Is “Whole-System” ALD Cheaper than Mandatory Manual Leak Inspections?

 

Grocers are budgeting millions for manual leak inspections to comply with the AIM Act and a growing patchwork of state-level refrigerant regulations. Indirect “Whole-System” Automatic Leak Detection (ALD) alleviates this requirement - at a lower cost than inspections.

 

 

How big Is your manual leak inspection budget for 2026?

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If you’re a grocery executive or facilities leader, chances are that you have already set aside money for manual leak inspections in 2026 - and it’s not a small budget line item. In many organizations, this single compliance line item runs into the millions per year. It’s the kind of expense that is viewed as “unavoidable,” which forces leadership to take away funding from other critical maintenance and facilities priorities.

Keilly Witman, a well-known expert on refrigerant compliance, put it bluntly: “You shouldn’t even have a line item in your budget for manual leak inspections in 2026. One of the best investments a grocery company can make right now is to implement an AI-based ‘whole-system’ indirect leak detection system, and pay for by avoiding manual leak inspections.” That’s a bold statement, but it’s one worth examining—especially as regulatory deadlines close in.

Manual inspections aren’t just a formality; they require trained technicians to spend four to six hours onsite at each store, methodically checking equipment. Add trip/travel charges, and the bill for a full-store leak inspection often comes in around $1,000 (sources: maintenance leaders at a large Texas grocery chain and a national grocery chain). In many cases, contractors complain they lose money if this is a fixed-fee item. Because each qualifying leak requires four inspections per year (or twelve per year if the system is large enough), and leaks can drag on for multiple years, leak inspection costs can reach hundreds of thousands—or millions—spent annually just to stay compliant.

You shouldn’t even have a line item in your budget for manual leak inspections in 2026. One of the best investments a grocery company can make right now is to implement an AI-based ‘whole-system’ indirect leak detection system — and pay for it by cancelling manual leak inspections.
— Keilly Witman, RMS, Former EPA
 

 

Leak inspection requirements

Here’s how “whole system” indirect ALD can substantially reduce—or eliminate—manual inspection burdens.

 

 

My stores aren’t in one of these states — what does the AIM Act alone require?

Even if your stores aren’t located in California, New York, Washington, or one of the other states implementing refrigerant management programs, the federal AIM Act still applies—and for many operators, that’s where the bulk of their near-term compliance costs will come from.

Under the AIM Act’s Subsection (h) refrigerant management provisions, any commercial refrigeration appliance with a full charge of 50 pounds or more of HFC refrigerant must undergo quarterly leak inspections if it has been found to leak more than 20 percent of its refrigerant charge within the preceding 12 months (Federal Register Final Rule, Oct. 11, 2024; EPA fact sheet). The purpose of these inspections is to ensure that repairs are effective, that leaks are resolved promptly, and that refrigerant emissions are minimized in line with federal climate policy.

While the threshold sounds like it might apply to only a small minority of systems, real-world data suggests otherwise. On a September 2024 webinar, the General Manager of Trakref reported that approximately 25 percent of all refrigeration assets tracked across their national customer base currently exceed the 20 percent annualized leak rate threshold. Those systems, under the new federal rules, are legally required to have a technician perform manual, in-person leak inspections every quarter until they are brought back below the threshold. This is not a rare occurrence—it’s a systemic condition in the industry. And that 25 percent figure reflects companies actively using refrigerant tracking software; for operators without such tools, it’s reasonable to assume the proportion is even higher.

Over a multi-year horizon, the exposure is even greater. If 25% of systems tip into the “high leak rate” category each year (with some repeat offenders), then statistically, 76 percent of systems will trigger quarterly inspection requirements at least once over a five-year period. That means most large grocery portfolios should conservatively budget for quarterly inspection mandates at nearly all of their stores.

 

If 25% of stores require leak inspections each year, 76% of stores will require a leak inspection over 5 years

 

25% of stores per year

 

= 76% of stores over 5 years

 
 

When you combine the relatively high percentage of systems likely to cross the 20 percent leak threshold, the recurring nature of quarterly inspections once triggered, and the severity of the penalties for even minor documentation lapses, it becomes clear why the AIM Act’s requirements can have such a large financial footprint—even in states without their own refrigerant management programs.

 

 

What happens if I complete a leak inspection 1 day late?

The stakes for missing a single inspection are high. Documentation is a critical part of compliance, and under the AIM Act, failing to complete a required leak inspection—or failing to log it properly—turns into a new violation for every day the inspection is overdue. Civil penalties can reach $57,000 per day, per violation (Federal Register; EPA fact sheet). The rule doesn’t distinguish between a missed deadline by a month and a missed deadline by a single day—the liability is the same.

