Several key factors are driving price changes in 2026, including:
Tariffs on Imported Components: Baseline 10% tariffs on all imports, combined with up to 145% on Chinese goods and 25% on Mexican products, are adding significant cost pressure across the supply chain. Even U.S.-assembled systems rely on imported compressors, circuit boards, and copper components that now carry higher duties.
Full Enforcement of R-454B (A2L) Refrigerant Mandate: As of January 2026, all new residential and light commercial HVAC installations must use refrigerants with a GWP of 700 or less. R-410A is no longer permitted for new equipment. The transition to R-454B and R-32 requires redesigned cabinets, coils, controls, leak detection systems, and new safety features, all of which add cost to equipment. Ongoing R-454B cylinder shortages have further pressured pricing.
Ongoing Inflation & Commodity Cost Increases: Rising costs in metals (copper, aluminum, steel), electronics, transportation, and logistics continue to impact production and distribution. Aluminum prices surged further in early 2026 due to Middle East conflict.
Market Slowdown & Antitrust Scrutiny: A class-action lawsuit filed March 20, 2026 (Berg v. Robert Bosch, LLC, et al.) alleges that Trane, Carrier, Daikin, Bosch, Lennox, Rheem, and AAON coordinated price increases dating back to 2020. The case remains in early stages; all named defendants have denied the allegations. Meanwhile, residential HVAC shipments have been soft, with distributor Watsco reporting January-February 2026 sales down approximately 5%. ACHR News
Expiration of Federal HVAC Tax Credits: The One Big Beautiful Bill Act (July 2025) terminated Sections 25C and 25D effective December 31, 2025. Homeowners lost the up-to-$2,000 annual credit for qualifying heat pumps and air conditioners, and the uncapped 30% credit on geothermal systems that routinely saved $8,000-$10,000 per project. Consumers now face the full unsubsidized cost of new equipment for the first time since 2022, on top of manufacturer price increases and higher A2L equipment costs. No federal replacement has been introduced. IRS | ENERGY STAR
Boykin Air 