Another contractor’s opinion on where R-22 refrigerant prices are going:

According to Charlie McCrudden,  ACCA Vice President of Government Relations, “the EPA controls the production of HCFCs, including the refrigerant known as R-22, through allowances that limit how much each gas manufacturer and importer can produce or import in a given year. Under the implementation of the Montreal Protocol, the production and use of R-22 is slowly being phased out. In August 2011, the EPA proposed to adjust the allocations in place for the years 2012-2014. This adjustment was necessary because of a lawsuit filed by two HCFC producers who had completed a legal trade of allocations that EPA had failed to recognize in its allocations released in 2009. The EPA consulted with industry stakeholders before proposing to reduce the annual allocations. In gathering information used to develop the August 2011 allocation adjustment, EPA found that there was an oversupply of R-22 in the marketplace, partly evident by a lack of demand, increased reuse of R-22, and low wholesale prices. In fact, in 2010, producers of R-22 only utilized 86% of their allocations. A trade organization representing the manufacturers and importers of R-22 supported these claims, and advocated for a 20% reduction in allocations for 2012-2014. By the end of 2011, EPA had yet to finalize its adjustment proposal for the 2012-2014 allocations. But EPA did release a subsequent version of the August 2011 adjustment proposal on December 30, 2011, one that proposed to reduce the allocations for 2012-2014 between 11-47%. Without a finalized adjustment rule, the producers and importers of R-22 were stuck in a legal limbo – on January 1, 2012, they did not have the authority to manufacture or import R-22.”

As a result, the price of R-22 has skyrocketed by as much as 40% in the last few weeks and contractors have not been able to fill standing orders on skids at originally quoted prices. Consumers with with older R-22 systems will be paying considerably higher per pound prices if they cannot be convinced to upgrade their systems. It is inevitable that R-22 refrigerant prices may pass R410A prices later this year.

Welcome to the northeast, the oldest area of the United States with the most dilapidated infrastructure. At times it seems that our world is crumbling around us and every public works project is a patch job. We have the highest concentration of the oldest bridges, tunnels, roads and buildings. Many of them were civil engineering wonders and the pioneering projects of their time (the NYC Subway, the Brooklyn Bridge, The Verrazzano Narrows Bridge, the Empire State Building), but for those that are not designated landmarks, not much has been done to keep them from crumbling. With that in mind, the extension of underground gas mains in the northeast will probably not become a major focus for Federal or State government until our transportation infrastructure has had its first overhaul since the New Deal nearly 80 years ago.  Of course, it will take a well-managed public utility with a stable plan for expansion and the trust of ratepayers before the Public Service Commission will allow an increase in gas rates to include significant extensions. The price of natural gas has plummeted over the last few years because of the discovery of increased reserves created by shale hydrofracturing in the northeast. This graph shows that the average oil customer pays nearly $2400 per year to heat their home, while the average natural gas customer pays only $951. With this in mind, why isn’t now the right time to keep the price of natural gas at a stable plateau by adding an excise tax or rate line item to help pay for the extension of gas mains into additional suburban areas?

This map of the United States shows how dependent the northeast is on home heating oil. The rest of the US (with the exception of Alaska) has much greater access to natural gas or inexpensive electricity. The high cost of home heating in New York and New England is one of the main reasons so many northeasterners are flocking south and west. They just cannot afford the high cost of living here, especially in retirement. Utilities (including home heating), housing costs and property taxes are the main culprits. The mass exodus of the northeastern population also increases the burden on those who stay in hopes of a brighter economic future here. Its time for the state governments and the public utilities to come up with a master plan to provide lower cost natural gas and electricity to all who want and need it. Until then, the best bet for anyone who can’t get natural gas and plans to stay in their home for the next 5 years is to install a geothermal heating and cooling system. The 30% Federal Tax Credit will be available until 2016 and this combined with utility rebates makes it your best return on investment for the long term. However, 2016 isn’t that far off and it is best not to wait for the crush that will ensue in 2014 and 2015 when the price of oil is even higher and the threat of the sunset of the 25C Renewable Tax Credits is upon us.

