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HVAC INTELLIGENCE eNEWSLETTER
Determining Customer Interest in an Air Upgrade by David Richardson Showing airflow test results can be convincing motivators. https://contractingbusiness.com/55235205
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The ‘right way’ is the National Comfort Institute’s HighPerformance HVAC™
If you visit Facebook often, you’ll see that anytime someone asks a question about a technical problem (cars, appliances, etc.), there will be many suggestions offered by viewers. But in all trades, there’s a right way and a wrong way. That’s ancient, but true advice.
This advice also applies to the science of home comfort, and no organization is promoting the right way of doing things in HVAC more often and with more practical advice than National Comfort Institute.
NCI held its 21st Summit September 10-13 in Asheville, NC. Educational sessions by a dozen presenters focused on the benefits and methodologies associated with High-Performance HVAC™.
A panel discussion with five High-Performance contractors was one of the highlights of the Summit. These enlightened contractors shared how they got started as NCI High-Performance HVAC contractors, and the difference it has made in the success of their businesses and company cultures.
Nancy McKeraghan, Canco Climate Care, Newmarket, Ontario: Nancy and her team adopted NCI best practices years ago, and found it difficult to explain the new approach to customers.
“As usual, Rob Falke came to the rescue, with his analogy comparing home performance diagnostics to taking someone’s blood pressure. The chart Rob had was wonderful. I wish he had invented that earlier; it would have been a lot easier because we did struggle with how to explain what we were doing without freaking them out.” The late Rob Falke co-founded NCI with CEO Dominick Guarino.
before has talked about,’” Mathias said. “You’re building rapport and trust with that customer right out of the gate. I use the analogy that we’re going to be speaking German in a Japanese town. The language I use, the simplified blood pressure analogy, nobody else has talked to them about that. And, when I ask to see the attic, they ask why, because nobody else has ever asked to see the attic; I know then that we got the job.”
Tom Hearn, Hearn Plumbing Heating & Air, Madison, Oh., advised those who are venturing into High-Performance contracting for the first time to be vulnerable and willing to adopt a different approach mentally and from the heart. “It’s also essential that the leader of the company level with employees that there will be zero tolerance for anything that’s less than standard. We’re going to make you elite. If you want to be less than elite, you have 20 other choices to be employed in the HVAC industry in our market,” Hearn said.
Dustin Cole, Cole Air, Lake Charles, La.: When first applying NCI methods, Cole said, “It’s okay to ask questions, to not be confident and still move forward. Don’t let your fears guide you,” Cole said. “You’re going to be doing things that are different and you will have a ton of questions and none of them are bad questions. You are surrounded by a great [NCI] community that only wants to see you succeed,” Cole said.
EDITORIAL
ADVISORY BOARD
TOM CASEY
Climate Partners
Griffin Service
MIKE CONLEY
Pioneer Heating & AC
VINCE DIFILIPPO
DiFilippo’s Service Co.
DOMINICK GUARINO
National Comfort Institute
LOUIS HOBAICA
Hobaica Services
MATT MICHEL
Author
BRIAN STACK
Stack Heating & Cooling
Ron Mathias, Accurate Heating & AC, Lompoc, Calif.: “When we started home performance testing, it made it easier for technicians to get leads. As soon as they started checking static pressure on everyjob, the duct replacement leads were flying in the door faster than we could respond to them. Those jobs were everywhere, because nobody wants to do duct work in my market, they just want to swap out boxes.”
In terms of communicating the NCI approach to customers, Mathias said he acknowledges to customers that these are different methods.
“I tell them, ‘I’m going to talk to you about some things today that nobody else that’s been here
Cole acknowledged that the new approaches will be time consuming. “You will look at your dispatch board and you’re full, but the technicians are going slower. Get past that. You will take more time because you will be solving problems and delivering results. Be patient with your team. Their average ticket will increase.”
Greg Wallace, Progressive Heating & Air, Newnan, Ga.: “We post on our website that we’re performance-based, and all of our salesmen and home solutions advisors have all the gadgets to show customers. We show them real information. Everybody in my company is trained. Everyone of my technicians, apprentices, installers and managers—if they have anything to do with going in to somebody’s home, they go through as many of these as I can get them into. It’s easy to do once you get started in this, you just have to be consistent.”
Independent Contractors Exchange—a select group of independent commercial contractors specializing in specializing in the service and installation of applied HVAC systems, including chillers, boilers, air systems, water systems, cooling towers and automation—convened its annual conference September 9-11 at the Westin Peachtree Plaza, Atlanta, GA.
This year’s event was hosted by Mallory & Evans, a group member based in Atlanta.
The mission of the ICE Group is to improve the people, companies and entire commercial chiller installation and service industry with technical support and training, sharing best practices and maintaining positive relationships with strategic industry partners.
Attendees heard from peers and sponsors on innovative chiller products and successful projects completed by member contracting businesses.
This year’s keynote speaker was Chris Fuller, author of Iditarod Leadership: Unleashing the Power of the Team and InSPIRED Leadership: Your Proven Path to Remarkable Results. Fuller’s goal as a presenter is to help organizations execute with excellence and create teams that deliver results and build winning cultures.
Chris Fuller: In any company, ‘What you permit, you promote. What you allow, you endorse.’
Fuller was the first speaker we’ve ever seen with experience in sailing, dog sled racing and mountain climbing. Each sport presents unique challenges and dangers, but to be successful in all requires the good old team approach. If we have lost the passion for our work that we once had, it could be due to leadership or to ourselves. Why have you lost the passion? Could it be your team needs to rethink processes? According to Fuller, reinvention is essential whenever a business achieves a 30-50 percent growth plateau. “We need to grow to the next level. This also applies to young leaders we put in charge of people, without ‘leveling them up’ to new responsibilities.” Do your young
leaders have the capabilities and ability to handle the stress that comes with the promotion? Does the entire company have a mission that’s worth the run, and do we have systems that enable us to rise above problems? Fuller queried.
With the ICE Group now in its tenth year, John Claybourn, ICE Group member and president of Oklahoma Chiller, provided a perspective on the group’s success as a contractor organization.
“Ten years ago, we had our inaugural meeting at Chillco in New Orleans. I don’t think any of us expected we would have the growth and success we have had, although they were high. It’s remarkable how far we’ve come. Since then, we’ve grown substantially, not just in numbers, but more importantly, in influence and purpose,” Claybourn said. “With that, we felt a need to create a vision statement. Don’t underestimate the power of vision and direction. The board is focused on that, so everybody knows where we’re going and understands what the ICE Group is all about.”
The new vision statement of the ICE Group is: Independent Contractor Exchange
seeks to be recognized as the elite group of independent mechanical service companies with expertise in applied chillers and other complex systems. This premier network of highly engaged companies is committed to sharing knowledge, the relentless pursuit of innovation, and ongoing development of the best people in the industry.
“We feel this vision is accurate, compelling and worthy of our efforts. It’s important that we know where we’re going and state that vision clearly,” Claybourn said.
R. Scott Tracy introduced new ICE Group members:
• Applied Industrial Systems
• Shambaugh Services/EMCOR
• EMCOR Services MESA Energy Northwest Penn.
• Jordan Steiner, Consulting Engineer.
Tracy said the ICE Group receives many applications in a year and accepts eight to 10 percent of those. “We do our best to find people who can give back,” he said.
During a presentation on project management, attendees used the Vevox app to answer a series of questions related to project management: What defines a project? What causes a project to underperform? How can we better control the predictability of project performance?
Reasons for project failure or underperforming projects were discussed:
• the salesperson
• unclear scope or project plan
• bad estimate or bad upfront risk assessment
• poor project management
• cost escalations (after proposing / before authorization
• calling a project “complete” prematurely.
John Claybourn provided an update on ICE Group growth and shared the new mission statement.
In the group exercise guided by Don Newell, PE/CEM/LEED AP and senior vice president of operations and innovations for EMCOR Building Services, 70 percent of ICE Group participants attributed project failure to an unclear scope or project plan and a bad estimate or risk assessment. Fifty-eight percent attributed project failure to poor project management.
