Regulations driving R&D in US, says Tecumseh

Jim Rutz, Director of Global Platform Management, Tecumseh, spoke on current trends in the United States and how the regulation, shaped by trends, is driving R&D among companies. “In mature markets, like the USA,” Rutz said, “retrofits probably account for 70% of installs. It’s one reason why the most recent energy regulations are constructed to include minimum standards on retrofit systems. In nations with higher GDP growth, the retrofit percentage is certainly lower, but is often still significant, 30% or more.”

Rutz said that while these new regulations do drive R&D, the challenge for companies is working with different agencies to ensure that demands are not contradictory. He gave an example of how the US Department of Energy (DOE) may mandate minimum efficiency levels while the Environmental Protection Agency (EPA) may dictate the use of refrigerants that are inherently less efficient. “[The] Industry is left to figure out how to reconcile the competing demands,” he said, “You can say that regulations motivate companies to be innovative. Occasionally, federal, state and local governments will offer incentives – tax credits, grants or subsidies. Often these are short term and dependent on the current political party in power and, therefore, are somewhat fleeting in their effects.” He added that utilities may also offer various incentives to promote the use of a more efficient product and that most probably there is greater incentive to adopt efficiency gains than eco-friendly content.