Carbon Tax: Opportunity or Threat to the Air Conditioning Industry?

Keywords: Filters, Air Filters, Conditioner

Whether you think the Carbon Tax is the worst piece of government policy in history or an environmental imperative, it is going to happen next year in Australia. Ignoring the impact of carbon pricing would be like trying to ignore MEPS.

Key factors are:

  • Australia has had relatively cheap electricity costs by world standards, so there has been no real financial penalty for less efficient design.
  • Electricity prices around the country are rising sharply even without carbon pricing. (NSW just had a rise of 17%+ following similar big rises in recent years).
  • The price rises will continue for some years as ageing electricity infrastructure is replaced or upgraded. (You can blame lazy state governments of every political persuasion for this one.)
  • Carbon pricing initially will only have small impact on the overall price of electricity.

How does this flow through to the air conditioning industry?

In both commercial and domestic markets the increasing electricity price will increase the demand for energy efficient air conditioning equipment. Even though carbon pricing will only have a relatively small impact on prices to start with, the ballyhoo surrounding the Carbon Tax will focus both domestic and commercial air conditioning users on energy efficiency.

With domestic / light commercial product you can expect MEPS to continue to be a demanding process.

Commercial product above 65kW although not covered by MEPS and only partially covered in the BCA is an area where energy efficiency will become increasingly important. Temperzone has offered energy efficiency improvements like digital scroll compressors, EEV, plug fans and a range of heat reclaim and recovery options across its commercial product range for several years.

Energy efficiency improvements greater than 30% are possible with units using a combination of these components. With energy prices increasing Return on Investment (ROI) on these products has reduced in some instances to less than 2 years. If you would like to see more information on the range of these options offered by Temperzone please click here to download our Product Information Bulletin on energy efficiency solutions.

Temperzone Vertical Package Units, which are the subject of another story in this issue – click here, are an example of a product now having digital scroll compressors, EEV and plug fans as standard. The story on heat reclaim for supermarkets also in this issue – click here, is an example of another type of energy efficiency option provided by Temperzone.

With increasing electricity costs, ROI for these energy efficient options is reducing to the point where what was optional equipment a few years ago is now becoming standard components.

Whilst there is a disconnect between the price sensitivity of builders and developers and the energy efficiency demands of building owners and users, the increased focus on energy efficiency brought about by carbon pricing will see increased demand for energy efficient buildings.

There is already a trend with convenience stores and supermarkets etc, to reduce the air conditioning life cycle from 12-15 years down to as low as 8 years on the basis of energy efficiency. It is simply better for the bottom line to run the most energy efficient equipment.

Overall increased electricity costs, from every source, will move the focus from the installation cost to the operational cost of the air conditioning equipment. This will be for financial not environmental reasons. Ultimately it will be accountants not climate scientists who demand the energy efficiency! Why because saving tens of thousands of dollars in running costs makes good business sense.

Like it or not the Carbon Tax may be a big opportunity for the Air Conditioning Industry.

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