Additionally, Newell said, projects can “go south” due to pursuit of “bad” opportunities that you’re unlikely (or shouldn’t want) to win; and failure to identify payment concerns, such as slowpayers or no-payers. Other causes can be related to estimating issues, ineffective transition from sales to operations and failure to monitor and adjust during project execution.
An evening networking event was held at the Chick Fil A NCAA College Football Hall of Fame.
High-Performance HVAC™ contractors took center stage in Asheville, NC, September 10 -16 as National Comfort Institute’s (NCI) 21st Annual Summit got underway. Once again, Summit was open to the entire HVAC Industry to spotlight like-minded people willing to share their high-performance experiences with peers.
The NCI Summit welcomes contractors who have put aside “swapping boxes” in favor of solving home comfort problems with testing and measuring according to NCI proven best practices, based largely on the exact science of airflow.
This year’s theme was “OUTPERFORM!”
All workshops and sessions focused on helping contractors outperform competitors in general and outperform attendee company sales and profits.
The 2024 NCI Summit broke the all-time attendance record for the event, with more than 200 contractors, preferred partners, and other industry luminaries gathered to network and learn. It also broke the record for the most first-time attendees. It was the first Summit to host HVAC industry influencers who conducted live streaming and podcasting directly from the conference headquarters in the Asheville Crowne Plaza hotel.
Eleven main sessions were presented in rotation during the three-day event. Among those topics were:
• Take Your Testing Accuracy to the Next Level, by NCI Instructor Mark Hunt
• How to Build a High-Performance Culture in Your HVAC Business, by
John Boylan, Lakeside Service
• The Sweet Spot, Where Building Science and HVAC Intersect, by NCI Instructor Rob Minnick
• The Air Updgrade Cure, by NCI VP of Training David Richardson
• High Performance HVAC Renovations from Start to Finish, by Dustin Cole, Cole Air, Inc.
• Customer Communication: Drop the Technospeak, by Chuck Worley, Owner of Worley Home Services.
A total of four hours were devoted to exhibits and networking. Partner educational sessions featured Daikin; measureQuick; RectorSeal/DustFree; TruTech Tools; and The Energy Conservatory.
One of National Comfort Institute’s mottos is, “If you don’t measure, you’re just guessing!” With that in mind, National Comfort Institute Dominick Guarino spoke on “The State of High-Performance.” Using an analogy based on the science fiction film, “The Matrix,” Guarino contrasted contractors
Much of the value in attending
found in the idea-sharing
who “swap boxes” without testing a home’s existing airflow characteristics (“blue pill” contractors) with those who use a variety of airflow measurement tools and proven NCI methods (“red pill” contractors) to ensure a home HVAC installation is performed correctly.
“‘Blue pill’ contractors know how to service and maintain equipment and swap boxes when they breakdown or age out. Unfortunately, those represent over 90 percent of our industry,” Guarino said.
“When we start to measure, test and see what’s going on in that home, it’s not looking quite as good. Pressures are off, airflows are off, combustion analysis shows the furnace is not doing what it’s supposed to be doing. There are so many great measurements we could take,” he continued.
“When we look at pressures and airflows and measure temperatures and more, we often learn that a home isn’t as comfortable and safe as it seems. Testing gives us ‘xray vision’ so we can see what’s under the skin, and know what to do to make homes healthier, safer and more energy efficient.
“The way I see it, those that made the decision to start testing and measuring actual performance have taken the ‘red pill’ and can’t ‘unsee’ the reality between the veneer that ‘everything’s fine.’”
The 2025 NCI Summit will be held in Austin, Texas, September 9-12.
WASHINGTON—The U.S. Environmental Protection Agency announced on September 23 a final rule to establish a new program to better manage, recycle, and reuse climate-damaging hydrofluorocarbons (HFCs) under the American Innovation and Manufacturing (AIM) Act. The final rule includes provisions that will reduce wasteful leaks from large refrigeration and air conditioning equipment and will support American leadership and innovation in the development of clean solutions to tackle heat-trapping emissions.
This final rule includes formation of the Emissions Reduction and Reclamation (ER&R) program, which will address the third part of the bipartisan AIM Act. By reducing leaks and promoting innovative reuse of existing HFCs, this final rule will help the nation achieve an 85 percent
HFC phasedown by 2036 while boosting American leadership and competitiveness EPA believes.
The ER&R program will help minimize releases of HFCs from equipment by addressing leaks across the lifespan of refrigerant-containing equipment, such as air conditioners and refrigeration systems, while also maximizing the reuse
of existing HFCs—supporting a growing American industry for recovering HFCs from existing equipment and reclaiming them to be used again, all while reducing lifecycle emissions.
The final ER&R program includes requirements for repairing leaking equipment, the installation and use of automatic leak detection systems on large
The EC-1U-DV brings the performance of our EC-1-DV Series of mini-split condensate pump to a slim undermount unit that installs easily and neatly underneath equipment. Built for reliable and quiet operation, the automatic condensate removal system works continuously to remove water from any ductless mini-split air conditioner evaporative coil when gravity-feed drainage is not possible or practical.
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refrigeration systems, using reclaimed HFCs to service certain existing equipment, minimizing HFC releases from fire suppression equipment, fire suppression technician training, and removal of HFCs from disposable cylinders before they are discarded. The regulations also establish a standard that limits the amount of new, or virgin, HFCs that can be contained in reclaimed HFC refrigerants. Additionally, the EPA is establishing alternative standards under the Resource Conservation and Recovery Act for ignitable spent refrigerants when recycled for reuse.
Also in September, the EPA published another action regarding HFCs. The proposed rulemaking concerns the eligibility of the six applications listed in the AIM Act to continue to receive priority access to HFC allowances beyond 2025, and, among other things, includes targeted revisions to the methodology for allocating these
application-specific allowances.
The AIM Act authorizes EPA to address HFCs in three main ways, and EPA has now issued final rules to implement all three of these pillars: phasing down their production and consumption through an allowance allocation program; facilitating the transition to next-generation technologies through sector-based restrictions; and promulgating regulations to maximize reclaiming and minimize releases of HFCs from equipment and ensuring the safety of technicians and consumers. See https:// www.contractingbusiness.com/55142286/.
Air Conditioning Contractors of America issued a commentary following the issuing of the Environmental Protection Agency’s
Final Rule related to HFC refrigerant management: “ACCA was a tenacious presence on EPA’s doorstep as it lobbied for common sense while still approving the purpose of some earlier provisions. Thanks to ACCA’s persistent advocacy efforts, the Environmental Protection Agency’s latest rule under the AIM Act will allow more flexibility for contractors. There’s no doubt that the AIM Act and its regulations to phase down hydrofluorocarbons (HFCs) will impose unwanted costs and regulatory burdens on contractors, but we are pleased that EPA’s final rule on HFC management includes several significant changes that reflect our members’ needs: 1. No mandate for reclaimed HFCs in initial system charges. 2. Flexible return program for disposable refrigerant cylinders. 3. No QR code tracking system.”
Find the ACCA HFC Final Rule Fact Sheet at bit.ly/ACCAfinalrulefactsheet.
Take the guesswork out of configuration and diagnostics for hundreds of service calls with the innovative White-Rodgers
Take the guesswork out of configuration and diagnostics for hundreds of service calls with the innovative White-Rodgers
Connect app and universal heating controls. No more fiddling with dipswitches, counting flashing LEDs or looking up fault codes. White-Rodgers Connect is preloaded with OEM default settings to save you time on installation. With more cross references than any other supplier, you can carry less and replace more.
Connect app and universal heating controls. No more fiddling with dipswitches, counting flashing LEDs or looking up fault codes. White-Rodgers Connect is preloaded with OEM default settings to save you time on installation. With more cross references than any other supplier, you can carry less and replace more.
Configure | Diagnose | Troubleshoot from your smartphone.
Configure | Diagnose | Troubleshoot from your smartphone.
Sources report a Bryant humidifier can “moisturize” dry, heated winter air, making a home feel more comfortable. Properly humidified air can help relieve the discomfort of dry nasal passages, itchy skin, and static shocks. A comfortably humidified home can help save energy, as homeowners are less likely to turn up the heat, potentially saving heating costs.
