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Split decision

Are inverters helping split systems garner a greater share of the air conditioning market? Or, are there still questions to be answered relating to their performance in high-ambient – especially T3 – conditions, which demand that the inverter operates on a higher load, as opposed to a partial-load profile? What are manufacturers doing to overcome the challenge, if it is, indeed, the case? Hannah Jo Uy has the story…

| | Nov 25, 2017 | 11:43 pm
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Michel Farah

With global trends strongly pointing to a concerted move towards more energy-efficient products, owing to greater awareness of the harrowing impact older, unregulated products have on the environment, split systems are on an upward trajectory. And in this, they have an ally in inverters.

“Higher standards of living, combined with population increase and higher temperatures, are factors increasing the use of splits worldwide, says Michel Farah, Director of Corporate Environmental and Social Responsibility, Daikin Middle East and Africa.

Changho Lee

Adds Changho Lee, General Manager, RAC Sales Division at LG Electronics Gulf: “In the HVAC sector, the market share for split units is around 30-35% and is projected to steadily grow by 3-5% every year. Furthermore, due to the energy regulations in all GCC [region] countries, the demand for low-quality air conditioners is rapidly declining every year, as customers opt for high-quality branded air conditioners that benefit customers and manufacturers.”

Lee’s words are echoed by Giorgio Elia, Vice President, UTC Climate, Controls & Security – Middle East, who says: “There’s been great acceptance of new innovative products and technologies in various geographies around the globe. A similar trend is visible in the GCC [region], where governments are leading initiatives related to energy efficiency regulations that direct manufacturers to use innovative solutions in new product introductions.”

Giorgio Elia

As a result, Elia says, the introduction of new products, such as the inverter units and the VRF, offer advantages that include “a small footprint, high durability, long piping, reduced number of condensing units, electrical safety features, optimum power consumption and tolerance for high ambient climate conditions”.

Dawood Bin Ozair, CEO, Blue Star International, says the evidence of the popularity of splits is in the figures. Speaking specifically about non-ducted splits, he says the market size is estimated to be half a million units, with the market growing at an average of 10-12 %. As for ducted splits, he says the market size is around 200,000-250,000 units. Like Elia, painting a sanguine picture for splits, he says he, too, has witnessed changes emerging in recent requirements, which are beginning to favour energy-efficient, inverter-based technologies that are compliant with safety standards and which bear the ‘G’ mark.

Dawood Bin Ozair

The way forward: Global move towards inverterisation

Farah says the requirement to go inverter is affecting all cooling solutions across the board. Developers who are seeking low-carbon footprint and high-energy-performance buildings, he adds, are embracing inverter-based systems, be they in splits, VRF multi-split systems or, more recently, in chillers.

Adds Elia: “There has been a strong increase in awareness for the usage and benefits of inverter systems within the last few years in the GCC region. The continuously evolving local and regional HVACR regulations have further influenced the growing demand for the systems. The high efficiency and adaptability of the product makes it an excellent choice for a wide range of applications and a popular choice in the region.”

Tariq Al Ghussain

Tariq Al Ghussein, CEO, Taqeef, believes that the biggest market is still the split unit, to date. This, he says, is owing to the fact that it’s cheaper and to the advantages it offers with regard to installation. “Splits used to be inefficient,” he says, “because standards didn’t require them to be efficient, but since the UAE has set particular standards, split units today, even those that are not inverter-type, are already twice more efficient than those five years ago. I think inverter splits are going to be even more efficient. Initially, the cost was prohibitive, but it is going down. I think that in the future, all split units will be inverter-based.” Al Ghussein adds that an issue to consider is the high-ambient temperatures in the region, which might require the product to undergo extra “tweaking”. That aside, he says that “in Europe, in China it’s all inverter – people don’t use fixed-speed compressors”.

Farah echoes this, when he says that with the increase in the level of efficiency of splits and the introduction of inverter technology, “the case is strong for the economic buyer looking to reduce his running electricity bill”. He adds that when compared to window units, the efficiency premium could reach 50%, which will have a veritable impact towards reducing the cost of energy used to produce the required cooling.

