Allocation Slashed by 57% in 2015
Contractors who have found R-22 readily available at their local supply houses had best prepare for a drastic drop off in such supplies very soon. The U.S. Environmental Protection Agency (EPA) announced its final phase-down schedule regarding production and importation of virgin R-22 on Oct. 16, 2014.
The order calls for an immediate reduction of R-22 from 51 million pounds produced in 2014 to a maximum of only 22 million pounds produced starting Jan. 1, 2015. That’s a 57% reduction.
Aggressive Linear Reduction
In its final ruling, the EPA described the phase-down as an aggressive linear reduction. “EPA is sending a clear signal to the industry that allocation will be dropping,” said Charlie McCrudden, senior vice president of government affairs. The final allocation meets the 2020 phase-out deadline and should help achieve a smooth transition to 410-A air conditioners. The smart play is not to wait until the last minute to prepare your customers for a time when R-22 will not be affordable or readily available.
R-22-Immediate Price Increase & Shortages Will Follow!
The agency settled on a much more aggressive phase-down schedule than was anticipated with a 57% allocation reduction scheduled for Jan. 1,2015. Just days after this information was released we saw an instant 50% increase in the price of R-22 and many more increases are sure to follow. It will soon be cost prohibitive to fill an air conditioner with R-22 refrigerant. We encourage all contractors to prepare their customers for a quick transition to the new 410-A air conditioners.
R-22 Supplies Will Be Limited
Suppliers and Distributors are already prepping for the industries limited R-22 supply. Suppliers will soon limit the amount of R-22 that any contractor may purchase thus creating a supply and demand scenario that will fuel major price increases. Prices are sure to skyrocket and consumers will have a hard time paying for a commodity that will easily reach $100 per pound in the coming year. We anticipate that this aggressive reduction ruling by the EPA will result in existing inventory to be drawn down at an accelerated rate as A/C contractors attempt to build their stock and hold on to their inventory in anticipation of limited supplies.
Customer Education Urgency on R-22 Ban
With prices skyrocketing and shortages just around the corner contractors will find it difficult to continue servicing R-22 equipment in the very near future. Consumers needing any major repairs would be wise to consider replacing their old inefficient air conditioner rather than waste their money on a system that must be replaced.
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