As always, to keep up to date with what’s new in HVAC technology, visit our website at airideal.com and follow us on Twitter @airideal and at our Facebook page!

So, who is telling the truth and where is the proof?  We don’t sell any fuel commodity, so I really don’t have a horse in the race and although the prices of fossil fuels are changing all the time, there are some constants. Let us say, for this example, that you live in suburban or rural Long Island and you cannot get natural gas as a heating source. As of this writing, according to NYSERDA, the current price per gallon of #2 fuel oil on Long Island is $4.05 per gallon. The cost of propane (LPG) is $3.38 per gallon. To the layman, this may make propane look more attractive than oil, but the truth is that there is considerably more BTU capacity in a gallon of No. 2 home heating oil than there is in a gallon of propane.  This stands to reason because propane is actually a byproduct of petroleum and its relative price fluctuates in much the same way oil does. Considering that there are approximately 138,000 BTUs in a gallon of oil and 92,000 BTUs in a gallon of propane, this changes your understanding a bit.  If you divide the BTU output versus the cost, you will see that currently oil provides 34,100 BTUs per dollar spent while propane provides 27,200 BTUs per dollar spent.  Well, that makes it a no-brainer right?  Oil is cheaper on a per BTU basis.  Unfortunately, you forgot one thing. Gas-fired equipment can operate at a higher AFUE (Annualized Fuel Utilization Efficiency) than propane. So if you compare a 96% efficient propane burner to an 85% efficient oil burner, what happens? Then you are just about dead even. Do the math yourself.  Now, if you add the non-tangible benefits of propane, like being able to install a gas stove, gas dryer or gas fireplace insert, it might just tip the scales for you.  It actually makes sense that this decision could come down to a coin flip on a cost basis because LPG does indeed stand for liquified petroleum gas and propane is a byproduct of petroleum.

So much for the propane versus gas battle. What about the properties and cost of natural gas?  According to NYSERDA, the current price of natural gas in New York State is $1.60 per Therm (or 100 CCF). There are 100,000 BTUs per Therm of natural gas.  Therefore, if you were to price natural gas versus no. 2 fuel oil by the BTU content of a gallon of oil (138,000 BTUs) the current rates would be $4.05 for a gallon of oil and $2.21 for a “gallon” of natural gas with the same heating capacity.  So, is there really a consideration here?  You don’t need to hear about cleanliness, safety, efficiency and other factors with such a price advantage.  However, this has not always been the case.  In fact, the January home heating price of natural gas has fallen by 28% in New York State (and across the country) over the past 5 years.  The cost of petroleum based fuels in New York has continued to steadily rise. The reasons for this evolve around the fact that hydrofracturing processes have opened up vast new reserves of natural gas in subterranean shale fields throughout the US. At the same time, the volatility of foreign oil reserves and the limited capacity of US refineries all but assure that petroleum products will not see the same type of price reductions. At best, petroleum prices will slowly increase with plateaus at various levels.

Now, how does this all relate to the cost of geothermal heating and cooling. After several years of doing Return On Investment comparisons for new homes and buildings I have seen several consistencies. Geothermal HVAC is by far and away the best investment for your dollar in new home heating while the current 25C Federal Tax Credits are in place.  If you combine the 30% Federal Tax Credit (good until 2016) with the advantage of no recurring utility cost (besides a small electric KW requirement) against the installed cost of fossil fuel heating and electric cooling systems, you should see a return on investment of anywhere from 4 to 8 years, depending upon the type of fossil fuel, your rates, your usage and the efficiency of the equipment chosen. In our comparison analysis, the payback period typically ranges from 4-6 years versus fuel oil/propane and 6 to 8 years versus natural gas at current rates. This can change in retrofits depending upon the age of your home, the condition or presence of existing ductwork and the amount of site work required for the ground loop heat exchanger.  Try out our home savings calculator sometime to see your savings versus fossil fuels. This does not apply to commercial projects, as the 30% Federal Tax Credit is only available residentially.  There are other credits and financing considerations for commercial geothermal projects that can be seen in the state incentive database.

