Contractors are gearing up for a change to 13 SEER. But are they ready to educate their customers on what the new efficiency standard means?



Installing a 13 SEER air-conditioning unit in northern Michigan is like forcing a homeowner in Florida to buy a high-efficiency furnace.

That's what a customer recently told Ken Ashton, a salesman for MacGregor Plumbing and Heating in Harbor Springs, Mich.

According to Ashton, such consumer sentiment about the new 13 seasonal energy-efficiency rating is one of several challenges contractors will have to overcome when the federal standard goes into effect Jan. 23.

On that date, U.S. air-conditioning manufacturers will stop making residential HVAC units with less than a 13-SEER rating. However, contractors are allowed to sell and install existing stock until it is depleted.

"Most customers are not aware of the change," Ashton said. "The customers see it as just one more intrusion."

Proposals and problems

The new standard has been in the making for more than five years. In January 2001, the U.S. Department of Energy under then-President Bill Clinton proposed a standard that would make air-conditioning units 30 percent more efficient, raising the minimum rating from 10 to 13 SEER.

The department said it believed the increase in efficiency would alleviate some of the country's energy problems while also helping consumers save on their utility expenses. The department estimated that U.S. homeowners' energy costs would be reduced by more than $1 billion annually under the higher standard.

But not everyone was on board with the 13-SEER proposal. The Air-Conditioning and Refrigeration Institute, which represents the major U.S. HVAC equipment makers, suggested the government reduce the new minimum to 12 SEER.

According to ARI President William G. Sutton, 12 SEER would still have meant a 20 percent increase in air-conditioning efficiency for many homeowners. It would have provided significant environmental benefits while eliminating the high prices consumers would have to pay for 13-SEER equipment, Sutton said.

The Bush administration agreed with ARI's position and rescinded the 13-SEER requirement in 2002. But seven states, including California and New York, and advocacy groups such as the Natural Resources Defense Council and the Alliance to Save Energy, filed a lawsuit to make the Energy Department enforce the higher standard.

The 2nd U.S. Circuit Court of Appeals ruled in January 2004 that the government did not follow proper procedures in rescinding the 13-SEER standard. That restored 13 SEER as the minimum standard, with a January 2006 deadline.

ARI eventually dropped its legal battles to the 13-SEER standard, deciding that with the approaching deadline, the association could do more good helping manufacturers prepare for the change.

"ARI continues to work with manufacturers to ensure a smooth transition... (so) that distributors, contractors and consumers are aware of the changes and their real potential effects," said Sutton.

Kevin Garr of Ted's Air Conditioning, Refrigeration and Heating in Fort Smith, Ark., diagnoses a problem on a homeowner's system. Soon homeowners will have to buy equipment rated at 13 SEER or higher. Photo courtesy of Rheem.

What's going on?

Despite all the talk about the new standard, 13-SEER units are not new to the U.S. market. Some manufacturers make units that go up to 18 SEER. But suppliers now need to make sure that they have a full line of 13-SEER units and compatible components available.

Several manufacturers have launched contractor-training courses. Rheem's Air Conditioning Division created "The Training Network: Tools for Success," which includes programs dedicated to improving compressor reliability, offers tools to ensure comfort, and duct design information.

Emerson Climate Technologies has begun emphasizing 13 SEER through its Copeland Scroll training seminars on air conditioning and compressor operations.

Besides technical training, both manufacturers say they have been trying to get their customers to see the impact 13 SEER will have on the way they do business.

"The current ‘good-better-best' hierarchy will become a nonfactor with the coming of the 13-SEER mandate and subsequent phase out of 10- through 12-SEER products," said Ed Raniszenski, director of market development and communications for the Rheem Air Conditioning Division. "Therefore, successful contractors will have to sell value now as opposed to price, which is at the heart of the ‘good-better-best' selling model."

Raniszenski said that this means contractors need to start focusing on other selling points besides price, including energy- and utility-cost savings, comfort features, humidity control and efficient air distribution.

"The 13-SEER mandate affords expanded business opportunities to contractors who adjust early to the 13-SEER world and prepare their companies accordingly," he added. "The successful contractor will separate himself from others by presenting to customers a new purchasing perspective and an entirely new portfolio of home- and business-comfort options based on value."

An unidentified technician with Ruud contractor Middle Georgia Mechanical in Dublin, Ga., inspects a condensing unit during a recent service call. Manufacturers have been preparing for the new 13-SEER standard for several years. Photo courtesy of Rheem.

Contractors caught off guard?

