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R-22 Phase Out: What Contractors Really Need to Know

Originally published: 05.01.16 by Pete Grasso


R-22 Phase Out: What Contractors Really Need to Know

Whether you like it or not, R-22 refrigerant is going away. That's a fact.

The EPA's phase out of R-22 is nothing new & the industry has known about it for years. Equipment manufacturers, refrigerant suppliers and distributors have all been preparing for the January 1, 2020 cutoff when no new or imported R-22 refrigerant will be allowed in the U.S.

Largely absent from the list of industry stakeholders preparing for this shift are the contractors. Maybe you believe there's nothing you can do about it. Perhaps you don't think it affects you. Whatever the reason, you have a right to know what the R-22 phase out truly means to your business and why you should care.

We gathered a panel of experts from all areas of the industry for a discussion with one objective: What does the HVACR contractor really need to know about R-22?

Here's what they had to say.

R-22 Availability

Will there be enough R-22 to satisfy the US industries demands in 2016?

Wight: I don't think we're going to have any issues this year, but there are some factors that could change those dynamics. We're seeing allocations from the suppliers & every month we get an allocation of how much


R-22 we're allowed to buy, and we typically buy as much as we can. We're in good shape, and so are a lot of wholesalers. Some wholesalers, however, are limiting the amount of R-22 they're selling to contractors & the first time we've ever heard of that. The supply of R-22 is going to be in different places, depending on geography, but it'll be out there and there won't be a shortage. Some wholesalers may run out, but contractors shouldn't have a problem buying it somewhere.

Our panel includes:

Larry Brown
Sales Manager
Johnstone Supply
John Galyen
President, North America
Danfoss
Jay Kestenbaum
Senior Vice President
Airgas Refrigerants
Gordon McKinney
Vice President
ICOR International
Karen Meyers
Vice President of Government Affairs
Rheem
Russell Tavolacci
Senior Vice President
Samsung HVAC
Doug Wight
Vice President
Refrigeration Sales Corp.

Brown: There might be shortages in some areas this year, but for the most part a contractor isn't going to have a problem walking into a distributor and buying a can of R-22. Next year, however, all bets are off. There will more outages next year in more places around the country.

Kestenbaum: There is enough product now, and there probably is enough product to meet demands next year as well. The question is, how much are contractors willing to pay to get it? That depends on how fast the industry will move to retrofitting and newer refrigerants and whether or not the perceived value of R-22 drops.

Meyers: We believe the amount of newly produced, as well as reclaimed R-22 in circulation will support the needs for U.S. demand through the end of 2016.

McKinney: More than likely, no! The EPA has limited the amount of R-22 to 18 million lbs. this year, and reclaimed R-22 is only expected to add another 8 to 9 million lbs.

Reclaimed R-22

Can the reclaim companies in the U.S. provide more R-22 to minimize any shortfall?

McKinney: It's possible, but not probable. The amount of refrigerant being recovered annually continues to decline despite the best efforts of reclamation companies.

Wight: When the manufacturers aren't allowed to make any more R-22, the better position the reclaimers are going to be in, depending on how much they've been able to get back. A lot of our contractor customers don't want any money for the R-22 they recover. They don't want the hassle … instead, they pay us to take it back and if it's good gas, great, someone's going to do something with it, and if it's bad gas, we'll take care of it and they're not going to get charged anything.

Meyers: By minimizing waste in reclaiming R-22, as well as migrating to higher efficiency units, we are hopeful there will be minimal, if any, shortfall before the EPA allocation rule on production of new R-22 refrigerant goes into effect in 2020.

Can R-22 be reclaimed on site?

Galyen: Reclamation of refrigerants involves reprocessing recovered refrigerants to restore them to the purity levels specified in AHRI Standard 700. This is verified using chemical analysis. Service contractors don't have these capabilities.

Wight: Yes, if it's being returned to the same system. To be reclaimed for resale, it should be done at a reclaiming facility.

McKinney: There are reclaim companies that can recover, and reclaim, large system charges of R-22 on site. Cost for the service will vary depending on the accessibility of the system and the condition of the refrigerant.