If you want to compare all of your potential fuels and relative equipment efficiency to determine what is best for you, this link will download a great fuel comparison spreadsheet.  It was created by the US Energy Information Administration and you can input your local utility rates and fuel costs and the efficiency of the equipment you are considering to determine the best estimate of your true cost to operate with different fuels. Under “electricity”, it does include geothermal heat pumps as long as you know the COP (Coefficient of Performance) of the geothermal heat pump being selected.  We will also be happy to provide an ROI analysis for you on any project you are considering.

As always, to keep up to date with what’s new in HVAC technology, visit our website at airideal.com and follow us on Twitter @airideal and at our Facebook page!

In order for homes to qualify, a builder must use a Quality Assured HVAC Contractor who has been certified through ACCA’s Quality Assured New Homes Program for “ENERGY STAR 3.0″ new home construction projects.

By offering Energy Star rated homes, Real Estate professionals and builders will be providing consumers with the confidence that they will have lower ownership costs, better home performance, environmental consciousness, carbon reduction and assurance that they have made a smart investment.

Homeowners looking to build their own Energy Star homes can find qualified builders at this link.  Air Ideal is a Quality Assured New Homes Recognized Contractor.

As always, to keep up to date with what’s new in HVAC technology, visit our website at airideal.com and follow us on Twitter @airideal and at our Facebook page!

Unfortunately, as these systems are only available in larger sizes of 6 tons and up and only available in 3 phase, they are not yet a viable option for single family homes. However, we are seeing these systems specified on multiple dwelling residential projects like apartment buildings and condominiums. For the most part, this is really primarily a commercial option that can deliver added points for LEED buildings and deliver the ultimate in sustainable design. Existing ground source heat pumps on the market provide dual speed for their premium models (like the WaterFurnace Envision line), but there has not been a variable speed inverter compressor option available to the market. In redeveloping their water-cooled condensing unit lines to accommodate the geothermal market, these VRF/VRV manufacturer’s have provided a significant boost in efficiency. Based upon an energy modeling study for assisted living facilities in various cities across the country, it was proven that this type of hybrid VRF-Geothermal installation provides on average a 37% efficiency increase over VRF air-cooled heat pumps. Although VRF/Geothermal is still a costly initial installation versus established fossil fuel and air-cooled systems, emerging energy efficiency technology experts are now touting ground-source variable refrigerant flow heat pumps as an affordable energy option.

As always, to keep up to date with what’s new in HVAC technology, visit our website at airideal.com and follow us on Twitter @airideal and at our Facebook page!

Beware the mercury bulb thermostat

With the advent of all of the buzz circulating around the new Nest and internet enabled thermostats, there is one big question that goes unanswered. What happens to all of the cast-offs? When a homeowner or contractor replaces a thermostat, the vast majority become land-fill or end up burned in incinerators. Considering the fact that many older mechanical thermostats contain mercury, this creates quite a significant environmental impact. A spokesperson for the New York Public Interest Research Group points out that “an estimated 310,000 mercury thermostats are disposed of every year in New York, but only slightly more than 1 percent of those are recycled.” If this is just the number of mercury laden thermostats introduced to the waste stream annually in New York State alone, consider the implications nationally and internationally. For years, Honeywell and other control manufacturer’s have lobbied against legislation that would require manufacturers alone to recycle thermostats and reclaim mercury. Today, Honeywell responded to allegations that it has prevented such environmental legislation by stating “Honeywell strongly supports legislation that bans the sale of mercury-containing thermostats and mandates mercury thermostat recycling, with responsibilities shared among thermostat manufacturers, wholesalers and contractors.”