Contractor preparedness is something that Emerson has been studying for some time. The company has been conducting surveys on the new standard to see how contractors are doing as January approaches.

In one Emerson survey released in May, only one-third of the 571 contractors polled said that they were taking steps to prepare for the transition. A June survey of another 571 contractors found that 77 percent of contractors would fully convert to the 13-SEER standard in January, while another 12 percent said they would still sell 10-SEER units.

Emerson officials say these numbers are better than previous surveys' results. According to John Snyder, director of Emerson Corp.'s Copeland air-conditioning division, contractor readiness is vital. Echoing the sentiments of Rheem officials, Emerson is also urging contractors to find new ways to sell equipment.

"They need to learn a different way other than SEER to sell," said Snyder. "Efficiency may not be the main selling point anymore."

For many contractors, selling a 12- or 13-SEER unit, as opposed to the minimum standard, was a way to make extra profit. But with 13 SEER now the minimum, heating and air-conditioning companies will have to find new ways to generate profits.

Snyder recommends that contractors sell "value-added products," such as programmable thermostats, humidity controls and indoor air quality accessories.

Instructor Steve Brown (center, left) oversees the disassembly of a semi-hermetic compressor during one of Emerson Climate Technologies' compressor classes. Manufacturers like Emerson are training contractors for January's change to 13-SEER equipment. Photo courtesy of Emerson.

Many homeowners unaware

Besides mapping where contractors are on the 13-SEER road, Emerson has been researching the knowledge and opinions of homeowners on the issue. A recent survey of 501 homeowners found that 90 percent do not know the efficiency rating of their current air-conditioning system. The same survey also found that 80 percent want more education on the subject.

With this in mind, Emerson has made educational tools available to contractors to provide more information to consumers. One of these is the "Get SEERious" campaign. Contractors can send homeowners to www.getseerious.com. The Web site explains in simple language what SEER is about and why a high-efficiency air-conditioning system is important.

Emerson tells contractors that while they may not know all of the key information, most consumers want an air-conditioning system that will provide more reliability, which Emerson says a 13-SEER unit can provide.

Two unidentified participants of Emerson Climate Technologies' compressor class disassemble a compressor. Photo courtesy of Emerson.

What's the big deal?

Some contractors are not fretting over the January deadline. For them, selling high-efficiency equipment is nothing new.

"I don't think for us it is going to be a big change," said Rick Coggins, sales manager for Ace & A Heating and Air-Conditioning in Decatur, Ga. "It will be harder for companies in new construction that are used to putting in only 10 SEER."

He points out that the industry went through a similar situation a decade ago, when the government made 10 SEER the minimum air-conditioning efficiency standard. That meant the phasing out of 6- and 8-SEER units.

"We went though this once before in 1994," said Coggins. "It's affected us a lot less this time. I thought it was the end of the world last time."

He also explained that his customers are not settling for the minimum 10-SEER standard equipment still available. Most are buying 12- and 13-SEER units because they want high-efficiency, he said.

But Coggins said there are still customers who don't understand all the issues when it comes to air-conditioning and energy savings. That's why it is important to sit down with homeowners to find out their exact needs and explain all the options, he said.

"My best advice would be to listen to your customers," he said. "If they are going to be in a house for more than five years, then they need 13-SEER equipment."

MacGregor Plumbing and Heating's Ashton agrees that the biggest challenge when it comes to customers is educating them on why a new air-conditioning unit is going to cost more.

He explained that at his company, the average difference between installing 10 SEER and 13-SEER units is around $400. This is especially daunting for homeowners who live in MacGregor's northern climate, where air conditioning use can be minimal.

"In northern Michigan, the payback is not there," he said.

But Ashton also acknowledges that while the payback may not be large, he tells customers that in time the energy savings will be. The majority opt for the more efficient system, he said.

That's also true at Frasier Plumbing, Heating and Air Conditioning in Rhinelander, Wis., another northern U.S. contractor. Like Ashton, company owner Phil Frasier said he felt there would be little incentive for area customers who live in a relatively cold climate to purchase a higher efficiency unit, even though he offers up to 14 SEER.

But about 75 percent of the company's recent customers have opted for a 12- or 13-SEER system, he said.

Frasier said he believes that for contractors who are used to "up selling" to higher profit equipment, the 13-SEER rule won't be a problem.

"We are going to look back at this in 10 years and wonder what the big deal was," he said.

(For reprints of this article, contact Jill DeVries at (248) 244-1726 or e-mail devriesj@bnpmedia.com.)