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
- 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
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
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
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
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.