Bryant’s HUMCRLFP Preferred™ Large Fan-Powered (LFP) Humidifier with up to an 18-gallon water vapor output supports a large home. With an expanded aluminum evaporator pad, Bryant’s LFP humidifier inches measure 10.25 x 16 x 18 and comes with a 5-year limited warranty out of the box or 10-year limited warranty upon registration. bryant.com
The Bryant® Preferred series dehumidifier is available in two sizes for either a whole-home solution or just to address a humid basement, so customers will have the dehumidification that’s just right for their needs.
Both sizes work quietly to wring out humidity from the air to save on utilities and achieve comfort. They’re designed to be configurable with an existing system in a multitude of ways or operate independently away from the system if space is a problem. The Bryant Preferred™ whole-home dehumidifier removes up to 100 pints/day of moisture through a MERV 8 filtration system and is ENERGY STAR ® certified. bryant.com
Sources say a Carrier humidifier can “moisturize” dry, heated winter air, making customers’ homes feel more comfortable. Properly humidified air can help relieve the discomfort of dry nasal passages, itchy skin, and static shocks. A comfortably humidified home can help save energy. Because homeowners are less likely to turn up the heat, they could potentially save money on heating costs. With five distinctly different models, there’s a Carrier humidifier that is just right for a home.
output supports 4,200 square feet. With an expanded aluminum evaporator pad, Carrier’s LFP humidifier measures at 10.3 x 15.9 x 18 and comes with a 5-year limited warranty out of the box or 10-year limited warranty upon registration. carrier.com
The Carrier® Performance series dehumidifier is available in two sizes so regardless if customer needs a whole-home solution or just has a humid basement, the HVAC contractor will have dehumidification that’s just right for their needs. Both sizes work quietly to wring out humidity from the air so they can save on utilities and be comfortable. And, they’re designed to be configurable with an existing system in a multitude of ways or operate independently away from the system if space is a challenge. The Carrier Performance™ whole-home dehumidifier removes up to 100 pints/day of moisture through a MERV 8 filtration system and is ENERGY STAR ® certified. carrier.com
Carrier’s HUMCRLFP1518-A12 Performance™ Large FanPowered (LFP) Humidifier with up to an 18-gallon water vapor
The Condair DL hybrid humidifier is based exclusively on the advantages of the two humidification principles of atomization and evaporation. Sources say this results in the sustainable resolution of key problems which can emerge when these technologies are used individually. The humidification system is therefore the first choice in terms of hygiene, energy efficiency and cost-effectiveness. The humidifying water is atomized by stainless steel atomizing nozzles at low pressure. The atomizing
Cat Footwear has launched its chunkiest workboot yet, the Invader Max. Invader Max blends the power of an earthmover with the agility of a sneaker, making it great for long days. The chunky lug outsole, modeled after Caterpillar machinery, makes this boot stand out in terms of style and capabilities. The Invader Max Features:
• Composite toe
• Fully waterproof outer
• EVA foam midsole
• Unparalleled traction and Slip-Resistant outsole. Tested and approved by Contracting Business catfootwear.com
nozzles have an adjustable spray output and are optimally distributed over the entire cross-section of the device. A high evaporation efficiency and a uniform humidity distribution are achieved by this layout. The evaporator unit made of premium ceramic is placed at the end of the humidification distance. It captures the humidifying water and ensures the best possible reevaporation. The ceramic plates thus allow the most effective utilization of the high-grade humidifying water. At the same time, they prevent water accumulation in downstream components. Behind the Condair DL humidifier, there is aerosol-free and hygienically humidified breathable air. Condair.com
GeneralAire ’s fan-assist evaporative humidifier Model 4400A is for residential humidification. In today’s humidifier installation and maintenance environment, where high efficiency furnaces and heat pump technologies deliver significantly lower
humidity transferring plenum temperatures, sources say the GeneralAire 4400A is a low-profile, easy-to-install fan-assist evaporative humidifier. Generalfilters.com
The Smart Fog ES100 commercial humidifier is designed to provide comprehensive benefits, seamlessly combining low maintenance, energy efficiency, uniformity and a non-wetting system. Its precision in delivering self-evaporating droplets ensures a consistent and stable humidity level, sources report. This precision safeguards equipment and minimizes health risks associated with erratic humidity. Its enery-efficient design aligns with green initiatives and provides notable economic savings. Our self-evaporative systems keep fluctuations tight—strictly between +/- 2%—to mitigate risks and maximize outcomes. Smartfog.com
The IER Super Heavy series steam humidifier from steamOvap Technologies is an extension of the company’s IER electric steam humidifier range. Easy to install, with a thermally insulated cylinder and patented auto-adaptive water dilution algorithm to make it sustainable, energy and water efficient.A touchscreen user interface is intuitive and offers connectivity (ethernet, WiFi, Modbus and BACnet). steamovap.com
From Fral: Smart Wall is a sleek Italian-designed recess or service-mounted dehumidifier. It can be installed into areas where appearance is important, such as townhomes, condominiums, apartments, homes, offices or basically any interior space where excel humidity needs to be controlled. fral-usa.com
The Opti-Dry 7 Series from WaterFurnace International combines an advanced heating and cooling system with an integrated dehumidification system to create the new standard for comfort.
The 7 Series with OptiDry replaces inefficient systems with a solution that’s easier to install and more aesthetically pleasing, sources report. Waterfurnace.com
The Regal Rexnord Genteq ® Evergreen® OM motor (stock #6303S) is a universal replacement motor designed to replace PSC motors. Utilizing ECM technology means there is no capacitor required, and the new motor installs and connects just like the PSC motor it is designed to replace. One motor can now be used to replace millions of PSC condensor fan motors. Sources report one Evergreen OM motor replaces millions of permanent split capacitor (PSC) motors in outdoor fan applications in air conditioning and heat pump HVAC systems. The Evergreen OM motor will enable HVAC techicians to increase first call completions, carry a reduced truck
inventory. This motor carries a two-year warranty from date of installation. This warranty shall expire twenty-four (24) months from the date of installation or thirty (30) months from date of manufacture of the Product, whichever occurs first. regalrexnord.com
Yaskawa America ’s HV600 variable frequency drive is designed for use in HVAC building automation applications that require reliable system control. The HV600 is available in several enclosure configurations. Each HV600 comes with HVAC application-specific software presets, a hands-off-auto LCD keypad and a high-visibility Status Ring for quick visual indication of drive status and a real-time clock for system accuracy. yaskawa.com
WMT is the next generation of Daikin Applied ’s Magnitude watercooled chillers. The WMT offers a magnetic bearing,
two stage centrifugal compressor-motor, using ultra-low GWP R-1233zd(E) refrigerant. WMT’s design ensures maintenance is minimal by eliminating oil and, thus, lubrication and fraction with only one main moving component. daikinapplied.com
Mitsubishi Electric Trane HVAC US has introduced the s-MEXT indoor unit, a computer room air conditioning (CRAC) unit for IT cooling applications. Uses include small-to-mediumsized data rooms, cell phone and cable TV/telephone/Internet provider relay stations, medical imaging equipment cooling and critical cooling infrastructure applications, laboratories, archives and libraries.
s-MEXT is designed to enhance protection of critical IT systems with precision temperature control. Models are available in either top or bottom air-discharge configurations, giving users flexibility to meet their specific project needs.
Two capacities, 22 KBTU/H and 40 KBTU/H, are available in two size cabinets and upflow or downflow configurations, both as a base model and with factory-installed accessories. s-MEXT features a single refrigeration circuit and total front accessibility for simplified maintenance. Up to 10 s-MEXT units can be LAN connected, each requiring its own PUY outdoor
unit. The electrically commutated (EC) plug fan provides airflow modulation at low noise levels. mitsubishicomfort.com
Greenheck air-source heat pumps now function effectively down to an outdoor ambient temperature of 0° Fahrenheit. The all-electric heat pumps transfer heat energy from the airstream in dedicated outdoor air systems (DOAS), and feature redesigned single-circuit refrigeration. They also benefit from improved controls strategies that optimize heating capability at ambient conditions as low as 0°F. In addition, DOAS units 20 tons and above with air-source heat pump technology retain the ability to leverage multiple compressors to produce additional heating capacity. The technological upgrades allow for more operating days in more climates, while still pairing well with supplemental or backup heat sources and energy recovery to maximize comfort and efficiency. bit.ly/GreenheckASHP
All product claims are made by the manufacturers.