These documentation risks aren’t theoretical. As noted in Axiom’s July 30, 2025 article, “The Automatic Leak Detection Compliance Paradox,” manual leak inspection programs can fail to achieve compliance due to human error in reporting and record-keeping. In one recent case, a large retail grocer with a multi-state footprint suffered hundreds of thousands of dollars in fines after regulators determined that gaps in their inspection documentation rendered them non-compliant—even though inspections had been performed in most cases. The lesson: in the eyes of regulators, “if it’s not documented, it didn’t happen.”

 

 

I already have sensor-based (direct) ALD systems - do I still need to complete manual leak inspections?

After spending $20,000 to $40,000 per store to install multi-channel refrigerant leak sensors, many facilities leaders are shocked to learn that installing direct ALD gas sensors doesn’t exempt them from mandated monthly or quarterly manual leak inspections. Why?

Because gas sensors can’t cover everything. According to the text of the rule, “The Agency agrees that direct ALD systems are not effective for portions of an appliance that are outside of an enclosed space.”

According to the EPA, direct ALD systems don’t adequately cover:

  • Rooftop condensers

  • Underground lines

  • Overhead or hard-to-access piping

  • Non-enclosed areas like sales floors

The EPA is very clear: unless you are using an indirect “whole system” ALD solution that monitors 100% of the refrigerant system, manual leak inspections are still required. According to the text of the rule, “An owner or operator is required to inspect all portions of a refrigerant-containing appliance not monitored by an ALD system.” That means if you’re relying on point sensors or even multi-channel PPM gas sniffers, you’re likely still out of compliance and will need to pay for inspections on top of the ALD system.

Bottom line: you still need to budget for manual leak inspections each year even if you have direct (sensor-based) leak detectors installed in your stores.

 

 

Can whole-system (indirect) ALD be used across all sites, or are there technical constraints?

One of the most common questions from multi-site operators is whether a single whole-system Automatic Leak Detection (ALD) solution can be deployed fleet-wide—or whether technical constraints limit it to only a subset of stores. The answer depends heavily on both the technology itself and the existing refrigeration infrastructure at each site.

Whole-system (indirect) ALD, as defined by the EPA, works by monitoring refrigeration system operating parameters—such as suction pressure, discharge pressure, and temperature—along with refrigerant inventory levels to detect changes that indicate a leak. This approach differs from “direct” sensor-based systems (such as fixed sniffers or handheld detectors), which monitor air samples for the presence of refrigerant gas but do not generally meet federal or state criteria for replacing manual leak inspections (EPA HFC Management Rule, 2024).

Before committing to a provider, it’s critical to confirm whether their solution can operate effectively across the variety of equipment configurations in your portfolio. The following due diligence questions can prevent costly surprises:

  • ✅ Is it truly a “whole-system” indirect ALD solution, as recognized by the EPA and state agencies? Many vendors market “leak detection” capabilities, but if the system is purely sensor-based, it will not exempt you from manual leak inspection requirements under the AIM Act or state-level rules in CA, NY, WA, and others.

  • ✅ Does the solution work at sites without analog receiver level sensors (e.g., Hansen probes)? Some indirect ALD systems rely on these sensors to measure refrigerant charge levels; sites without them may require additional installation work or be ineligible for deployment.

  • ✅ Are any other specific sensors or hardware required on-site? Ask whether the system can integrate with your existing refrigeration control architecture or if it requires installing proprietary components—each extra hardware requirement adds cost, complexity, and potential downtime during deployment.

  • ✅ What was the historical performance in the field? Request independent, third-party-verified data for the percentage of confirmed leaks detected and the average number of false positives per store over at least the past 12 months. A low false-positive rate is especially important to avoid unnecessary dispatches and compliance “noise.”

  • ✅ Does the provider generate all required documentation for EPA and state compliance? Regulations such as California’s Refrigerant Management Program (CARB RMP) and New York’s Part 494 mandate specific inspection and repair records. If your ALD provider cannot produce these automatically, you will still need to maintain separate manual records, undermining the compliance efficiency you were aiming for.

The bottom line: even if a solution works perfectly in a lab or on a subset of sites, that doesn’t guarantee it will scale cost-effectively across an entire fleet. The smartest approach is to standardize on an ALD platform only after verifying technical compatibility, regulatory recognition, and proven in-field performance across a variety of store formats and refrigeration system designs. This ensures your investment delivers both compliance coverage and operational ROI everywhere—not just at your “ideal” sites.

