California Air Resources Board

Refrigerant technology is rapidly evolving, concurrent with national and international policies moving refrigerants toward less damage to earth’s atmosphere (ozone layer and climate) when they are released.

The California Air Resources Board (CARB) is committed to assisting California businesses make this transition. Environmental technologies are increasingly available, but not all are on cost parity with those that use hydrofluorocarbons (HFCs) today. Incentive programs can assist in the purchase of these environmentally preferable technologies, often because they result in energy efficiency improvements.

Natural Refrigerant Incentive Program (Sacramento area only)

The Sacramento Municipal Utility District (SMUD) has recently launched a first-of-kind utility pilot incentive program to incentivize low-GWP natural refrigerant technologies,  the SMUD Pilot Natural Refrigerant Incentive Program, which offers up to $150,000 for avoided greenhouse gas (GHG) emissions at the rate of $25 per metric ton of carbon dioxide equivalents ($25/MTCO₂e). This incentive is only available in the Sacramento area (SMUD service territory).

General Categories of Incentives

1. Energy Efficiency Rebates

Utilities offer approximately one billion dollars in energy efficiency incentives each year in California. The energy sector is developing opportunities for refrigerant technology which are intended to fund not only energy efficiency gains, but also any reduction in greenhouse gas emissions due to refrigerant changes. Check with your local utility or ask CARB for assistance. Rebates for refrigerant technologies can often be combined with other energy efficiency measures to increase the rebate associated with one utility application process. CARB can assist in finding rebates, but does not have funding for rebates.

Sample of only a few of California utilities' HVAC and Refrigeration programs:

• Los Angeles Department of Water & Power (LADWP):
  • Custom Performance Program
• Pacific Gas & Electric (PG&E)
  • www.pge.com/customized
• Sacramento Municipal Utility District(SMUD): 
  • SMUD Pilot Natural Refrigerant Incentive Program
  • Incentives for heating & cooling systems
  • Custom Incentives: Refrigeration

2. Emerging Technologies Program

Funding and assistance are available for the installation and assessment of pilot projects through the Emerging Technologies Programs (ETPs) offered by the six largest utilities in California. These projects are coordinated through the Emerging Technologies Coordinating Council (ETCC). ETPs can test technology in a lab, and/or bring together a manufacturer of a new technology with a facility that is interested in trying that new technology, for a joint pilot project. Check the ETCC web pages for more information and an application form to submit ideas. CARB is available to assist in the application process, but CARB itself does not have funding for these projects.

3. Supplemental Environmental Projects (SEPs)

A SEP is defined in Section 71118 of the Public Resources Code as an “…environmentally beneficial project that a person subject to an enforcement action voluntarily agrees to undertake in settlement of the action and to offset a portion of a civil penalty.” Accordingly, in order to qualify for funding under the SEP program, a project must reduce direct or indirect air emissions or exposure to air pollutants, relate to the violation, not benefit the violator, and go above and beyond regulatory requirements. Additionally, CARB’s updated SEP Policy gives priority to projects located in disadvantaged communities. 

CARB is currently seeking projects that meet the above mentioned criteria. Under the SEP program, funding new systems and retrofits could qualify. To learn more about the qualification criteria, or to submit a project proposal, please visit the SEP Webpage.

4. Additional Opportunities

This list is not exhaustive. Additional opportunities include: 

1. Research funding may be available through a variety of sources including CARB's research program, the Electric Program Investment Charge (EPIC) program offered by the California Energy Commission (CEC), and a variety of federal programs such as those offered by the U.S. Department of Energy.
2. Incentives for refrigerants were included in the Cap-and-Trade Proceeds Triennial Investment Plan, but have not yet been funded by the legislature.
3. Publicly Owned Utilities (POUs) and electrical co-operatives (co-ops) have the option to use the proceeds from the sale of their allocated cap-and-trade allowances to fund GHG reduction projects, including those involving refrigerant technologies. In 2013 there were over 372 million dollars available for these purposes from the sale of that year's annual allocations to POUs and co-ops.
4. California's Compliance Offset Protocol Ozone Depleting Substances (ODS) Projects, under the Cap-and-Trade Program, provides methods to quantify and report greenhouse gas emission reductions associated with the destruction of high-global warming potential ozone depleting substances sourced from and destroyed within the U.S. that would have otherwise been released to the atmosphere. Note that for refrigeration, only the destruction of certain chlorofluorocarbon (CFC) refrigerants are eligible to generate offsets under that protocol; hydrochlorofluorocarbons (HCFCs) used as refrigerants are not eligible (as of January 2017). Some HCFCs used as foam blowing agents and contained in building and insulation foam (HCFC-22 and HCFC-141b) may be eligible.

5. Awards and Recognition

Various awards programs are available to innovators who help usher in environmentally preferable technologies. Examples include the CoolCalifornia Small Business Awards, the Governor's Environmental and Economic Leadership Awards (GEELA), and at the national level for the grocery industry in particular, the U.S. EPA's GreenChill Environmental Achievement Awards.

Why Now?

The regulatory framework is changing.  Senate Bill (SB) 1383 requires California to reduce HFC emissions 40% over 2013 levels by 2030, and for ARB to develop and implement a Short-Lived Climate Pollutant (SLCP) Strategy, which is a plan to achieve the 40% reduction in HFC emissions and additional targets related to methane and black carbon. Globally the Kigali Amendment to the Montreal Protocol requires a phasedown of HFC consumption in the United States, beginning in 2019. Nationally, HFCs have been increasingly restricted across numerous end use sectors -- from vending machines and chillers to retail food and cold storage warehouses -- by the U.S. EPA Significant New alternatives Policy (SNAP) program. (Check here for approved refrigerants for air conditioning and various refrigeration end-use categories.) All this is happening in the context of the complete national phase out of the production and consumption of new HCFC-22 (R-22), currently the most widely used refrigerant, by 2020.

Next Steps

For further information as to the range of refrigerant technologies available as alternatives to HFCs, visit CARB's webpage, "Choosing a New System?"