WALLER, TX—Daikin Comfort Technologies North America, Inc. reported on September 25 that it had established business relationships with the M&A Supply HVAC dealership. On September 30, Daikin announced it is combining three additional distributorships to form Daikin Comfort Technologies Northeast, Inc.: ABCO HVAC/R Supply + Solutions; Universal Supply Group; and Robinson Supply Co.; to be headquarted in Long Island City, NY.
M&A Supply operates 18 stores in Tennessee, Arkansas and Alabama. It will provide Daikin residential and light commercial brands and product lines across a broad, six-state region, including Tennessee, Alabama, northern Mississippi, Western North Carolina, south-western Georgia and the Florida Panhandle. This new distributor relationship will represent products from Daikin Unitary, Daikin Ductless, Daikin Light Commercial and Goodman Unitary. Additionally, the new relationship with the 55-year-old, family-run wholesaler will include supporting the needs of the region’s Daikin Comfort Pro dealers.
Three generations of the same family have run the venerable, Nashville-based M&A Supply.
“We are thrilled to represent Daikin and excited to provide our customers with their residential and light commercial HVAC products, innovative inverter technology and advanced indoor
NIBCO INC. announced the promotions of Brian Jaebker to chief financial officer and Todd Nowicki to senior vice president, finance.
Jaebker is responsible for accounting, financial planning and analysis, treasury, tax and investor relations. Nowicki is responsible for the pricing team, strategic initiatives and long-range planning.
Engineering Company, Inc. announced the hiring of Eric Ruggles as Director of Engineering, and the promotion of Matt Ingold to National Sales Manager.
Ruggles is responsible for driving product strategy and development, as well as contributing to the marketing and business strategy for the YELLOW JACKET HVACR Division. Matt Ingold joined Ritchie Engineering Company in 2018 as the Regional Sales Manager for the Eastern Region. He will continue to manage the Eastern region along with the addition of several national accounts and buying groups.
comfort solutions,” said Cory Anderson, President of M&A Supply and the grandson of co-founder Eddie Anderson.
“Both our companies are customer-focused, which for us is a rule we live by. Our mission is simple: to operate with integrity, remember that our employees are our greatest asset, and focus completely on the success of our customers.”
The collaboration represents a significant step forward for both organizations, explained Inoue. “We’re excited about working together to expand our reach, while providing innovative, energyefficient and reliable heating, ventilation and air conditioning solutions to our customers,” he said.
Daikin Comfort Technologies Northeast, Inc. (Daikin Northeast). Daikin Northeast will unify ABCO HVAC/R Supply + Solutions, Universal Supply Group, and Robinson Supply Co. into one cohesive organization.
Sources report the formation of a unified team of regional distributors is a pivotal step in Daikin’s mission to further strengthen its HVACR product and solutions leadership in the Northeast and also reflects Daikin’s commitment to become the number one HVACR product and solutions provider in North America.
Daikin Northeast will include 39 branch locations in New York, New Jersey, Pennsylvania, Delaware, Massachusetts, Rhode Island and Connecticut. Daikin Northeast will offer customers Daikin, Amana brand and Goodman equipment, controls and parts as well as refrigeration, plumbing and hydronics equipment, supplies and accessories from leading manufacturers.
In other company news, sources for Daikin reported on October 9 that Daikin had advanced to the final stage in the U.S. Department of Energy’s Residential Cold Climate Heat Pump Challenge. This milestone follows the successful completion of multiple field tests, which sources said underscores Daikin’s commitment to product innovation in energy-efficient electric heating solutions. Read about this milestone online, at contractingbusiness.com/55234287
Oxbox, makers of affordable, durable residential heating, ventilation and air conditioning systems that are endorsed by Trane®, wanted to help consumers breathe a little easier during October (which was Financial Planning Month) and in the coming months. Oxbox offers a consumer financing option in partnership with Wells Fargo, to help alleviate financial
planning stresses. Sources said this financing option benefited consumers to make it easier for them to proceed with financing, but also provides advantages to contractors:
• The financing program has a high approval and close rate, which in turn allows contactors to sell more product
• Improve dcontractor cash flow
• Improved contractor profitability
• Separates participating contactors from competitors.
The Oxbox & Wells Fargo financing tools are available as an “at home” credit application link, as well as a credit connect tool, promising a fast and easy way to complete the entire credit process at the kitchen table.
By Kevin Conway
When it came time to upgrade the aging HVAC system at the two-story Edward R. Roybal Comprehensive Health Center in Los Angeles, California, South Coast Facility Services (SCFS), a full-service mechanical, electrical and plumbing contractor, was entrusted with the responsibility. To guarantee a smooth and timely execution on the active medical campus, SCFS partnered with Victaulic to streamline the entire process, leveraging preconstruction strategies and using grooved pipe-joining solutions to achieve the owner’s goals.
To ensure services wouldn’t be disrupted as work began, SCFS needed to keep at least one of the building’s two rooftop chillers online at all times as well as set up a temporary chiller system. To minimize the impact of the temporary chiller system on the project’s bottom line, SCFS needed to compress the project timeline as much as possible. Grooved joints boast quicker installation times compared to other pipe-joining methods, a driving factor in SCFS’s decision to use a grooved system on Roybal’s central plant piping. Spatial constraints inside the small mechanical room also influenced the contractor’s design approach.
“We spent a lot of time trying to figure out how we were going to keep chilled water going into the building,” said Stephen Cappadona, superintendent for piping and plumbing at SCFS. “This is also an older facility, and they didn’t have the room’s schematics on record anymore. We had to really pay attention to how we were going to run pipes around the existing electrical systems while leaving enough room for the new equipment.”
Victaulic’s VDC team coordinated early deliveries of all grooved products—headers, pump drops, couplings, fittings and valves—to SCFS’s fabrication shop. Each delivery included corresponding shop drawings and a full bill of materials, allowing the shop to cut and prepare pipe to length as quickly as possible and minimize rework in the field.
captured the existing conditions inside the mechanical room.
The Victaulic VDC team used the information to build a robust 3D model of the space, identifying opportunities to downsize piping and optimize placements.
Medical centers rarely have expansive laydown yards for construction workers to stage materials. To minimize the impact on daily operations and maximize efficiency, SCFS planned its scope of work around two major shutdowns during which they intended to use cranes to lift all the project’s materials to the center’s second-floor rooftop. Victaulic’s VDC team coordinated early deliveries of all grooved products—headers, pump drops, couplings, fittings and valves—to SCFS’s fabrication shop. Each delivery included corresponding shop drawings and a full bill of materials, allowing the shop to cut and prepare pipe to length as quickly as possible and minimize field rework.
Although Roybal’s upgraded system was originally specified as a welded system, SCFS’s project engineer was sold on switching to a grooved system after reviewing Victaulic’s comprehensive submittals and understanding the time savings that grooved pipejoining solutions could offer from project inception to completion.
SCFS worked with Victaulic’s Virtual Design & Construction (VDC) team to perform a laser scan that
“We showed that we could speed this process up,” Cappadona said. “This scope would have normally taken a full crew and more than a month of welding to complete. With Victaulic, it only took three guys and a few weeks to install. We had a roadmap for exactly what components went where, and everyone was impressed with how quickly everything was assembled.”
SCFS installed Victaulic headers and vibration isolation pump drops in the mechanical room, which helped reduce the number of field joints. The modular equipment enabled SCFS to include the valves on the system, which will yield long-term energy savings and diagnostics capabilities for the end-user.
Edited for space. Find entire article online, at contractingbusiness.com/5237019.
Kevin Conway is a Territory Sales Manager for Victaulic, a leading global producer of mechanical pipe-joining, flow control and fire protection solutions for the most complex piping applications.
My grandfather started an HVAC business way back in 1956.
As a kid, I remember asking him how he sold so many air conditioning systems. He said, “there are three secrets to selling ACs… heat, heat, and more heat.” Based on his simple answer, I didn’t need to ask about his magic formula for selling lots of furnaces!
