The commercial heating and cooling industry is facing a series of policy shifts that could impact facility managers, building owners, and contractors alike. With the new administration moving quickly on economic and energy policies, recent changes related to efficiency standards, tariffs, and Inflation Reduction Act (IRA) funding are making waves. While these changes may initially seem disruptive, they also present opportunities. Here’s what facilities managers need to know.
1. DOE Postpones Commercial Heating and Cooling Efficiency Standards – What This Means for You
The Department of Energy (DOE) has confirmed that there will be no rollback of previous efficiency standards. However, upcoming efficiency standards have been postponed, which means:
- More Time to Plan: Facilities won’t be required to meet higher efficiency standards in the immediate future, allowing more flexibility when upgrading systems.
- Equipment Availability: Contractors can continue offering a broader range of commercial heating and cooling equipment at various price points.
- Cost Considerations: A slowdown in efficiency increases could temporarily ease the rising costs of commercial heating and cooling systems, benefiting capital budgets.
While efficiency improvements remain a priority, this delay provides breathing room for facility managers to plan upgrades strategically rather than rushing to comply with rapidly shifting standards.
2. New Steel & Aluminum Tariffs Could Drive Commercial Heating and Cooling Equipment Costs Up
The administration has imposed a 25% tariff on steel and aluminum imports, including potential tariffs on Canada and Mexico. These changes could lead to:
- Increased Equipment Costs: Many commercial heating and cooling systems rely on steel and aluminum components, meaning facilities managers may see higher prices for new units and repairs.
- Supply Chain Disruptions: If manufacturers face sourcing challenges, lead times for new equipment may increase.
- Shifting Market Trends: The tariff structure may incentivize a move toward higher-efficiency products, which could align with long-term sustainability goals.
Facilities managers should factor these potential cost increases into their maintenance and capital budgeting processes, prioritizing planned replacements before costs rise further.
3. IRA Funding Pause – What Happens to Commercial Heating and Cooling Rebates?
President Trump’s executive order pausing the disbursement of funds from the IRA (Inflation Reduction Act) and Infrastructure Investment and Jobs Act has created uncertainty regarding incentives for commercial heating and cooling, particularly heat pump rebates. Here’s what remains unaffected:
- Tax Credits Are Still Available: The 25C tax credit, the 45L tax credit, and the 179D Commercial Building Tax Deduction remain intact and available to eligible facilities.
- State Programs May Continue: In states where rebate programs had already been launched, some incentives may still be honored. Facility managers should check with local agencies and contractors for updates.
- Long-Term Impact Is Unclear: Since changes to the IRA would require congressional action, it remains to be seen how long these policies will stay in place.
What Facilities Managers Should Do Next
- Stay Informed – We will continue to keep you up to date on evolving regulations and industry changes, ensuring your facilities remain compliant and cost-effective.
- Plan Ahead for Pricing Changes – If your facility is considering equipment upgrades, it may be beneficial to purchase equipment sooner rather than later to avoid potential price increases due to tariffs.
- Leverage Existing Tax Credits – Take advantage of tax deductions and credits that remain in place to offset costs for energy-efficient upgrades.
- Evaluate Maintenance Strategies – With the uncertainty around future rebates, optimizing maintenance plans to extend equipment life can be a smart financial move.
At Wicked Cool Mechanical, we are committed to keeping our customers informed and helping them navigate these changes. If you have questions about how these policies impact your commercial heating and cooling systems or need assistance planning upgrades, reach out to us today.
