Improving the energy efficiency of room air conditioners (RACs) while transitioning to low global-warming-potential (GWP) refrigerants will be a critical step toward reducing the energy, peak load, and emissions impacts of RACs while keeping costs low. Previous research quantified the benefits of leapfrogging to high efficiency in tandem with the transition to low-GWP refrigerants for RACs (Shah et al., 2015) and identified opportunities for initial action to coordinate energy efficiency with refrigerant transition in economies constituting about 65% of the global RAC market (Shah et al., 2017). This report describes further research performed to identify the best-performing (i.e., most efficient and low-GWP-refrigerant using) RACs on the market, to support an understanding of the best available technology (BAT). Understanding BAT can help support market-transformation programs for high-efficiency and low-GWP equipment such as minimum energy performance standards (MEPS), labeling, procurement, and incentive programs. We studied RACs available in six economies—China, Europe, India, Japan, South Korea, and the United States—that together account for about 70% of global RAC demand, as well as other emerging economies. The following are our key findings: • Highly efficient RACs using low-GWP refrigerants, e.g., HFC-32 (R-32) and HC-290 (R-290), are commercially available today at prices comparable to similar RACs using high-GWP HCFC-22 (R-22) or HFC-410A (R-410A). • High efficiency is typically a feature of high-end products. However, highly efficient, cost-competitive (less than 1,000 or 1,500 U.S. dollars in retail price, depending on size) RACs are available. • Where R-22 is being phased out, high GWP R-410A still dominates RAC sales in most mature markets except Japan, where R-32 dominates. • In all of the economies studied except Japan, only a few models are energy efficient and use low-GWP refrigerants. For example, in Europe, India, and Indonesia, the highest-efficiency RAC models employ the low-GWP refrigerants R-32 or R-290. • RACs are available in most regions and worldwide that surpass the highest efficiency levels recognized by labeling programs. • Fixed-speed RACs using high-GWP and ozone-depleting R-22 refrigerant still dominate the market in many emerging economies. There is significant scope to improve RAC efficiency and transition to low-GWP refrigerants using commercially available technology and to design market-transformation programs for high-efficiency, low-GWP equipment including standards, labeling, procurement, and incentive programs.

In October of 2016, nearly 200 Parties agreed to amend the Montreal Protocol in Kigali, Rwanda, to phase-down consumption and production of hydrofluorocarbons (HFCs) by 2050. Growth in the use of HFCs, including those currently used as refrigerants in air-conditioning systems, is being driven by demand from emerging economies, hot climates, and rising incomes that are also undergoing rapid urbanization and electrification. Air conditioners (ACs), as an energy-intensive end-use technology, are also covered by a growing number of energy efficiency standards, labeling, procurement, incentive, and other supporting efficiency programs. Therefore, improving room AC energy efficiency and transitioning to low-global warming potential (GWP) refrigerants simultaneously presents significant opportunities to deploy energy efficient technology and reduce the energy and emissions impacts of room ACs, while keeping costs low for consumers. This report aims to provide an initial sense of the opportunities to improve efficiency and transition to low-GWP refrigerants by reviewing the HCFC and HFC regulatory framework and energy efficiency standards and labeling programs in 19 economies that account for roughly 65 percent of global room AC demand. Based on this analysis, we identified key opportunities for coordinated action on efficiency improvement and refrigerant transition for the domestic room AC sector (i.e., ductless mini-split ACs), such as: - implementing or revising standards and labeling programs to improve efficiency levels with the possibility of adding a low-GWP criterion. - combining fixed speed and inverter AC product categories to account for seasonal variations in climate and part-load operating conditions, and using seasonal energy efficiency ratio (SEER) instead of energy efficiency ratio (EER) to better reflect performance of inverter ACs. - implementing market transformation programs, such as bulk procurement programs, to drive down the costs of efficient technology through economies of scale. - aligning timelines for implementing efficiency standards with timelines for refrigerant management plans to coordinate policy actions. - maximizing the energy efficiency improvements of Montreal Protocol investments by coordinating efforts to help keep costs low for consumers and manufacturers during equipment redesign and manufacturing line retooling for refrigerant transition. In order to realize the significant peak load, energy saving and climate benefits of these opportunities associated with improving energy efficiency in tandem with the refrigerant transition, some risks may need to be mitigated, principally safety concerns over risks of accidental ignition with refrigerants rated flammable. This can be mitigated by continuing and accelerating the development of safety standards currently being updated, for example, by the International Electrotechnical Commission (IEC) and improving training for production, installation and maintenance during the use of flammable refrigerants. While some low-GWP refrigerants may cost more than the current baseline refrigerants, the cost of refrigerants is only ~1% of lifecycle costs for an AC. Costs can also be reduced through manufacturing advances and efficiency improvements, particularly if they are supported by policies that encourage technological development through deployment of superefficient ACs at scale. Finally, during the transition, there is a risk of obsolete technology being deployed in markets that either have not updated their standards or have later compliance dates. This risk can be mitigated by updating standards and reviewing them periodically to ensure their effectiveness.