 

 

Beyond compliance savings: how whole-system ALD strengthens the bottom line

While eliminating the recurring expense of manual leak inspections is a clear financial win, whole-system (indirect) Automatic Leak Detection delivers a much broader set of benefits—many of which have a greater cumulative impact on profitability, operational stability, and brand resilience over time:

  • Faster and more reliable detection of leaks – Manual inspections provide only a snapshot in time, which means leaks can persist undetected for up to 90 days between inspections. During that time, refrigerant loss continues, efficiency declines, and the risk of equipment damage rises. Whole-system ALD monitors around the clock, identifying leaks in their earliest stages and enabling repairs before they escalate into expensive failures.

  • Lower emergency repair and refrigerant replacement costs – Detecting leaks early reduces the scale of repairs and minimizes the amount of refrigerant lost, which is especially important as HFC prices continue to rise under the phasedown schedule. Over time, the savings from fewer large-scale repairs and smaller refrigerant purchases compound significantly.

  • Higher quality and consistency of leak monitoring – Even the best technicians can have off days, whether due to fatigue, time pressures, or competing emergencies. Manual inspections vary in thoroughness from one visit to the next. By contrast, ALD applies the same continuous, data-driven standard at every site, eliminating variability and ensuring that detection quality is not dependent on human factors.

  • Reduced business disruption from unexpected cooling outages – Refrigeration failures caused by undetected leaks can force product loss, emergency service calls, and temporary store closures. These events not only impact the P&L but also erode customer trust. ALD’s continuous monitoring helps prevent these outages by catching problems early, enabling planned, lower-cost repairs.

  • Lower likelihood of triggering costly enforcement actions – By reducing the number of appliances with annual leak rates above 20%, retailers greatly diminish the chance of falling under heightened EPA or state regulatory scrutiny. Facilities with consistently low leak rates avoid the reporting burdens, frequent inspections, and potential penalties—up to $57,000 per day—that can come with noncompliance under the AIM Act and state-level refrigerant management rules.

  • Automated, compliance-ready documentation – Manual inspections create a documentation burden that is both time-consuming and error-prone. Every inspection and repair must be logged correctly to stand up to regulatory review. Whole-system ALD automatically records and stores all leak detection events, repair timelines, and verification steps, producing audit-ready records without the administrative overhead.

  • Significant sustainability gains – Refrigerant leaks are often the single largest source of Scope 1 greenhouse gas emissions for grocery and cold storage operators. By lowering leak rates, ALD can deliver faster and more substantial emissions reductions than many other capital-intensive sustainability projects, helping retailers meet ESG commitments and improve public sustainability reporting.

Bottom line: Whole-system ALD isn’t just about replacing manual leak inspections—it’s about building a more reliable, efficient, and sustainable refrigeration operation. The compliance savings are immediate, but the long-term financial, operational, and reputational returns are even more valuable.

 

 

The coming ALD mandates: why waiting will cost you

While the business case for ALD is compelling today (by eliminating manual leak inspections alone), it’s also worth remembering that for many retailers, installing ALD will soon cease to be optional. Under the EPA’s final HFC management rule, any new commercial refrigeration system with more than 1,500 pounds of HFC refrigerant installed after January 1, 2026 must include an Automatic Leak Detection system that meets federal performance and documentation standards.

The mandate doesn’t stop at new systems. Existing systems installed after January 1, 2017 with refrigerant charges above 1,500 pounds must also be retrofitted with ALD by January 1, 2027 (Federal Register, Oct. 11, 2024). According to the EPA’s own estimates, this retrofit requirement applies to roughly 25,000 existing appliances nationwide—a wave of compliance demand that will likely strain installation capacity, drive up hardware and labor costs, and create competition for qualified vendors in late 2026.

For operators, this means that delaying ALD deployment carries real financial and operational risks. Rolling out ALD now allows you to:

  • Spread costs over multiple fiscal periods rather than absorbing them in one budget year.

  • Avoid last-minute installation bottlenecks that could delay compliance and risk penalties.
    Capture operational and sustainability benefits immediately, instead of deferring savings for one or two more years.

Bottom line: The clock is already ticking. Whether you move now to capture ROI and reduce risk, or wait until ALD is mandatory and rush to comply alongside thousands of other operators, the decision is yours—but the costs of procrastination could be substantial. Early adoption isn’t just a compliance strategy; it’s a competitive advantage.

 
 
Amrit Robbins