Abstract
HVAC Manufacturers are Challenged to Make More Environmentally Friendly HVAC Systems
A major issue is the use of harmful refrigerants to the environment; manufacturers are spending money in producing refrigerants acceptable by EPA standards. HVAC equipment uses different refrigerants like HC (HydroCloro), HCF (HydroCloroFluoro), and HCFC HydroCloroFluoroCarbon). The main goal is to remove the FluoroCloro portions out of the refrigerants, which are the most harmful to the environment. Manufacturers are producing blends of refrigerants with basic components and combinations of other refrigerants without the FluoroCloro molecule. Industry participants are making new refrigerants that in the long term will have a better affect on environment. The goal is to remove the harmful refrigerants from all the HVAC equipment in the industry. It is known that no matter how good the system is it will always leak, therefore manufacturers are also looking to build products that are as close to leak proof as possible. In case of leakage manufacturers want to have refrigerants less
harmful to the environment. The government and EPA work hand in hand with industry participants to create better solutions.
Replacing CFC equipment is a major driver for retrofit orders in the HVAC markets. End users are becoming more concerned about the environment, in most cases enforced by legislation, and the trend to reduce hazardous refrigerants is expected to push replacement orders for chillers still operating with CFC molecules. In 1996, government banned the manufacturing of CFC components, which meant that the estimated 80,000 to 100,000 non-residential chillers using CFCs in the U.S. would need to be either retrofitted or replaced. It is estimated that in 2003 about 40,000 CFC chillers in the U.S. were still operational. The continuous need to replace CFC chillers provides ongoing opportunities for manufacturers. The new and more efficient chillers available can save end users in operating costs and energy consumptions, which further increases the incentives to replace CFC chillers. Some of the popular alternative refrigerants used and accepted by the EPA include: HFC-134a, HCFC-123, HCFC-22,
HFC-410A, and HFC-407C.
More Efficiency Reducing Energy Costs is Increasing Demand for HVAC Equipment
As end-users are becoming more aware about the potential cost saving through higher efficiency HVAC systems, demand for new and upgraded HVAC products is expected to increase over the forecast period. Manufacturers are responding by creating products with more efficiency and advanced technologies. According to the U.S. department of energy, a major energy source in commercial and institutional buildings where property managers are looking to save on costs is in the HVAC systems. The energy consumption from HVAC systems accounts for approximately 40.0 percent of the energy used in U.S. buildings. HVAC equipment manufacturers are designing products with better efficiency to help property owners save on energy costs, which in turn is driving fresh demand for HVAC equipment Technological advances in efficiency have allowed owners of new equipment to save between 40.0 percent and 60.0 percent of their previous utility costs. This increased efficiency comes from improved compressor
design, increased effectiveness of heat exchangers, and even new means of pumping refrigerant through a system.
Growing Demand for High-Efficiency and Packaged Unitary Equipment
The HVAC equipment industry is experiencing a growing demand for unitary equipment, as the market is moving towards smaller size, hence a favorable growth in the unitary equipment markets. Compared to other HVAC equipment markets, unitary equipment is experiencing the highest growth and taking some revenues from the applied systems markets as end users are increasingly favoring smaller packaged equipment. End-users can benefit in terms of convenience, lower initial costs, less downtime and more control over cooling or heating. End-users have the ability to install one or more smaller unitary equipment packaged with all the essentials and controls as opposed to larger applied systems that are likely to provide excess capacity. Unitary equipment controls can minimize over-cooling which tends to be more common in applied systems.
The HVAC equipment industry is experiencing a slow growth for applied systems due to an increasing demand towards smaller size. Growth of this market is expected to remain slow due to an increasing demand for multiple smaller packaged unitary equipment. Applied systems markets are expected to sustaining itself with drivers such as a strong retrofit and replacement market, and the construction of new large commercial and institutional buildings.
As the need to replace CFC chillers becomes more imminent, manufacturers are benefiting from ongoing opportunities for replacements. Additionally, new and more efficient chillers provide attractive incentives for energy savings, which further increases the demand new chillers. Air-cooled systems are experiencing higher growth potentials than water-cooled as the trend is moving towards smaller equipment and away from cooling towers and the consequences for waste water treatments. In 2004, revenues for water-cooled systems are estimated to have dropped by 2.0 percent; where as air-cooled systems have showed an increase of 4.0 percent in revenues. | 
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