Good Intentions with California’s Title-24 HVAC Rule

Back in 2014, California enacted a new regulation that held great promise to save energy, protect consumers and professionalize the HVAC industry.  The rule stated that whenever a residential furnace or air-conditioner was replaced, the HVAC contract must pay for a permit and hire a qualified third-party inspector to confirm that the system was operating efficiently.  Unfortunately, compliance with permitting dropped from 80% to about 10% and follow-up studies confirmed that the majority of new systems are not being installed according to the more efficient “best practice” standards:

Final Report Analysis: “Title-24 HVAC Permit and Code Compliance Market Assessment”, commissioned by the California Utilities commission in late 2017:

The first set of charts were the result of field testing on a sample of 200 air-conditioning systems that had been replaced between 2014 – 2016.  These can be found on PDF page 101 in Fig. 45 – Fig. 47 and Fig. 51- Fig. 54.  The main takeaways from this section are as follows;

  • ~85% of the HVAC systems are replaced without the required permits or inspections,

  • ~50% of the systems are not properly charged,

  • ~75% do not meet air-flow requirements,

  • ~50% do not meet duct leakage standards, and

  • ~50% are over-sized.

The second set of charts are the survey results regarding the role of HERS raters tasked with commissioning the HVAC systems in the field at the time of install.  Those can be found starting on PDF page 210 in Fig. 118 – Fig. 122, and Fig. 145, 154, and 165.  The main takeaways from;

  • HERS raters lack the HVAC training to perform the tests,

  • HVAC technicians lack the training to complete the work properly,

  • HERS raters may compromise test results in order to appease the HVAC contractors,

  • There is minimal difference in the rates of compliance for permitted & inspected systems vs. un-permitted & un-inspected systems, mostly negating the potential benefit of $700 in additional compliance costs (per system / customer).  

The follow-up program analysis shows that the California Energy Commission wasn’t getting the results they were hoping for when they enacted Title-24 with the goals of; reducing air-conditioning energy consumption, and delivering more value to the consumer through a new layer of regulation.

However, most interesting was not the low rates of compliance and performance. I think that was somewhat predictable.  The silver-lining is that 25% – 30% of the HVAC contractors are already doing a great job of saving energy and delivering more value to their customers, regardless of whether or not they pull the required permits or hire an independent HERS inspector. 

While it may be important to ramp up enforcement for the poor performers (the original motivation for the study), I think we should also think about ways to recognize and support the best contractors in an effort to help them grow their market share. This will in turn put more pressure on the laggards. We could incorporate a “job well done” component to our approach. These crews are the most cost-effective point-of-leverage that we have at our disposal today. In their normal course of business, they have already accomplished most of the heavy lifting.

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