Act to Reduce the Depreciation Period for Commercial Cooling System Reintroduced

April 18, 2007
ARI applauds legislation to help America meet energy conservation, clean air goals

The Arlington, VA-based Air-Conditioning and Refrigeration Institute (ARI) recently applauded U.S. Representative Peter Hoekstra (R-MI) for reintroducing legislation that would provide an incentive for building owners to replace inefficient cooling equipment with modern technology.

The Cool and Efficient Buildings Act (H.R. 1888) would amend the U.S. tax code to reduce the depreciation period for commercial cooling systems - large-tonnage liquid chillers to commercial air-conditioners and heat pumps - from the current 39-year period to a more realistic 20 years. A wide range of commercial buildings from shopping malls to hospitals would qualify for the new depreciation rate.

“Our industry has made great strides in improving the efficiency of cooling and refrigeration systems to help the nation and world reduce energy consumption and lessen the environmental impact of this equipment,” says ARI President Stephen Yurek. “Unfortunately, the replacement of older, inefficient cooling systems that use ozone-depleting refrigerants has been slower than expected, partly due to the tax code.”

The legislation would spur the replacement of more than 35,000 chillers using ozone-depleting chlorofluorocarbon refrigerants, which still operate in North America, with equipment that is 40-percent more efficient and uses refrigerants that are less detrimental to the earth’s ozone layer.

“We are confident that the combination of a new depreciation schedule and escalating energy costs will prompt business owners to purchase newer, more efficient cooling systems,” says Yurek.

According to a recent analysis, replacing inefficient commercial cooling equipment will save 137 trillion BTUs a year by 2015. The savings is equivalent to the amount of energy consumed by approximately 1.4 million average U.S. households. “Considering commercial cooling equipment is one of the largest users of electricity in commercial buildings, replacing these systems with newer technology is probably one of the easiest energy-efficiency measures to undertake,” says Yurek. “For too long, facilities have operated under a restrictive tax code that does not reflect the actual lifespan of this equipment. Passage of the Cool and Efficient Buildings Act is a common sense solution that will benefit building owners and the environment.”

This information was provided by the Air-Conditioning and Refrigeration Institute (ARI), the trade association representing manufacturers of air-conditioning and commercial refrigeration equipment. For more, visit ARI at (

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