For most HVAC contractors, replacement sales fluctuate wildly based on weather extremes. When summer’s heat scorches the neighborhood, older condensing units fail and sales for replacement air conditioners soar. Furnaces almost sell themselves when Old Man Winter hits town.
This “wait for it to break” approach has its predictable outcomes that affect both the contractor and the homeowner, creating unnecessary stress for all concerned, as shown in this table.
But, what happens during the mildweather months, when temperatures stay moderate and homeowner urgency fades? It’s easy to fall into the trap of weatherdriven demand. But, for a business to thrive year-round, it needs a different approach.
Imagine your business with a wellbalanced installation schedule that relies on customer education, not the weather,
You don’t have to be at the mercy of extreme temperatures to keep your installation schedules full.
to drive more profitable sales in a stressfree way. It’s not a fantasy—it’s a matter of shifting your strategies to be proactive, rather than reactive.
You can break free from the difficult challenges of seasonal demand by keeping your HVAC business running smoothly and profitably, no matter the time of year.
2.
Expand your product and service offerings: Offer additional products like indoor air quality improvements or smart home solutions to diversify revenue streams and attract new customers year-round. Develop bundled packages that can be individually installed. That way, customers can enjoy
Low-bid pressure
Overloaded installation schedules
Employee burnout
Limited availability of equipment
Lower-quality installations
Missed profit opportunities
Here are seven strategies you can employ to enjoy a more predictable and profitable HVAC business in the coming years:
1. Adopt a long-term relationship mindset: Build long-term relationships with your customers to ensure repeat business, consistent referrals, and greater trust. When you treat customers like close friends, they’ll keep coming back and support you in return.
Uncomfortable living space
High unexpected expense
Limited product choices
Lower-quality system performance
More frequent repairs
Increased stress and inconvenience
a complete system renovation over time. Add affordable monthly payments to your lineup, too. Payment plans make it easier for homeowners to invest in bigger and better solutions today.
3.
Educate homeowners yearround: Most homeowners don’t know how old their HVAC equipment is or its expected service life. Providing ongoing education to
homeowners about HVAC system improvements, maintenance requirements, and energy efficiency gains keeps your business top-of-mind and encourages proactive upgrade requests.
4.
Promote proactive system upgrades: Regularly educate homeowners on the benefits of upgrading aging systems before they fail. This leads to more planned replacements, avoiding the seasonal rush, unexpected expense, and inconvenience. Share the benefits on your website, newsletters, and flyers that your service team can hand to customers with older equipment.
5. Create “off season” system upgrade incentives: Offer incentives for system upgrades during off-peak shoulder months to help balance your installation schedule and keep revenue flowing steadily. While financial discounts are attractive in some cases, consider offering greater peace of mind through extended warranties and maintenance agreements as incentives.
6
.
Maximize maintenance agreement customer relationships: Focus on building and maintaining “partner” relationships with homeowners through maintenance agreements, ensuring consistent revenue and opportunities for future upgrades. Your job is to get and keep customers. Maintenance agreements are the best way to build lasting value in your business.
7.
Leverage technology to streamline sales: Access to important information is easier than ever through the Internet. Use technology to simplify your customer education and sales processes to make it easier for customers to make their own best choice— which should include you and your company—to upgrade their home’s indoor comfort systems.
While weather will always play a role in the HVAC industry, smart contractors know they don’t have to be at the mercy of extreme temperatures to keep their installation schedules full.
By embracing long-term relationships, expanding your offerings, educating homeowners, promoting proactive replacements, offering off-season upgrade incentives, maximizing maintenance agreement relationships, and leveraging technology, you can create a stable, profitable business year-round.
The key is to be proactive, rather than reactive—because when you take control of your customer education and sales process, you take control of your future.
David Holt is the president of SilverBullet Price Page, Inc., a technology company dedicated to helping HVAC contractors simplify customer education and sales, driving improved results and profitability. With over 40 years of experience in the HVAC industry, David has developed several software solutions, pioneered innovative marketing strategies, provided business coaching, and led numerous seminars and training programs. Discover more about SilverBullet at www.SilverBullet.ac.
Know what makes your HVAC contracting business a valuable enterprise, so you can benchmark performance and properly plan for financing, a buyout or eventual exit.
Is your HVAC business looking to secure bank financing, pursue strategic growth through a merger or acquisition, or considering an exit? Whatever your current goal, understanding and enhancing your company’s value is essential for long-term success.
Following is a comprehensive look into the factors that drive value for both residential and commercial HVAC companies as well as many other service businesses, including plumbing, electrical, roofing, and general contracting companies. Knowing what makes your company valuable will not only improve daily operations but also enable you to benchmark your performance against industry standards, negotiate better terms for financing, and make informed decisions about a potential buyout or sale.
As a residential HVAC company, you operate in a dynamic market influenced by technological advancements, changing consumer preferences, and regional trends. By considering the three key factors listed below and how they affect the value of your business, you can start identifying ways to increase your company’s worth.
1. Market Demand and Growth Trends. Evolving consumer preferences and technological advancements—including smart thermostats, energy-efficient heat pumps, and integrated HVAC systems—have spurred significant growth recently in the
residential HVAC industry. As homeowners increasingly prioritize energy efficiency and smart home integration, HVAC companies that adopt cutting-edge solutions like these are better positioned for success. By offering maintenance plans and high-quality service along with these innovations, your company can capitalize on higher demand and charge premium prices.
Market dynamics such as seasonal fluctuations and geographic location also play critical roles in shaping demand for services, which in turn influences your company’s valuation. The demand for HVAC services tends to peak during summer and winter months due to temperature extremes. Furthermore, companies in regions that experience climate extremes or are facing rapid population growth (such as the Sunbelt) typically see higher valuations. As the chart below indicates, industry revenue is increasing even as energy usage has decreased due to the introduction of the Nest Learning Thermostat (the first major smart thermostat that could learn user habits and automatically adjust temperature settings) in 2011 and AI-driven HVAC management (which enhances predictive systems for temperature control) in 2018.
Business owners who explore and understand these trends can take advantage of them to enhance market position and their company’s overall value.
2. Revenue Streams. Diversifying revenue streams is crucial for the long-term stability and growth of residential HVAC
companies. By tapping into multiple sources of income, you can safeguard your business against market volatility and increase its overall value.
Service contracts are among the most valuable, reliable, and profitable sources of income for residential HVAC businesses. These contracts provide consistent cash flow and reflect strong customer loyalty, making the company more appealing to prospective buyers or investors. Furthermore, when you decide to sell your residential HVAC business, having a defined service department with auto-renewing service contracts can drive value to higher multiples.
Establishing contracts with new home builders at a healthy profit margin can generate significant revenue, not just through system installation but through service contract offerings for the new homeowners. This income stream can be seen as being less predictable, however, as it is closely tied to economic conditions and fluctuations in the construction market. The pie chart below shows that new construction installations make up the majority of revenue for residential HVAC businesses. While a concentration of this revenue at a low profit margin can devalue your business, using it as a step to growing service can increase profitability and improve the overall value of your residential HVAC business.
Your HVAC company can also expand its service offerings with related services such as electrical work, plumbing, or insulation. Homeowners value a one-stop shop so they can avoid juggling multiple providers. This diversification can help stabilize your revenue and enhance your business’s overall value by creating customer loyalty and mitigating the effects of seasonal demand changes.
3. Operational Efficiency. When you’re aiming to improve profitability and business value, maximizing operational efficiency is a must. Efficient operations drive financial performance and can help your HVAC company stand out in a competitive market.
Controlling job costs, delivering a high level of customer satisfaction, and completing jobs on schedule—and within budget—raises the likelihood of your success compared with competitors.
Some of the most valued—and valuable—HVAC businesses have implemented daily stand-ups with their team to set goals and reflect on overall performance in order to ensure success. As a business owner, you should monitor key performance metrics such as labor utilization, job completion times, customer satisfaction scores, and profitability per project to ensure continuous improvement.
Additionally, by investing in technician training, safety, and certifications, you can enhance your company’s service quality, reduce errors, and increase both technician loyalty and customer satisfaction—all of which will add value to your residential HVAC company.
