Historically, regulatory shifts have shaped the HVACR industry. Periodic changes and updates have typically been followed by a relatively predictable path forward. Today, with the potential for federal deregulation, refrigerant and energy standards in flux, incentive rollbacks, and evolving state-led policies, the landscape has become significantly more complicated.
The current climate of uncertainty makes it more difficult for contractors to plan for the future or advise customers on how to make next-generation equipment selections. To help add clarity and keep you informed, we’ve summarized the most recent changes impacting HVACR professionals.
- Elimination of federal tax credits
Incentives made available under the Inflation Reduction Act (IRA), including 25C, 25D and 45L, have been eliminated through the passing of the “One Big Beautiful Bill.” For example, 25C offered up to $2,000 for qualified heat pumps, water heaters, biomass stoves or biomass boilers through 2032.
Notably, elimination of these tax credits is not expected to significantly influence heat pump growth, as many homeowners have already selected the technology without taking advantage of these incentives. For now, homeowners have until the end of this year to claim up to $2,000 for qualifying heat pump installations. Regardless, contractors should explore local utility rebates or state-led programs to uncover available incentive opportunities.
- EPA Technology Transitions Rule under “reconsideration”
Manufacturers have already completed designs for new equipment entering the market in 2025, and converting product lines back to R-410 would increase costs and supply chain complexities. In addition, future reductions in HFC supplies are still planned per the global HFC phasedown, which will make supporting legacy HFC equipment more difficult moving forward. Current industry projections indicate that the worst of the R-454B shortage is behind us and is expected to improve for the remainder of 2025 and beyond.
- Energy efficiency standards: delays and repeals
EPA’s ENERGY STAR program and the Department of Energy’s (DOE) energy standards are being reevaluated under current leadership. The ENERGY STAR program could be cut or potentially defunded per the EPA’s proposed reorganization and budget.
Recent DOE announcements about postponing and potentially reversing HVACR efficiency standards have created confusion about future efficiency targets. Central air conditioning and heat pump (CAC/HP) equipment is currently guided by the 2023 standard, with a new version of the CAC/HP test procedure introduced in 2024.
For OEMs, this revised CAC/HP test procedure would change how equipment is tested, but would not increase the minimum efficiency levels. However, the effective date of the new test procedure has been delayed multiple times. Plans to update DOE efficiency standards may also be impacted, as the process of defining the next iteration of efficiency metrics was expected to begin in January.
Copeland remains confident that OEMs will continue to drive innovation and enhance system performance and efficiency advancements, despite the current regulatory uncertainty.
Stay informed to guide the path forward.
As the HVAC industry finds itself in one of its most dynamic regulatory periods in years, contractors’ roles as trusted advisors to their end-user customers will be more vital than ever. By tracking developments closely, communicating openly and adapting strategically, you can help customers make smart equipment decisions and help the industry weather these changes.
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