驰辞耻谤听residential air conditioning system聽relies on聽refrigerant, a chemical that allows the system to cool your home. While an AC system’s refrigerant supply is self-contained, leaks do聽sometimes聽develop. If you’ve recently聽attempted聽to service or even tune-up your air conditioner, you聽might聽have noticed a聽sharp聽increase in prices. Since the聽start聽of this year, refrigerant costs have聽steadily increased聽from $70 a pound to聽over聽$300 per pound in some cases.
Why is this happening? While higher prices can聽indicate聽supply shortages, this is not the case. These recent聽increases聽are聽primarily聽due to new regulations and international tariffs聽affecting聽the refrigerant market. Continue reading below for聽further聽information about why costs are聽rising.
Fortunately, There’s No Shortage
While the聽overall聽supply of refrigerant is stable, the聽sizeable聽jump in price聽concerned聽some distributors. Buying in bulk was no longer as cost effective as it聽typically聽was. Many companies聽dialed back聽their purchases as a result. And in some cases, customers who聽consistently聽placed large orders have been temporarily restricted from doing so. This ensures more customers have access to the refrigerant they聽require. Waiting for prices to聽even out聽may appear to be a supply shortage, but the industry is聽merely聽being cautious.
So Why Are Costs Rising?
Higher refrigerant prices are a direct result of other countries competing against the U.S economy. Other countries abroad are subsidizing their own refrigerant production, which lets them聽affect聽the U.S markets with an artificially inexpensive supply. When these policies聽work, U.S. manufacturers are聽pushed聽out of the market, after which the global supply is controlled by another country. This is聽called聽“dumping” and can聽lead to聽economic monopolies.
In an attempt to聽counter聽these policies, the U.S government responded with anti-dumping tariffs and made them聽. Suppliers suddenly have larger expenses to pay on past product, and there is some聽uncertainty聽around future pricing as well. This is causing the price on聽available聽refrigerant to聽rise聽and fluctuate while the industry聽adapts. Currently refrigerants entering the country are subject to a tax of around 210% percent. The U.S. could replenish refrigerant stockpiles聽using聽European markets, but costs there are similarly prohibitive. Even with tariffs in place, European refrigerant is still more expensive.
R125 Is a Chemical Component of today’s Refrigerants
The issue is further complicated by聽monopoly聽control of R125, a key component in聽many聽different refrigerants. Manufacturing the most common refrigerant,聽R410A, requires R125. R125 is also affected by the anti-dumping tariff, leaving American companies with聽fewer聽options.
Will This聽Affect聽New Refrigerants and HVAC Equipment?
Some industry professionals are聽watching聽to see if the increase in price聽affects聽the adoption of new refrigerants.聽A formal聽transition to newly developed refrigerants is scheduled for 2022, but it is聽unclear聽if the anti-dumping tariffs will聽affect聽the rollout.
Similar to how the U.S phased out R22 refrigerant over a period of 10 years, R410a will be gradually replaced by more聽effective聽and environmentally-friendly alternatives like R32. The 10-year transition allows the industry time to聽adapt. When R410a compatible systems start to聽break down, R32 and other A2L refrigerants should be much more聽easily accessible.
Environmental policy like the Montreal Protocol聽may聽also influence future prices. Provisions drafted for this legislation dictate that refrigerant prices must聽steadily聽increase to聽encourage聽the transition to R32. As R410a is phased out, the higher costs also聽mirror聽the diminishing global supply.
You May Not Be Able to Avoid Overpaying, But We’ll Help Minimize Risk
Finding a leak in your refrigerant supply is already聽stressful聽without the聽punishingly high聽costs. Local service companies聽like聽天美传媒聽are taking steps to help their customers avoid these increased costs. We’ll do our best to聽maintain聽a steady supply of refrigerant while聽offering guidance聽on cost effective solutions for staying cool and comfortable. Give us a call today at (866) 963-7996 for more聽information.