Commercial HVAC companies operate in a different environment from residential firms, often dealing with larger-scale projects, more complex systems, and longer-term client relationships. The same three factors drive value in commercial HVAC businesses, although how they do so reflects these differences.
1. Market Demand and Growth Trends. Robust growth among commercial HVAC businesses is fueled by several key market trends, from infrastructure and technological upgrades to the push for sustainable solutions, that are shaping the future of the industry. Infrastructure improvements, the growing need for energy-efficient systems, and the modernization of older buildings are stimulating the demand for new or updated commercial HVAC systems (see chart below). Furthermore, the increasing focus on sustainable building practices is driving demand for advanced technologies, including HVAC controls that improve efficiency and provide building managers with data-driven solutions for their commercial buildings.
Meanwhile, as governments and private companies invest heavily in infrastructure, sectors such as healthcare, education, and public administration are expected to increase their demand for modern HVAC systems. Taking advantage of opportunities related to these large-scale projects can raise your company’s valuation, as long as you are smart about growth and remain focused on quality and profitability. Commercial HVAC businesses that serve a diverse range of industries can further benefit from greater stability and value. Diversifying across sectors helps mitigate the risks of economic downturns in specific industries, providing steady income from various sources while adding variety to your customer concentration.
Diversified revenue streams are crucial for long-term stability and growth of residential HVAC companies.
As sustainability becomes a greater priority for many businesses, HVAC companies that offer green solutions—such as energy-efficient retrofits or systems qualifying for Leadership in Energy and Environmental Design (LEED) certification—are in high demand. Helping your clients achieve energy savings and sustainability goals will position you to thrive in the evolving market.
2. Revenue Streams. A diversified revenue model is essential for the success of your commercial HVAC company, with several key streams contributing to financial stability and long-term growth. Long-term maintenance agreements, for one, are crucial for commercial HVAC businesses because they provide dependable, recurring revenue. These contracts also can make your company more attractive to buyers or investors seeking stable cash flow.
Does your commercial HVAC firm balance revenue between new construction projects and replacement or retrofit work? While new construction can be lucrative and, in fact, accounts for the majority of commercial HVAC revenue (see pie chart below), replacement and retrofit jobs often provide more consistent and predictable demand. What’s more, working directly with building owners is likely to result in higher margins for your company. Owner-direct contracts allow for greater control over project terms, timelines, and pricing, offering more flexibility than working under a general contractor.
3. Operational Efficiency. As a commercial HVAC company owner, you know that having defined operational strategies can significantly enhance efficiency, profitability, and overall business value. Monitoring specific metrics is equally essential to improving operational efficiency; so to ensure smooth operations and identify areas for improvement, be sure your company regularly tracks project completion times, cost overruns, equipment downtime, project profitability, and technician productivity.
Having your technicians obtain specialized certifications in fields such as medical gas installation and service or stainless steel piping can also boost your company’s value as you take on more complex, higher-margin projects and service offerings that lead to customer retention and recurring revenue. Other
technician certifications, such as Building Performance Institute (BPI) certification and LEED accreditation, can keep your technicians engaged while making your company the contractor of choice when building managers look to upgrade in line with clean energy initiatives. These qualifications and certifications also signal to potential buyers and investors that your company has the expertise required to handle specialized work and can flex into installing and servicing the latest building technologies and innovations.
The composition of your workforce, whether unionized or nonunion, also plays a role in both your company’s operational efficiency and costs, which in turn will impact the pool of investors and buyers interested in the business. A unionized workforce often is able to adjust to a changing workload and number of projects, and may offer various skill levels that can be strategically implemented based on customer or project needs. While unionized employees often require higher wages, they can bring specialization and training that can improve project quality and enhance client satisfaction, generating greater profitability for your company. Whether buyers and investors place a higher value on unionized or non-unionized companies depends on the circumstances and what the investors are looking for.
When considering how to increase the value of your HVAC company, whether your focus is commercial or residential, several key areas come into focus that are critical for operational success— and for showcasing your business’s worth to potential investors, buyers, or financial institutions.
A strong management team is the backbone of any business, and HVAC companies are no exception. Investors, buyers, and lenders look for companies that display competent leadership, clearly delineate roles and responsibilities, have dedicated employees, and evidence a well-structured administrative function. An efficient back office ensures smooth operations, proper handling of contracts, and effective customer management—all of which contribute to a positive company culture and thus to the overall value and success of the company.
Consider the following elements that affect the valuation of your company:
• Leadership Style. Effective leaders communicate effectively and have well-honed problem-solving and decisionmaking skills. They can inspire and motivate their teams while fostering a positive work environment.
• Culture. Having a strong company culture where goals are set and then celebrated when achieved goes a long way to supporting employee loyalty. HVAC technicians (and all tradespeople, for that matter) are in high demand because they are imperative to the growth and sustainability of your business. Having access to the tools they need, appropriate safety programs, and growth-focused compensation can help build employee satisfaction and loyalty.
• Industry Expertise. A management and support team with deep industry knowledge and experience can navigate
industry advancements and trends, anticipate challenges, and respond effectively to changing market conditions, delivering superior value for your company and ultimately your customers.
• Technology Adoption. Embracing technology in vital business areas such as finance and accounting, customer relationship management (CRM), project management, and field service management can improve your company’s efficiency, streamline operations, and enhance customer and employee satisfaction. Integrating these systems to produce meaningful key performance indicators (KPIs) can also drive value.
Any potential buyer or financier interested in your HVAC company will evaluate its financial health first, looking for accurate and detailed financial reporting, solid bookkeeping practices, and the ability to forecast performance. If your company can demonstrate consistent profitability and provide monthly financial projections based on solid data, it will appear far more valuable in the eyes of investors. Here’s what buyers and others will primarily consider:
• Accuracy and Transparency. Ensure your financial statements are accurate, consistent, and transparent, including adherence to best practices overall and generally accepted accounting practices (GAAP) where feasible. For commercial HVAC (or any business that relies on projectbased contracts), follow monthly work-in-progress (WIP) accounting, adhere to a monthly closing process, and generate monthly internal financial statements. Having a compilation, review, or audit conducted by an external CPA firm based on the size and complexity of the business is highly recommended.
• Financial Modeling. Utilize financial modeling tools to create realistic projections and assess the impact of different business scenarios. Regularly review projections with the management team while tracking and evaluating whether and to what extent the company achieves these projections.
• Tax Efficiency. Optimize your tax strategy to minimize tax liabilities and maximize profitability. Careful tax planning with an experienced tax advisor can help you determine the best structure for the business based on your future plans. Doing so in advance of any major transaction will maximize the options available to you.
HVAC companies with a clearly defined growth plan are inherently more valuable than those that lack such a plan. Whether your company plans to expand into new markets, offer additional services (like plumbing or electrical), or increase market share through one or more acquisitions, having a documented strategic plan for growth signals to buyers or investors that your company is forward-thinking and capable of long-term success. Be sure to consider the following:
• Market Research. Conduct thorough market research to identify growth opportunities, assess competition, and understand customer needs.
• Diversification. Consider diversifying your revenue streams by offering additional services or entering new markets to reduce reliance on a single source of income. If you are heavy in projects or new construction, consider adding a service division or a maintenance plan for your customers. Investors and buyers find a diverse revenue mix that includes recurring revenue to be highly valuable and much desired. Review your customer mix; if more than 20% of your revenue is concentrated in one customer, contemplate strengthening your business development efforts in other areas.
• Partnerships and Acquisitions. Explore strategic partnerships or acquisitions to accelerate growth, gain market share, or access new technologies. Developing a clear list of businesses that you would want to partner with or acquire adds value to your business; it also offers potential lenders a way to understand your plan for growing the business and positions you in a more desirable light if you are looking to stay on and grow the business with a new owner.
The assets your company owns, such as vehicles, equipment, and buildings, are key components of its valuation. Owned assets, particularly those in good condition, add value by reducing ongoing operational costs; they can also be used as collateral if you seek financing for growth initiatives. Leased assets, on the other hand, might not contribute as much to a company’s overall valuation, but they offer flexibility and frequent turnover, which can ensure that customer-facing assets are well maintained and in overall good condition. Keep the following tips in mind:
• Asset Management. Implement a comprehensive asset management plan to track, maintain, and replace assets efficiently.