Speaking on the progress of inverter systems, when compared to traditional splits, Farah says: “The ratio of inverters versus non-inverters varies by region, with Japan, Europe, Oceania and China leading with higher than 50% share of the market. In the Middle East and Africa, this ratio is increasing rapidly in favour of inverter splits at a rate of 7-10%, currently.”

Lee, however, suggests lower projections in the GCC region, especially when compared to a more enthusiastic acceptance of inverter-based technology among other countries. “Currently, the market share for inverter-based air conditioners in the GCC region is very low,” he says. “It is less than one per cent, as it is not easy to design inverter air conditioners for the region’s extreme weather conditions. However, in other countries, like the US and countries in Europe, the market share for inverter air conditioners is at 100% already because of its high-energy efficiency and faster cooling.”

Bin Ozair, while acknowledging the strong progress of splits, also takes a conservative view with regard to its dominance in the region. “In a span of 10 years, maybe,” he says. “Eventually, yes, the cost-effective and energy-efficient [nature of the split systems] will always prevail, but this will not be immediate; old units will not be replaced right away.”

Deepak Krishnan

Deepak Krishnan, Manager, Air conditioner & Major Appliances, Appliance Product Department, Panasonic Marketing Middle East & Africa, also shares a rather conservative view. “Being a high-ambient region, challenges exist,” Krishnan says. “The penetration of inverter is still very low, but we are under the assumption that over the period of the next 2-3 years, the market will shift much more to the inverter.”

Krishnan sheds further light on the issue, saying that inverter technology is ideal for conditions where the partial load is high and in countries where the ambient temperature stays between 35 and 37 degrees C. In such cases, he says, inverter makes a lot of sense, as it would offer a lot of savings. “In the Middle East, the ambient temperatures are high throughout for a long period of time, and the inverter is always operating on a higher load. In that sense, does it really save money? It’s a good question to be answered. If you look at it from the SEER point of view, yes, there might be some savings, but still, in this region, the acceptability of inverter might take some time. Penetration is yet to gain ground in the GCC region.”

Lee says that owing to this, LG has directed its resources and manpower to develop inverter-based products suitable for high-ambient conditions in the region. “The Gulf is currently witnessing an upsurge in the demand for air conditioners during the summer season, as temperatures shoot up to around 50 degrees C, resulting in air conditioners consuming approximately 70% of the total power consumed.” He says that in light of this, inverter technology can have a huge impact on energy consumption, if a way can be found to raise their efficiency in high-ambient conditions. Of course, that would pose the question: ‘What are the cost implications of product development to raise the efficiency?’

While manufacturers try to work their way to a solution for inverters to be able to function efficiently in high-ambient – especially T3 – conditions, the consensus is that it falls upon consultants to better understand the technology, as it evolves, and present it to their clients as a viable solution. Farah says that in local markets, the consultant plays an important role in choosing the right system for the right project to satisfy the owner’s requirement. Krishnan adds to that by pointing to what consultants can do in terms of possibly bridging the gap with regard to higher capital cost that comes with more efficient systems. “If the consultant requires a certain amount of energy efficiency then the contractor or developer would go for that,” he says, “but if there is no such demand in the project, people go for the normal low-cost splits.”

A swing factor arguably in favour of inverter-based splits over other systems promising similar energy efficiency is ease of installation. This view is apparently supported by a large number of contractors and technicians, who have the experience of installing traditional splits.

Lee emphasises the importance of installation, when he says that it remains LG’s aim to make sure its products are designed for easier and more efficient installation, regardless of the surroundings and the number of people involved in the installation process. “By reducing the manpower and the time required for installation,” he says, “it is now possible to install more air conditioners at more homes in a shorter period of time.”

