New HVAC and Water Heater Standards Impact Rental Property

The U.S. Department of Energy(DOE) recently made some regulatory changes that will eventually affect rental property.  These changes have to do with energy efficiency as it relates to water heaters and HVAC systems.

The DOE now requires the Seasonal Energy Efficiency Ratio or SEER rating for air conditioning systems to be increased from 13 to 14.   As the SEER rating increases so does the efficiency of the rated unit.  As a result, the cost of the unit also rises.  In addition, in order for a HVAC system to work properly at the new rating, all components of the system must be compatible.  If your unit  stops operating and the replacement system has to be 14 SEER your cost could be substantial because your entire system may have to be replaced as opposed to just one component.  This would be the case even if that companion component still shows signs of life.  Furthermore, the 14 SEER rated units tend to be larger in size.  If any part of your HVAC system is located in a small tight space, you may have to enlarge the space or move the unit to accommodate the shiny new part.  Bigger is not always better.

The changes for water heaters comes as a result of an amendment to the National Appliance Energy Conservation Act.  The change to higher energy ratings for water heaters raises similar concerns.  The new units are simply more expensive and  they may also be larger in size.  Once again, if the water heater is located in a tight space, to replace it may require an expansion of the space or the relocation of the water heater.  As you can imagine, this will cost more money.

If there is any good news with regard to this issue, it is that vendors have been given time to use up their existing inventory of the outdated systems before having to install the more energy efficient kind.  Thus we have what is referred to as a “window of opportunity;” if you feel that your HVAC system or your water heater is at the end of its useful life, you may want to consider replacing it with a less costly alternative to the new, highly energy efficient models while you still can.  For your information, on the average, an air conditioner will last 10-15 years, a furnace will last from 15 to 20 years and a water heater will last from 6 to 12 years.