If the grid achieved 100% zero carbon today and all homes adopted heat pumps, California could potentially emit at least 60 million metric tons of CO2 equivalent over the next 10 to 20 years solely from refrigerant leaks in residential and commercial HVAC equipment. Hydrofluorocarbon (HFC) refrigerant emissions have 400 to 4,000 times the climate forcing power of CO2 itself. Two new policies enable California’s drive to reduce HFC emissions and create a demand for more “refrigerant efficient” HVAC and ultra-low GHG refrigerants:

• Utilities must now use the new Total System Benefit metric to evaluate energy efficiency incentives including consideration of refrigerant emissions,
• Recent Air Resources Board (CARB) regulation of HFCs.

This report examines the market for commercial HVAC focused on Variable Refrigerant Flow (VRF) and competitive technologies in light of these changes, finding that utilities should re-evaluate incentives for VRF or suspend them until 2027 when the most powerful and common HVAC refrigerant, R-410A, is replaced.