New York State Assemblyman Robert Sweeney (D-Lindenhurst) is sponsoring a bill that would require manufacturers to meet targets for safe disposal of mercury thermostats.”There is no reasonable way for the average person to legally dispose of mercury containing thermostats,” Sweeney has stated. There is currently a voluntary program in place through an industry funded non-profit called the Thermostat Recycling Corporation (http://www.thermostat-recycle.org/). TRC looks for contractor, distributor and manufacturer volunteers to act as collection sites with a free thermostat recycling program. Members are shipped recycling bins to be returned at no charge to the TRC once they are filled. Environmentally minded industry advocates are urged to join the program.

As always, to keep up to date with what’s new in HVAC technology, visit our website at airideal.com and follow us on Twitter @airideal and at our Facebook page!

The Wall Street Journal’s “All Things D” interviews Tony Fadell, who discusses the design concept, selling out the first production lot and funding: Link Here

Yes, if you haven’t noticed, we drank the Nestade. That is our new Nest pictured below…

As always, to keep up to date with what’s new in HVAC technology, visit our website at airideal.com and follow us on Twitter @airideal and at our Facebook page!

As always, to keep up to date with what’s new in HVAC technology, visit our website at airideal.com and follow us on Twitter @airideal and at our Facebook page!

Nest’s brand is really based upon its simplicity. They went to market with the assumption that most folks were do-it-yourselfers, who didn’t want to hire a professional to install their thermostat, so they simplified the process. Heck, they even give you a screwdriver with interchangeable bits. No wiring diagrams, just labels to put on your 24 volt wiring to key to the old thermostats contacts. Of course, most of these should be color coded anyway, but they make no mention of that. There is no proprietary gateway or network required (like RedLink), just your own WiFi. The other manufacturer’s have protected their primary distribution partners (i.e. wholesalers and contractors) and remained with 3 step distribution while Nest has marketed (and sold) directly to the consumer. Not even Home Depot gets a cut. Nest uniquely understood that their target market was the tech savvy consumer who most likely has an iPhone or an Android and can set up his own WiFi network. The days of marketing to the consumer who can’t program his own VCR are gone. Besides, if you can’t install it, they figure your kid can.

However, there might be a bit of shortsightedness in this approach. By cutting out two steps of the historical distribution market, you also cut off significant access to an established market channel. Many contractors have a large and established service agreement base and they will not market a product to their customers if they cannot share in the profit center. Nest may not need to coddle the wholesaler because they usually do not deal directly with the consumer, but contractors are still the gatekeeper because their skill set is required to install, maintain and service heating and air conditioning systems.

Nest Labs has sold out its initial production quota of the learning thermostat and may continue to do so until the initial hype and demand subsides. Ultimately, though, Nest will need access to a larger consumer base who are not part of the iPhone generation and they will need contractor partners to access this market. That won’t happen until they develop a program that allows for a mark-up or profit sharing relationship via a contractor stocking or consignment program. This probably won’t develop until Nest has units sitting in warehousing distribution channels when supply has caught up with demand.

As always, to keep up to date with what’s new in HVAC technology, visit our website at airideal.com and follow us on Twitter @airideal and at our Facebook page!

However, make sure that the Nest is compatible with your type of HVAC system.

To do this, the consumer will actually have to take their thermostat off the wall and check the low voltage wiring terminal designations used. It is not available yet in multi-stage, so only single stage residential and light commercial systems are eligible. It is also not yet compatible with humidifiers and air cleaners, but a Nest that controls accessories and outdoor sensors is in the works.

So, will Nest change the world the way the iPhone did? Will slick design and marketing create piles of used thermostats in our nation’s landfills? I guess that all depends upon whether you buy it or not! For more on Nest, read this

NY Times article

or

visit their web site

.

As always, to keep up to date with what’s new in HVAC technology, visit our website at airideal.com and follow us on Twitter @airideal and at our Facebook page!