• Depreciation. Accurately calculate depreciation to reflect the decline in value of your assets over time.
• Lease vs. Buy Analysis. Evaluate the financial implications of leasing versus owning assets to determine the most cost-effective option for your business.
The value of your HVAC company, whether residential or commercial, is influenced by various factors, including market demand, operational efficiency, workforce and culture, and financial health. Today’s residential HVAC companies are benefiting from growing interest in energy efficiency and smart home technologies, while commercial HVAC businesses can capitalize on infrastructure investments and green initiatives. Either way, to maximize your company’s value, focus on diversifying revenue streams, maintaining a highly skilled workforce, and improving operational efficiency. With these strategies in place, your HVAC company will be well-positioned for smart growth, whether through organic expansion, bank financing, or a merger or acquisition.
Nicole Kiriakopoulos is Director Investment Banking, Mergers & Acquisitions at PCE Investment Bankers, Inc. pcecompanies.com. Pie charts by M. Pigot, IBISWorld, Inc.
That’s it for the summer of 2024. Here are a few commercial HVAC projects some leading brands shared after completion.
Lowder Brothers Heat & Air is a leading commercial heating and air conditioning company based in Pocola, Oklahoma, in the southeast corner of the state, a few miles from the western border of Arkansas. Justin and Magen Lowder started the business in 2008. They’re very ably assisted by Justin’s brother Heath and a team of dedicated technicians.
In the summer of 2024, administrators for the Northridge Elementary School expressed a need for 67 rooftop units for the 80,000 sq. ft. facility. Lowder Bros. had installed 65 rooftop units at another elementary school, so they were a logical choice. This Design/Build project was completed in tandem with Beshears Construction, based in Ft. Smith.
“The engineer and school district reached out to us and described some of the issues that they were facing in the school. There was a problem with high humidity, the units on the roof are old, worn out and inefficient and prone to breakdowns,” Lowder explained. Another request was that the units be easy to service due to low school district manpower.
“They only have three service technicians for the entire Van Buren School District, and they wanted to make sure whatever we put on the roof was easy to access, service and maintain,” Lowder said.
Lowder Bros. is just a quick 15-minute drive from Rheem’s Ft. Smith facility.
“We took all of those variables from the school district and complaints they had received and designed the systems based on the information they had given to us, and I worked with a Rheem engineer and a sales representative,” Lowder said. “I gave the engineer the model numbers and specifications for what we were proposing. The engineer went over everything, ran load calculations to make sure everything was in compliance with
state regulations. Rheem’s engineers and support was right there in our back yard to help us,” Lowder said.
The solution was Rheem Renaissance units with hot gas reheat, to provide comfortable climate for students and teachers.
The existing systems on the roof were from Carrier, and those units had served them well. “I believe they were late 1980 models, so they had served their time and served their purpose,” Lowder said.
“Rheem’s new platform fits the Carrier footprint, which is kind of the industry standard footprint. We did not have to use curb adapters or install new curbs, which save the district quite a bit of money, which can be used for other schools and projects,” Lowder shared. They’ll soon start work on a new wrestling facility and music center for the Van Buren School District, which will also utilize Rheem units.
Energy savings was at the top of the list of needs. “Energy savings was something they stressed was important. I think that’s becoming important for all the school districts; anywhere they can save money helps because they can invest the savings in other facilities,” Lowder shared.
During winter, the systems’ two-stage gas firing will conserve gas consumption over the old, single-stage systems.
“We elected to upgrade to the stainless steel heat exchanger, which gives them a 20-year warranty. We also elected to use hinged access panels on all units, so a service technician or those who change filters can turn the hinge a quarter turn of a screwdriver. The quicker they can work on them and get off the roof the more economic it is.”
Two-stage gas heat is built in to the Renaissance units. —Terry McIver
Edited for space. Find the entire article online, at contractingbusiness.com/ 55234512.
HVAC contractor Ryan Figueroa comes from a family deeply rooted in the trades. His father, uncle, and brother all have extensive experience in the industry, having worked for their family business R&K Air Conditioning in El Centro,
California. Drawing on over two decades of experience and a desire to forge his own path, Figueroa founded Top Gun Mechanical, specializing in VRF installations.
Top Gun Mechanical was tasked with outfitting a 32,000 square foot commercial building that will become the Legacy MD Medical Center. The facility will offer new medical services, including an urgent care center. The scope of the project was considerable, and if completed with traditional brazing methods, it would have taken months for the five technicians assigned to the job. The challenge was compounded by the extreme summer heat in El Centro, where temperatures can reach up to 120F. To keep his team safe and comfortable while maintaining efficiency, Figueroa recognized that brazing would be time-consuming and may have developed into an uncomfortable working environment.
The Top Gun team used RLS press fittings to install 64 fan coils, each with two pipes, totaling approximately 800 press fittings and 5,000 feet of pipe throughout the facility. Figueroa also relied on other key products he’s worked with before including using Toshiba/Carrier HVAC systems and utilizing trusted Navac tools to complete the project.
“What is fascinating to not only us as contractors, but also to the customer, is how well these fittings, tools and systems operate in our extreme climate,” Ryan remarked. “Even with temperatures over 115 degrees they never seem to skip a beat. They are truly state-of-the-art pieces of equipment.”
“I am always very aware of taking care of my crew while working in such extreme heat,” he continued. “I work to do everything in my power to ensure the health and safety of my colleagues. With massive projects like this one, avoiding burnout and heat exhaustion was one of my top priorities. My crew is the backbone of my entire business, so it is essential to strategically plan out the workday to make it through the entire project in a safe and efficient manner.”
RLS press fittings provide a flameless alternative to brazing for HVACR applications, which removes the need for added fire precautions such as hot work permits and fire spotters, speeding up the HVACR installation and repair process. The Top Gun team completed the VRF installation in just a few days by leveraging these efficient approaches, a stark contrast to the six-to-eight weeks that the project would have required using only brazing, all while staying cool despite the sweltering summer heat.
“At the end of the day, it all boils down to the numbers,” Figueroa said. “The fittings may cost more upfront, but the time, labor and sweat equity we save on jobs more than makes up for it and we are still able to deliver a top-quality install that we are known for throughout El Centro.” —Article provided by RLS
Harris’ Arizona Building Automation and Mechanical teams recently completed significant retrofit projects for a public university in Arizona, modernizing building systems to enhance efficiency and sustainability. These projects involved the demolition of outdated pneumatic control systems and the installation of advanced automation technologies designed to optimize energy use and extend the life of the university’s mechanical equipment.
The scope of work included retrofitting both a dormitory and an administration building, each with unique mechanical systems. The dormitory featured a steam-to-hot-water heat exchanger system that provided comfort heating to the student rooms, along with domestic hot water. Harris performed a comprehensive retrofit, replacing the pneumatic controls with state-of-the-art Distech IP controls. This process encompassed demolition, installation, engineering, programming, and commissioning. Harris worked closely with both the university’s facilities team and the project’s commissioning agent to ensure a seamless upgrade.
In collaboration with the contracted mechanical engineering firm, Harris helped develop a new sequence of operations and updated specification standards aligned with the university’s energy efficiency and operational goals. Additionally, Harris partnered with the campus IT team to ensure that communication with the local servers was implemented correctly and securely, safeguarding the integrity of the building’s automation systems.
The administration building posed a different set of challenges, with existing mechanical equipment such as boilers, air handling units (AHUs), and induction boxes. The zone control system was unfamiliar to many on the project team, requiring careful coordination. Harris worked alongside the mechanical engineer and commissioning agent to implement ASHRAE Guideline 36 sequences into the existing systems. This was achieved through minor mechanical modifications and the conversion of pneumatic controls to Distech IP controls, ensuring that the new programs complied with Guideline 36 standards.
Thanks to Harris’ strategic approach, the retrofit was completed with minimal disruption to the university’s daily operations. Our regional expertise and strong local relationships allowed for meticulous preconstruction planning, which enabled our teams to execute installation and demolition efficiently. Harris’ in-house panel fabrication team and local operations staff collaborated effectively to meet tight schedules and complete night work as required, ensuring the project stayed on track without compromising quality.