Elia throws in a word of caution, though, when he says that it is important to train relevant stakeholders on the new system, despite their familiarity with traditional splits. “While installation remains the same,” he says, “contractors still require in-depth training and knowledge of the inverter components to effectively commission and service the equipment.” In view of that, Elia suggests that dealers and contractors ought to opt for the training programmes available in the market.

Farah seconds this, stressing that manufacturers should promote knowledge-exchange in the industry. “Manufacturers are also playing an important role in training installers and technicians to keep up with the technology advances,” he says. “Having said that, we believe the market requires more training on refrigerant-handling practices, including recovery, to avoid release into the atmosphere.”

Inverter-based splits and VRF technology

There is growing talk that splits are now at par with VRF systems, in terms of energy efficiency, largely owing to the incorporation of inverter technology. Elia addresses the issue by saying that both systems offer advantages that can greatly benefit different segments. “Even though inverter splits and variable refrigerant flow (VRF) systems are based on the same technological principle, whereby they both use inverter compressors and fan motors, they cater to two completely different segments with diverse customer and project needs,” he says. Inverter-based split systems, Elia adds, are primarily used for small residential applications that can accommodate a small indoor unit and an outdoor unit, while VRF systems are used for light-commercial applications, such as mid- and high-rise buildings, both commercial and residential, and can connect up to 64 indoor units to one outdoor unit. Commenting on the benefits of VRF units, he points out to the comparatively smaller footprint on project premises, while allowing for the connectivity of “comfort-centric, sophisticated controls to monitor energy efficiency”. He also points out to how VRF units can support long refrigerant line applications, such as within high-rise buildings.

“Both inverter splits and VRF systems have the advantage of regulating the compressor speed in response to cooling demand, thus ensuring efficient and economical operation,” Elia says. “Conventional fixed-speed units operate at 100%, delivering a fixed volume of cooling, which means the compressor has to stop and start to maintain the desired room temperature. An inverter air conditioning system varies the speed of the compressor, delivering precise cooling or heating while using a fraction of the power. This makes it more efficient.” The benefits, Elia says, makes inverter hi-walls up to 30% more efficient compared to similar capacity fixed-speed systems. Additionally, he says, payback is fast emphasising that the additional investment done on an inverter hi-wall unit versus a fixed-speed is recovered within a year from energy savings. (Elia notes that the payback calculation he cited is based on a comparison of 1.5 TR Carrier hi-wall system – fixed-speed versus inverter.)

“Both the hi-wall inverter and VRF products deliver energy efficiency and environmental benefits – utilising non-HCFC refrigerants and surpassing the ASHRAE 90.1 minimum energy efficiency requirements,” Elia says. “They also meet and surpass most of the HVAC energy-efficiency regulations of GCC [region] countries. Even though VRF and inverter splits cannot be directly compared, there is an overlap of applications, where both inverter splits and VRF systems can be used.”

Getting into the VRF versus splits debate, Bin Ozair says: “While the biggest market for splits still is Saudi, in the UAE, the market is well-classified. Splits are used in the construction segment labour camps and in low- and medium-range housing projects. We don’t think the VRF will impact the market share of split air conditioners. VRF might affect the market of ducted and small chillers, though.” Bin Ozair says the demand for splits is also being driven by government initiatives featuring low-cost housing projects, budget housing programmes and building-retrofit initiatives.

Krishnan provides another facet to the argument when commenting on current building practices. “If you have too many splits, the roof can get crowded with many outdoor units,” he says, before adding that the current trend in construction involves roofs with swimming pools and play areas. “The space to install the number of outdoor [units] is becoming less and less,” he stresses. “Here, the trend is changing, and people are going towards VRF or multi-split environments.”

In line with this, Krishnan is of the opinion that in countries with there are no geographic constraints, such as Oman and Saudi Arabia, splits will continue to dominate the market. And in markets in Dubai and Abu Dhabi, where real estate development is more vertically inclined “splits will have their own limitations”. Krishnan adds that Panasonic currently has a strong market share in Oman at 35%. “That’s basically where our split segment is strong,” he says. The UAE is more of a replacement market rather than new constructions coming up.” 

