The R-22 refrigerant phase-out is imminent. . . . What is your exposure?

The R-22 refrigerant phase-out is imminent. . . . What is your exposure?

R-22 is a common HCFC refrigerant used in rooftop and split-system AC units manufactured before 2010. The cost of R-22 has more than doubled in the last three years to ~$700/container and will continue to increase as the phase-out further restricts supplies.

The U.S. began phasing-out ozone-depleting R-22 in 2010 to comply with the Montreal Protocol, beginning with a ban on the use of the refrigerant in new equipment. The phase-out will culminate in 2020 when virgin R-22 will no longer be produced in or imported into the U.S. After 2020, very limited supplies of recovered R-22 will be available.

Develop an inventory

Develop an inventory of all AC equipment in your building or portfolio that contains R-22 refrigerant by reviewing building records and/or distributing a survey. Gather equipment nameplate information and quantify historical refrigerant leaks/purchases to establish a baseline for evaluating your options. While R-22 AC units are typically found in most properties constructed before 2010, multifamily and retail properties with packaged or split-system AC units will likely have the greatest capital exposure.

Fix leaks now!

Constantly recharging AC units that leak refrigerant is a losing battle that can drain your operating budget. Review property-level refrigerant logs to identify AC units with a history of leaks. Implement leak detection protocols to identify and repair leaks. It is important to note that well maintained AC units that do not leak refrigerant can operate for years without requiring additional refrigerant.

Know your options

AC equipment has a typical life expectancy of 15-25 years. Maximizing AC equipment life cycles, rather than replacing equipment prematurely, typically provides the greatest ROI. If your property or portfolio contains a variety of AC equipment types and vintages, leveraging multiple refrigerant transition options may be the best strategy. Consider the following options:

  1. Stay with R-22. Fix leaks, recharge and retain R-22 refrigerant until the equipment fails, and then replace with higher efficiency equipment. 
  2. Use replacement refrigerants. Replace R-22 with lower cost HFC replacement refrigerants (e.g., MO-99, R-407c, and many others). It is important to understand the pros and cons of each replacement refrigerant and impact on equipment performance.
  3. Replace AC equipment. Replace R-22 AC equipment with new higher efficiency equipment with R-410a or other HFC refrigerants.

Let ROI drive the strategy

Keep it simple, let ROI drive the strategy and decision-making process. Analyze your R-22 AC unit inventory and refrigerant transition options. Develop high-level guidance for actions to take based on equipment type, age, conditions, risk tolerance, and life cycle costs. Following a consistent approach at the property-level or across your portfolio will minimize your exposure and allow you to strategically forecast capital costs through the R-22 phase-out and beyond.

If you would like to discuss the development of a R-22 transition strategy for your building or portfolio,

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