New Regulations Heat Up Demand for Advanced HVAC Technologies

Regulatory changes are reshaping the HVAC industry, driving it towards more sustainable and environmentally friendly practices. More stringent regulations governing refrigerants will increase demand for newer HVAC technology, products, and systems, requiring new higher-performing equipment. Effective January 2025, new EPA rules will be implemented targeting environmentally harmful refrigerants, including R-410A, a commonly used refrigerant in air conditioning and heat pump systems, and phasing to low-GWP A2L refrigerants like R-454B and R-32.

The changes are aimed at minimizing greenhouse gas emissions under the American Innovation and Manufacturing (AIM) Act while also promoting energy efficiency.

The regulations mark a significant shift towards sustainability, but will notably impact household expenses. While the existing R-410A systems will continue to function, the transition will lead to increased costs for new HVAC equipment, potentially rising by up to 25% due to necessary design modifications and safety features. Additionally, repair costs will also increase as the availability of R-410A systems diminishes, potentially leading to higher prices for both the refrigerant itself and associated services, necessitating proactive budgeting and informed decision-making to navigate these changes.

BGL’s Engineered Equipment investment banking team has extensive experience working with companies that produce highly engineered equipment and machinery, sub-systems, and components used in a variety of end markets; this includes flow control, emission control, HVACR systems and components, clean technology, energy transition and decarbonization technology, process and automation equipment, material handling and conveyance, electronic and electrical equipment, precision-engineered tools and machine componentry, and finished production equipment