Meyers: On-site reclaiming is not an option due to the scarcity of EPA-certified reclaimers and the EPA requirement for third party laboratory testing to establish the required purity levels for reclaimed refrigerant. Recovered refrigerant is extracted from an air conditioning system. Reused refrigerant is recovered from an air conditioning system not processed and returned to the original system or another system that is owned by the same entity. Recycled refrigerant is processed, but not to the purity specified in AHRI Standard 700 and returned to the original system or another system that is owned by the same entity. Reclaimed refrigerant is certified by a third party laboratory to meet the purity levels specified by AHRI Standard 700. The Clean Air Act restricts the resale of used refrigerant to a new owner unless it has been reclaimed by an EPA-certified refrigerant reclaimer.

Why has the amount of R-22 being reclaimed dropped so rapidly?

Galyen: While there are a number of contributing factors, the rate of reclaim is directly linked to the market price of R-22. As the cost of virgin R-22 rises, the value of recovered R-22 tends to increase as well. End users, fearing a potential shortfall of product, may decide to re-use their recovered refrigerant or stockpile it instead of returning it for reclaim.

Kestenbaum: The amount of available new R-22 was underestimated, and so there wasn't as much of a demand for reclaimed R-22.

McKinney: Refrigerant users are recovering and reusing more non-reclaimed R-22 than ever before. This practice can lead to serious system performance issues and safety hazards and is undermining reclaim efforts.

Meyers: Initially introduced in 2000, we know there are already an increased number of higher efficiency units using R-410A being installed in U.S. homes. As products engineered and manufactured to utilize higher-efficiency, ozone safe R-410A supplant these R-22 units, the overall demand for R-22 is decreasing. We believe as less R-22 is being used by customers, contractors are reclaiming less.

New, Alternative Refrigerants

Will ozone safe alternatives play a greater role in the transition away from R-22?

McKinney: Yes! HFC blends have been in widespread use for nearly two decades now and they have proven to be safe, reliable, and far less expensive than the products they replace.

Galyen: Absolutely. Rising costs and supply uncertainties are driving contractors and equipment owners to consider refrigerant alternatives. Today, HFCs are the obvious choice for many applications, and will see increased usage as R-22 replacements for new installations and retrofits for system service.

Meyers: For more than a decade, the industry has migrated to higher-efficiency, newer units designed, engineered, and manufactured to use R-410A, which is an ozone safe refrigerant. There are no limitations on use of R-410A, and newer units provide much higher efficiency ratings overall.

Do R-22 replacements have any limitations?

Galyen: All refrigerants have limitations. More specifically though, there is no one replacement or retrofit refrigerant that has the versatility of R-22. This is a challenge that our industry continues to face, as many different products try to fill the void R-22 is leaving behind. The limitations are typically in the form of tradeoffs in capacity, efficiency, higher pressure, or flammability, and any one of the refrigerants could be higher or lower in each of the categories.

McKinney: Yes! The 400 series of R-22 replacement refrigerants are most suited for use in systems that utilize non-electronic direct metering i.e. TXV, cape tube, fixed orifice. They should not be used in flooded applications.

Tavolacci: Some do have limitations, especially the newer ones because of a flammability issue. Where there is an advantage, there's always a drawback. For example, R-410A works better in a heat pump than R-22 does, but it's a stepping-stone to R-32, which has a flammability issue.

Kestenbaum: There are no drop-in replacements. Each alternative has advantages and disadvantages and it comes down to what the application is, as well as what you're willing to put up with from a labor standpoint.

Meyers: Using such "drop-in" replacement refrigerants in equipment designed to operate with R-22 can lead to issues such as improper lubrication and capacity losses, which can affect system performance. Use of drop-in replacements will void equipment warranties.

Are there any ozone safe R-22 replacements designed to be mixed with R-22?

McKinney: No! Mixing anything with R-22 can degrade system performance, increase reclamation costs, and reduce the supply of R-22 needed for critical applications.

