Standards

ENERGYGUIDE LABELING101 & 2023 CHANGES

NATE-certification & the Importance of Properly Trained Contractors

Endeavor^® Heating & Cooling Line

Maximus^™ Water Heater

ProTerra^® Heat Pump Water Heaters

Triton^® Gas Water Heaters

Renaissance^™ Heating & Cooling

Endeavor^™ Heating & Cooling Line

Maximus^™ Water Heater

ProTerra^® Heat Pump Water Heaters

Triton^® Gas Water Heaters

Renaissance^™ Heating & Cooling

HVAC KnowZone^®

ENERGYGUIDE LABELING
101 & 2023 CHANGES