Replacement and conversion of CFC chillers slower than expected

Engineered Systems, July, 2005

Manufacturers of chillers used for comfort cooling in buildings replaced or converted 2,753 units that use chlorofluorocarbon (CFC) refrigerants during 2004, leaving an estimated 33,300 chillers still using CFCs. The use of CFC refrigerants in new equipment was banned under the Montreal Protocol at the end of 1995 due to concerns about CFCs eroding the Earth's ozone layer.

ARI's annual survey of chiller manufacturers showed that building owners in the United States, as of January 1, 2005, had replaced or converted 46,703 units, or 580, of the 80,000 CFC chillers in use at the end of 1995.

New non-CFC chillers reduce maintenance costs, use less electricity, and can be at least 40% more energy efficient than the CFC chillers installed only 20 years ago, according to the EPA. At the current pace, it will take more than 10 years to replace all the CFC chillers in operation today.

According to ARI, during 2004 there were 176 conversions and 2,753 chillers replaced with non-CFC equipment. The pace of the phase-out has been slower than expected due in part to federal tax laws, which require depreciation of the chillers over 39 years.

Congressman Peter Hoekstra (R-Mich.), an active member of the Congressional Manufacturing Caucus, has introduced legislation, entitled H.R. 1241, the "Cool and Efficient Buildings Act," which will set the depreciation period from 39 years to 20 years for "any property which is part of a heating, ventilation, air conditioning, or refrigeration system and which is installed on or in a building which is non residential real property."

According to Hoekstra, "The current 39-year depreciation period on HVACR systems is not reflective of their average life span, and it is not cost effective. The Cool and Efficient Buildings Act will provide an incentive for businesses to invest in new equipment, which will save businesses money in the long run and provide another stimulus to the U.S. economy."

The legislation notes that the tax code change would decrease the nation's energy consumption by taking advantage "of the remarkable increase in energy efficiency due to technological advances" achieved by the air conditioning industry. A wide range of non-residential buildings would qualify for the new depreciation rate including offices, malls, airports, and factories where HVACR equipment, from large tonnage liquid chillers to unitary air conditioners and heat pumps, plays a key role in increased productivity and makes possible use of heat sensitive computers and telecommunications gear.

Building owners have replaced 37,643 and converted 9,060 CFC chillers, leaving an estimated 33,297 still in service, most of which use CFC-11 or CFC-12 refrigerants. ARI manufacturers estimated there will be 155 conversions and 2,674 replacements during 2005, bringing the total converted and replaced to 62% of the total by January 1, 2006.

Non-CFC chillers use alternative refrigerants accepted for use by the EPA. They include units with hydrofluorocarbons, HFC-134a, HFC-410A and HFC-407C and hydrochlorofluorocarbons, HCFC-123 and HCFC-22. To avoid emissions to the atmosphere and encourage recycling of refrigerants, EPA rules prohibit the venting of CFCs, HCFCs and HFCs, which requires the recovery of these refrigerants and promotes the reclamation of these refrigerants for re-use and sale when they meet purity limits set in ARI Standard 700.