Galyen: Full recovery of R-22 is required before introducing a retrofit refrigerant into a system. Mixing refrigerants in the field produces blends of questionable performance that can be difficult to work with or troubleshoot. It also contaminates R-22 that could have otherwise been recovered and returned for reclaim.

How does the price of the R-22 replacements compare to R-22?

Wight: It depends on where you buy it and where you're buying it from & is it a domestic gas, or an imported gas? There's a lot of fluctuation. Some replacements typically sell for about 30 percent less than R-22 right now, so there is a significant price difference.

McKinney: On average, the leading R-22 replacements i.e. R-422B, R-422D, and R-438A, are 40 to 50 percent less expensive than the current market price for R-22.

Brown: Based on what I've seen, the replacements are roughly half of what R-22 is right now. That sounds like a lot, but break it down: Let's say, arbitrarily, R-22 costs $14 per pound and the replacements cost $7 … most air conditioning systems take 3-5 pounds, so you're really only talking about a price difference of $21 for something you know works & Are you willing to risk a piece of equipment to save $21? So, I tell customers to stay with R-22 until it runs out. Stay with what you know works until you can't anymore. It's a bigger deal on large commercial jobs, but it's also easier to change out the oil on those units.

Kestenbaum: It depends on the application. Let's say you have an application where the replacement refrigerant is 50 percent of the price of R-22, but you have to spend X amount to retrofit the system, you then have to figure out if the system is going to last a number of years where it's worth it before you'd have to change out the system completely. Is the service work worth it? The issue is more than just the cost of the refrigerant.

Is there adequate availability of these new refrigerants?

McKinney: Yes! R-22 replacement refrigerants are well established and the vast majority of wholesale distributors stock one or more of the leading replacements.

Galyen: There are a number of HFC based R-22 retrofit options readily available. Contractors should take the time however to ensure that the retrofit products they are considering are SNAP approved by the EPA for their applications.

How long have these R-22 replacements been field-tested?

McKinney: We started field-testing back in 2001. We have systems that have been in operation with our replacement through 15 consecutive cooling seasons, and with no issues.

Brown: Each refrigerant supplier has done testing and is happy to provide information on why theirs is the best replacement for R-22. We tend to trust what the equipment manufacturers recommend … they don't care what brand it is when they test; they only care about how well their equipment performs. What's on their list of approved refrigerants are what they know works.

What are some of the R-22 applications currently using a replacement?

McKinney: R-22 replacements are being successfully used in a plethora of applications including window units, P-TACS, split systems, package systems, air driers, reach-in and walk-in coolers, and dough mixers.

Galyen: Retrofit and replacement refrigerants are being used across a wide variety of applications that formerly relied on R-22. This includes air-conditioning, as well as medium and low temperature refrigeration. Supermarket systems are a prime example of an application segment that has seen a great deal of retrofit activity.

Wight: Replacements refrigerants are being used in both residential and commercial air conditioning, as well as supermarket refrigeration applications.

Is there any loss in system capacity?

Galyen: Most retrofit options will produce a loss in system capacity relative to R-22, particularly under higher ambient operating conditions.

Wight: We've seen as much as 12 percent in some cases, such as low-temp refrigeration applications.

McKinney: Capacity losses can range from 5-10 percent, depending on the replacement refrigerant and the charging method. The 400 series of refrigerants must be charged in the liquid state and the superheat / sub-cool method must be used to optimize system performance.

Brown: None of the replacement refrigerants on the air conditioning side are as good as R-22.

Are any of the replacement refrigerants dependent on specific oil?

McKinney: Yes, R-22 replacements that do not include a small amount of hydrocarbon to assist with oil return could require a partial or full conversion from mineral oil (MO), to polyolester oil (POE). Always refer to the refrigerant manufacturer's written guidelines.

Galyen: Definitely. Most replacement and retrofit options for R-22 are HFC based. HFCs have poor miscibility with the mineral oil and akylbenzene commonly found in R-22 equipment. While some systems may perform acceptably using immiscible refrigerant-oil combinations, many will not. Danfoss strongly recommends the use of POE and PVE oils with HFC based refrigerants.

