The Installing Clean Efficient Energy Hastens Our Transition (ICEE HOT) Act is a bill passed by the United States Congress in 2022. It amends the Energy Policy Act of 2005 by establishing a rebate program for energy-efficient appliances. The act offers rebates for electrification products, including air-sourced heat pumps, cold climate heat pumps, heat pump water heaters, electric stoves and other similar items. 

This act is a notable example of the electrification of America. These incentives can convince more heating, ventilation and air conditioning (HVAC) manufacturers and suppliers to develop electric devices, which decreases greenhouse gas emissions. In addition, residents and end users can experience a broader selection of energy-efficient options, decreasing their carbon footprints and energy costs.

The HVAC ICEE HOT Act is expected to have lasting impacts on the HVAC industry, prompting HVAC providers to adjust their approaches.

What Rebates Will the ICEE HOT Act Provide?

The ICEE HOT Act will appropriate $10 billion in mid and upstream rebates from 2023 to 2030. With these rebates, the government hopes to encourage the production of 7.5 million heat pumps and make the energy-efficient heat pump market more affordable. The legislation would grant $500 per noncold climate unit and $1,000 per cold climate unit, encouraging manufacturers, distributors and homeowners to invest in efficient heat pump energy.

The ICEE HOT Act coincides with increasing government efforts to reduce emissions and make energy efficiency more accessible for Americans. Similar initiatives are being promoted to help Americans reduce costs and emissions in the long term. The Department of Energy (DOE) recently finalized efficiency standards for non-weatherized gas furnaces. Starting in 2028, homes with these furnaces and mobile homes will need to have gas furnaces with 95% annual fuel utilization efficiencies. With these regulations in place, the DOE predicts cumulative savings of $24.8 billion over 30 years.

With these energy-efficient measures and the incoming ICEE HOT Act, homeowners can begin exploring cost-effective rebates for their home upgrades. Use the EnergyStar site to explore your rebate options, or look for the rebate link on some of our heat pump models to get the best deal for your home.

Impact on HVAC Manufacturers and Suppliers

The ICEE HOT Act's passage encourages the manufacturing of electronic systems for residential and commercial spaces. The legislation benefits manufacturers, suppliers and distributors at all supply chain stages. For instance, upstream rebates incentivize initial manufacturers to build electric systems, while midstream rebates encourage distributors to ship them.

In response, HVAC manufacturers and suppliers should alter their strategies in anticipation of factors like:

• Increased demand for energy-efficient products: The ICEE HOT Act, similar legislation and growing concerns surrounding climate change can cause an increased overall demand for electric and energy-efficient products. To meet the demand, manufacturers can adjust production schedules. They might need to increase their overall output of energy-efficient HVAC systems, which could cause them to limit the production of others.
• Reduced demand and increased costs for gas furnaces: With legislation and rebate incentives pushing toward heat pumps, manufacturers will likely see an increase in the cost of producing oil and gas furnaces as heat pumps are made more affordable.
• Need for qualifying heat pump products: The ICEE HOT Act will offer rebates for building electrification products like heat pump water heaters, residential air source heat pumps and cold climate heat pumps. Pivoting to focus on producing these products will provide greater access to rebates and allow your operation to meet government standards and consumer demand. The Act will also offer midstream incentives for distributors providing zero-emission home heating systems.
• Changes in product standards and certifications: An increase in the manufacturing of HVAC systems causes developers to be more aware of product standards and certifications. Energy-efficient units must meet certain federal standards, causing manufacturers to shift their methods. Federal organizations might also pass new regulations for energy-efficient products as more legislation about climate change occurs.
• Supply chain considerations: The shift in demand and product standards requires manufacturers to adjust supply chain ordering techniques. They might have to order higher quantities of materials, increase the volume of ordering days or make other adjustments. Manufacturers might also have to find new suppliers or distributors to meet these needs. In addition, these new supply chain changes could impact typical overhead costs, leading to budget adjustments.

Impact on HVAC Contractors and Service Providers

The ICEE HOT Act will also affect HVAC contractors and service providers. The legislation also contains midstream incentives for distributors — the electrification rebates reward providers that promote and sell energy-efficient options to consumers.

HVAC service providers can change operational methods to qualify for the rebate programs and meet new demands. They should consider these components:

• Training and certification requirements: Installing electric HVAC systems and other energy-efficient options requires different techniques or certifications. HVAC technicians might need additional training to learn these approaches. In addition, providers might have to learn more about energy-efficient model specifications so they can explain them more effectively to consumers.
• Shift in customer demands: As of 2019, nearly 70% of global consumers have shifted their buying habits as their fears of climate change grow. To mitigate their environmental impact, many consumers choose greener home appliances. HVAC suppliers can meet the uptick in demand by increasing their energy-efficient inventory.
• Business growth opportunities: HVAC suppliers can use the changes prompted by the ICEE HOT Act to enhance their overall business approach. Marketing your services as energy-efficient can convince more consumers to try or stay with your brand. You gain the rebate program benefits, while consumers can enjoy long-term cost savings and lower their carbon footprints.

How to Prepare for the ICEE HOT Act

Both HVAC manufacturers and providers can prepare themselves for the ICEE HOT Act with research and other strategies. Here are five steps for preparation:

1. Understand local regulations and emissions targets: It's essential to understand local and federal regulations for carbon emissions during HVAC system manufacturing. If you build energy-efficient options, the construction must meet more stringent standards. As you develop or sell electric and other energy-efficient products, you should ensure you understand these regulations to avoid any financial or legal penalties.
2. Adopt energy-efficient technologies: Manufacturers will need to increase their volume of energy-efficient technologies to meet interest in green appliances. You can also integrate other energy-efficient technologies into daily operations to establish a comprehensive shift to lower your carbon emissions. For instance, manufacturers might adopt machines that emit fewer carbon emissions during production.
3. Implement training and skill development: Let your employees know about the impacts of the ICEE Hot Act. The legislation will likely have lasting effects on production and demand, and similar codes could be passed in future terms. Training and skill development strategies prepare your workers to meet these shifts in attitudes and demands as the HVAC industry looks to a greener future.

A notable way to succeed in a greener environment is by implementing energy-efficient devices into your workplace. Ingram's Water & Air Products offers a wide range of electric and energy-efficient products for heating and air conditioning, geothermal applications, indoor air quality, water heating and more. These items can help you meet compliance standards and the ICEE HOT Act requirements, allowing for rebate program benefits. In addition, you can equip yourself to meet the new sustainability trends by increasing your inventory of energy-efficient supplies.

Next Steps

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