Inflation Has Hit Your Air Conditioner, and Federal Regulations Are to blame

The Fourth of July kicks off the hottest two-month period of the year in the United States, and for most of the country, it’s hard to imagine surviving without air conditioning. But millions of homeowners whose systems are failing will soon learn that air conditioning has joined the long list of items hit by inflation.

Whether you decide to repair or replace your existing unit, the price is skyrocketing. And our own federal government is a big part of the problem. It’s enough to make a 90-degree day seem even hotter.

The single largest price increase in recent years came from the Department of Energy. The Biden administration’s DOE home appliance regulators have been on a roll lately, with pending or recently finalized regulations targeting stoves, dishwashers, furnaces, ceiling fans, water heaters, refrigerators, light bulbs and washing machines.

But worst of all may be the central home air conditioner efficiency regulation, which was finalized in 2017 and went into effect on January 1, 2023. We’re in the second year of the rule, and installers say it has single-handedly increased the cost of a new air conditioning unit by at least $1,000.

And the DOE isn’t even D.C.’s biggest air conditioning enemy. That honor belongs to the Environmental Protection Agency. For decades, the EPA has implemented regulatory limits on the supply of refrigerants used in nearly all residential systems, based on claims that those refrigerants harm the environment. Some of the targeted refrigerants are subject to production quotas, while others can’t be produced at all.

Needless to say, dwindling refrigerant supplies mean higher prices. One banned refrigerant that once sold for a dollar a pound now sells wholesale for more than $30 a pound. Another has tripled to more than $10 a pound. The retail cost for homeowners is even higher, with a home system requiring up to 15 pounds of refrigerant.

In general, it usually costs several hundred dollars more to repair a system that has lost refrigerant due to a leak than it did before the federal government created an artificial shortage. In some cases, these repairs are so expensive that homeowners are better off scrapping the old system and buying a new one.

The EPA has also saddled air conditioner repairmen with piles of red tape that make the job more time-consuming and require extra equipment and training, translating into higher bills for homeowners trying to stay cool. More such measures have been proposed.

It’s only going to get worse in the coming years. The next EPA regulation, which applies to all home systems manufactured in 2025 and beyond, requires that only climate-friendly refrigerants approved by the agency be used. Get ready for another price increase. Several manufacturers are estimating price increases of 10% or more—well into the hundreds of dollars. And that number could end up being even higher—the aforementioned DOE rule that went into effect last year turned out to be at least five times higher than the agency’s original estimate.

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To make the inflation train ride even more painful, the electricity needed to power air conditioners is also getting more expensive. That includes a 5.9% annual increase since May, according to the latest data from the Bureau of Labor Statistics. Like the rise in equipment and maintenance costs, the higher electricity bills to power an air conditioner are partly due to unwise climate policies.

The only good news for overheated homeowners is that the summers won’t last forever. The bad news is that inflation could continue into winter, and there are equally bad furnace measures on the way. Hot or cold, regulators won’t leave us alone.

Ben Lieberman is a senior fellow at the Competitive Enterprise Institute, a free-market public policy organization based in Washington, DC.