Meyers: Many of the replacements proposed suggest no lubricant change or in some cases change over to compatible lubricant.

Brown: Contractors tend to believe what they want to believe. If the refrigerant manufacturer says no oil change is necessary, they tend to believe that. They might find out that's not true in every case. But there are a number of applications that do not require an oil change.

Contractor Strategy

If an equipment owner has an application that is specific to R-22, what options do they have?

McKinney: Implement a comprehensive R-22 management policy. Keep ACR systems tight, and have a reliable leak monitoring system in place to detect the smallest of leaks. Establish a relationship with a refrigerant reclaim company that will reclaim and bank their recovered R-22.

Galyen: Typically, there are three options. First, you can continue to use R-22 for servicing. Obviously, rising refrigerant costs and future availability are concerns for this approach. You could also replace your equipment outright. Here, you'll have to weigh the expected remaining useful life of the equipment along with upfront replacement costs and relative payback periods. Finally, refrigerant retrofits may also be options for many applications.

Wight: The best alternative to R-22 right now is used R-22. Recover the R-22 that's in the system, repair the system and put R-22 back in because that's the best option for topping off R-22. We're also proponents of retrofitting to one of the lower GWP replacements such as R-407C for air conditioners and R-407F for most refrigeration applications, or replacing equipment if practical.

What is the best R-22 management strategy for the HVACR contractor?

Tavolacci: You have to insist your customers switch to R-410A. Get out of R-22. As we inch closer to January 1, 2020, it's going to be very cost-prohibitive to keep R-22 around. If you convince customers to convert to R-410A now, and all show them all the financial reasons and benefits going forward, they're going to remember you were looking out for them. It's that kind of goodwill that translates to referrals.

McKinney: Continue servicing R-22 systems with small leaks with R-22. Systems that have lost their charge completely (flat), or require opening the system for service, should be converted to an ozone safe alternative.

Galyen: A comprehensive strategy is an absolute must. First, a zero-tolerance policy for refrigerant leaks is essential. Systems that are leak tight and well maintained can last for years without requiring additional R-22. Inventory management is also vital. Contractors should work with a well-established reclaim program and make every effort to fully recover R-22 during servicing and decommissioning of ACR systems. Finally, contractors should familiarize themselves with the different retrofit options available for the system types they work with.

Brown: Planned retrofits are always better than emergency retrofits. Many homeowners can't afford to get new equipment without warning & it's better to prepare for something you know is going to happen rather than have to deal with an unplanned expense. Planning change outs or retrofits is a better way to approach the end-user.

Wight: If it's not broken, don't fix it. Retrofitting comes with it's own set of problems. If a customer has a problem with an R-22 system, the contractor can recover that refrigerant, fix the system and put it right back in. The sooner contractors start pushing customers over to new equipment, the better.

Kestenbaum: Contractors should be up to date on their training, with regards to what to do in different situations. It's not the same on every job & sometimes it's clear they should just fix the system and put in R-22. The next job may really need to be replaced. Whatever is truly in the best interest of the customer.

What kind of support is available to contractors?

Brown: There's no reason for contractor's to panic. We're conducting a lot of classes that review the new EPA guidelines. We've compiled a lot of information from both equipment manufacturers and refrigerant suppliers, and put it together into one coherent thought to educate our customers on what to expect. We're doing a lot of classes so that our customers aren't surprised or caught off guard.

Wight: We're trying to partner with and encourage our contractors to start looking at those R-22 alternatives & both the new equipment and the alternative gasses. We do a lot of training classes on it and our entire sales team is well versed in the replacement equipment. The contractors who are prepared for it will be able to capitalize. Those who are riding the R-22 train until it goes off the track are the ones who are going to have trouble.

Kestenbaum: We have information on our website for all the refrigerants from the major manufacturers. It's important for contractors to familiarize themselves with as much information on these refrigerants as they can.

Tavolacci: Training has been a big deal, with regards to selling and conversion. All manufacturers have done & and continue to do & training on new products and the advantages of going to R-410A as a selling feature. We've been educating contractors not only on the phase down and the new refrigerants, but also on how to educate their customers.