Positive trajectory in the GCC further compounded by overall user experience

With leading manufacturers showcasing a steady move towards, and greater investment in, R&D of inverter-based splits, the upward trajectory of the technology is reinforced by its positive reception among end-users and growing support from government. As the public becomes increasingly more aware of the cost-effective and energy-efficient advantages of the product, demand is creating a buoyant mood among manufacturers.

“The inverter splits technology adapts its power consumption to maintain the required cooling set point within 0.5 degrees,” Farah says. “This brings a higher level of comfort for a lower running cost. The user experience of inverter air conditioners is the main factor that is helping increase the awareness of its benefits and the motivation to repeat this experience in other projects. For the end-users it is lower bills, for the power-generation company, it is lower peak hour demand and for the environment it is lower greenhouse gas emissions. It is simply the way forward.”

Lee says that following the announcement of LG’s move towards global inverterisation, earlier this year, the company has received positive reception upon the release of its new inverter products. This, Lee says, is owing to the fact that the product was “designed and developed based on customer feedback and, more importantly, to reduce environmental impact”.

Farah shares milestones at Daikin’s end, saying the company won certification from the Abu Dhabi Quality & Conformity Council for its R-32 inverter split system in 2016. The awarding of the certificate, he says, is a shot in the arm for efforts aimed at safeguarding the environment, given the low-GWP nature of the refrigerant. Making the point that with R-32, inverter-based splits can tick the box for being an ally in efforts aimed at mitigating climate change, Farah says the global sales of inverter splits using R-32 has reached 10 million units since it was first launched in 2015, with major market shifts from R-410A to R-32 in markets such as Australia, Indonesia, Thailand and India. “More than 15 global brands have launched air conditioning systems using R-32, worldwide,” he says, “and we believe that more manufacturers will follow the trend. With one-third the global warming potential of R-410A, R-32 is helping to address the need to mitigate global climate change and to help meet both the HFC phasedown schedule and the HCFC phase-out schedule.”

Calculable paybacks: Weighing the numbers

Of course, the interest of end-users and developers for these products are not only a result of their concern from the environment. It is also encouraged by the ability to reduce one’s energy consumption, though work needs to be done on the T3 front, in the GCC region. “The whole region needs energy efficiency,” Bin Ozair stresses. “The reason is that power is getting more and more expensive, people need energy-efficient [products] at competitive prices.”

Adds Elia: “Countries in the Middle East have been steadily improving efficiency standards in response to enhanced technology trends and to help reduce the burden of power tariffs. This shift has led to an increase in demand for higher-efficiency air conditioning solutions from regulators as well as end users and contractors. The trend is prevalent across the region and has had an impact on every product category within the HVAC industry.”

Al Ghussein sums it up simply when he says, “Efficiency saves money.” He adds that currently, government subsidies on electricity tariffs may be cushioning the blow of an increase in electricity costs, which may deter people from the higher capital cost of new, yet more energy- efficient systems. Despite this, he believes, as the numbers continue to go higher, people are only going to be more aware and recognise the importance of reducing electricity consumption.

Also touching on the potentially cost-prohibitive nature of new technology, Farah says: “In all cases, the higher price paid at purchase is compensated quickly by the lower energy bill. The payback time depends on the electrical rate and the number of running hours. Depending on the kWhr rate, it could be as quick as one year, using Dubai rates for units running more than eight hours per day.” He adds that the refrigerant used in inverters is similar to non-inverters, without an additional burden on price.

Natural order

Though the rate at which they are doing so is subject to debate, inverter-based split systems seem to be on their way towards edging out traditional splits. And with the possibility of innovations in the anvil to overcome the T3 conundrum, the mood is buoyant. Further factors that are seen as boosting an increase in uptake of inverter-based splits include a proactive mindset among GCC region countries to lower environmental impact and a desire among consumers to lower their electricity consumption owing to constantly increasing power tariffs. Overall, it is evident that less-efficient systems will soon fall prey to the natural order.

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