Contractor Concerns

Are HVACR contractors paying enough attention to this issue?

Wight: Most are counting on the manufacturers, suppliers and distributors to address the issue before it even gets to them. They say, "Thank you for the education, now what are you doing to make sure I'll be able to buy equipment for my customers when the time comes?"

Meyers: Contractors are paying attention to this as they've continued to see the price of R-22 increase over the last few years. Most contractors have fully embraced R-410A products and this is the mainstay product sold to consumers.

Tavolacci: There has been a lot of awareness, but the contractor hasn't really had any incentive to push the consumer away from R-22. It's incumbent upon the suppliers to give them more information on the influential fate of R-22. It's probably a cheaper alternative for the consumer to simply get an R-22 retrofit, rather than to purchase a whole new system. But the reality is, you pay now or you pay later.

Galyen: Given the amount of change that regularly occurs in our industry and the scope of this issue, everyone should be paying close attention. Contractors who stay informed and help their customers successfully navigate through this transition will have opportunities to grow their business. Those who continue with a "business-as-usual" mentality risk being left behind.

Kestenbaum: No, because they have a bigger operation to worry about … most figure they'll be able to get something that works from suppliers, so they don't need to worry.

Brown: Many are burying their heads in the sand, hoping it'll go away or they believe it's someone else's problem to worry about. Why does the HVACR contractor need to be concerned with this issue?

Tavolacci: Put yourself in the eyes of the consumer & which is, ultimately, who you're after. Who's best interest do you have in mind? Some things don't have instant dividend return, but you have to always be looking to separate yourself from the competition. What can you do to differentiate your company from the rest? You have a product offering similar to your competitors, so it comes down to how easy it is to do business with you and how good of a reputation you have. If you're out there educating your customers & showing them that you're looking out for them & it will set you apart from those contractors who are less proactive.

Meyers: Contractors should continue to focus on providing the end use customer with high quality solutions that offer comfort and energy efficiency. Continuing to service products with refrigerants that are being phased out (like R-22) is not good for the consumer in the long-term. Any short-term savings will be forgotten when the end use customer realizes their equipment has refrigerant that is no longer being supported by equipment manufacturers.

Brown: The day is coming when a homeowner or a building owner will need to change out their equipment because there won't be a compatible refrigerant. Contractors need to start being concerned about and planning for this not now, but a year ago … they need to have already started the process of knowing what their plan is going to be.

What does the R-22 phase out mean to the HVACR contractor's bottom line?

Meyers: As the phase out continues, R-22 refrigerant will more than likely continue to increase in price for the contractor. Contractors will have to pass along these added costs to the consumer in order to not impact their bottom line. This is even more reason why they should move consumers to more environmentally friendly refrigerants like R-410A.

Galyen: The phase-out of R-22 will be challenging for our industry. Servicing of R-22 equipment has become more expensive and will require greater care. Contractors will need to do their research and plan ahead to ensure that they are providing quality service to their customers in the years to come. New technologies however are also providing greater opportunities for replacing aged R-22 systems with more efficient, environmentally friendlier alternatives.

Wight: It depends on the contractor's attitude. Those who take a proactive outlook and educate themselves and their customers on the best options will have opportunities to improve their bottom line. Those who choose to ignore the issue will be ill suited when the R-22 supply finally does run out.

Tavolacci: Keeping your customers happy directly affects your bottom line. If you're not looking out for them now, educating them and going over options with them while they still have time, then you're not going to keep very many of them when there are no options to be had.

 


Pete Grasso is the editor of HVACR Business magazine. To reach him, email pgrasso@hvacrbusiness.com. For additional information on the EPA's R-22 Phase Out, visit the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) website phaseoutfacts.org.

 




About Pete Grasso

Pete is the editor of HVACR Business magazine. He has spent his career working in and with trade media, both as a public relations practitioner and as an editor. He gained a great deal of expertise in the B2B arena, within large and medium sized advertising agencies. Be sure to follow Pete on Twitter and connect with him on LinkedIn!

 




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