Harris is currently undertaking another pneumatic-to-DDC retrofit at the same university, once again utilizing Distech IP controls. As part of our commitment to long-term support, we are also assisting the university in building self-sufficiency through the training of its staff on the newly installed systems.
—By Cody Sinke, Senior BA Project Sales Representative, Harris.
As the HVAC industry makes progress with many changes that have taken place in 2024 and that are expected to continue through 2025, we offer another in our “What’s New? What’s Next?” series on HVAC manufacturer viewpoints. This month, we offer commentary by Michelle Robb, Senior Director Growth of Excellence at Mitsubishi Electric Trane HVAC US (METUS).
Contracting Business: Michelle, over the last two years, how well has the IRA spurred heat pump awareness and adoption among consumers and contractors? What changes have you seen occur in the industry since the legislation was passed and incentives started to roll out?
Michelle Robb: The Inflation Reduction Act (IRA) has greatly increased heat pump
awareness and adoption among homeowners and HVAC contractors. The push toward electrification is picking up speed, and governments are working to make the switch easier. Choosing an all-electric, all-climate heat pump system may come with federal incentives tax credits, and local utility rebates, depending on where someone lives.
The IRA’s $369 billion in clean energy provisions creates what Rewiring America calls an electric bank account for every household in the nation. The organization has a tool for homeowners to enter their household information to easily see if they are eligible for any of the programs. Similarly, Eli Technologies, a company based in San Francisco, lets consumers and contractors know which incentives they can apply for to electrify spaces.
Overall, heat pump sales across the United States are rising. In 2022 and 2023, the Air-Conditioning, Heating, & Refrigeration Institute (AHRI) reported that heat pumps outsold gas furnaces. In the first quarter of 2024, heat pump sales were already 30% higher than gas furnaces. In June 2024, 432,916 heat pumps shipped, compared to 379,895 units that shipped in June 2023—an increase of more than 53,000 systems.
Mitsubishi Electric Trane HVAC US (METUS) is experiencing record sales, especially in the Northeast. We lead more than 50% of the heat pump market share in Maine, one of the coldest states in the country.
METUS recently surveyed US homeowners to gauge their knowledge on the IRA and heat pumps, and we found that nearly two-thirds had heard of the IRA. The survey also found 54% of respondents would consider installing a heat pump to take advantage of a government incentive.
Today, two years after the IRA was signed, we know that more Americans are taking advantage of IRA-related savings.
CB: How have states been doing with their own rollout of rebate programs? What states are well-equipped for a successful rollout?
MR: It varies state to state. The map at left, which changes daily, shows New York, Wisconsin, Arizona, and New Mexico have rolled out IRA Home Energy Rebates, but the rollout does not always include heat pump rebates. Other states are coming on board.
States must establish and maintain a qualified contractor list of which contractors can participate in the different IRA programs, such as these two programs:
• The Home Efficiency Rebates Program (also known as HER).
• The Home Electrification and
Appliances Rebate Program (also known as the High-Efficiency Electric Home Rebate Act, or HEAR).
Each state will determine its own contractor criteria related to these rebate programs. Therefore, contractors may need training on heat pump installation and service and should sign up with state-specific energy offices/implementation providers with existing programs. Only program contractors can participate.
California provides a great example for rolling out heat pump incentives. Their rebates will be available through TECH Clean California, a statewide, pre-existing initiative to adopt clean space and water heating technology to create an equitable pathway to carbon-free homes by 2045 and install six million heat pumps by 2030.
According to the TECH Clean Energy website, as of Aug. 30, the program had 1,000 enrolled HVAC contractors, 40,000 installed units, and $90 million in paid incentives. This equates to greenhouse gas savings of 26,000 metric tons annually.
METUS has regular meetings with distributors and contractors in California to learn how they are implementing IRA incentives. We also educate them on its many benefits. California is rolling out the HEAR program in phases beginning with multifamily housing owners receiving up to a $14,000 maximum rebate per dwelling unit. We expect to see this expanded to single family, low-to-moderate income homes in the very near future.
Colorado is also making strides to incentivize heat pumps. According to CPR News, close to 66,000 Colorado households used tax credits for solar panels and other energy-efficient projects, including installing all-electric heat pump systems.
Colorado has applied and been approved for funding from the Home Energy Rebates program and the Home Electrification and Appliances Rebate program.
Some states are introducing limited IRA rebate programs, which gives them more time to develop the infrastructure needed to administer them effectively and ensure the programs are a success. Arizona, for instance, opened its IRA program for lowand moderate-income households that qualify for an emergency replacement. Heat pumps supplied through an airconditioning replacement program will
be offered in partnership with regional community action agencies to tackle heat relief emergencies and financial hardships. They are working to expand the program to all Arizona households later this year.
CB: How have METUS and the heat pump industry been educating consumers and contractors about the benefits?
MR: We are working to educate homeowners, contractors, and anyone in the HVAC industry about the benefits of heat pump installation.
My role at METUS is focused on educating consumers and HVAC contractors about the benefits of heat pumps and the resources available, like the IRA, to make installation a reality. My team and I create toolkits for contractors, which are designed to help them communicate the benefits of heat pumps and planned IRA incentives to consumers. METUS is also working to train contractors on new technology installations and equip them with the skills they need to meet new electrification demands from consumers.
METUS expects high demand for our high-efficiency, all-climate heat pumps. These solutions qualify for both ENERGY STAR and Consortium for Energy Efficiency standards, which are relevant to the IRA’s Home Energy Rebates and the 25C tax credit.
It’s worth mentioning that METUS became the first HVAC manufacturer to receive the Energy Skilled recognition from the Department of Energy (DOE) for its Residential Heat Pump Installation and Comfort Advising training program. The DOE’s training program supports the development of a robust U.S. building systems workforce.
METUS is committed to leading the charge to reduce fossil fuels in homes and commercial buildings. With the Energy Skilled designation, contractors who complete the METUS Residential Heat Pump Installation and Comfort Advising training program can feel confident in their vital role of helping Americans make home updates that increase their comfort while helping the environment.
CB: Over the next two years, how do you see heat pump awareness and adoption changing as more state rebate programs are rolled out?
MR: The U.S. must achieve 100% electric heating and cooling by 2050 to meet the IPCC’s (Intergovernmental Panel on Climate Change) target of achieving net zero carbon emissions. According to Rewiring America, to meet this goal, electric heat pump sales must triple the 2023 baseline by 2032. Specifically, 4.49 million additional electric heat pump sales need to occur in the next three years—from now through 2026—to meet this 2050 goal.
METUS projects a total market demand of 37.5 million heat pump units between 2022 and 2030, an increase we primarily attribute to the IRA.
These figures are reachable. Heat pumps are now considered a critical eco-friendly technology because they run efficiently on electricity and can be 100% powered by clean and renewable energy. As the IRA program matures and more information and statistics are revealed regarding incentives, the rollout strategy will change and improve. In the end, adoption across the United States will continue to increase.
CB: What are the three most important points that contractors should take away from this IRA Q&A?
MR: First, contractors need to get involved in the electrification movement because it’s only gaining momentum.
Second, they need to get trained to install and service all-electric, all-climate heat pump technology. We have plenty of programs to help contractors, including the Diamond Contractor® and Ductless Pro programs. HVAC contractors going through this program are in the driver’s seat because they participate in our multi-stage, in-depth training that ensures they are kept up-todate on equipment, new industry technologies, and installation best practices.
Lastly, they should rely on manufacturers like METUS to keep them up-to-date on the latest IRA happenings in each state. We are working behind the scenes with so many organizations and other statespecific programs to help them understand METUS’s involvement in the clean energy movement. We are constantly aiming to keep contractors in the loop.
By Charles Allgood
In late September the U.S. EPA announced a final rule establishing the Emissions Reduction and Reclamation (ER&R) program under the American Innovation and Manufacturing (AIM) Act of 2020. The final rule will work to manage the reuse
of hydrofluorocarbons (HFCs) and HFC substitutes and advance three main objectives: maximizing refrigerant reclamation, minimizing release of HFCs from equipment, and ensuring the safety of technicians and consumers.
ST. LOUIS, MO, Sept. 30 —Copeland announced that it has transitioned its product portfolio to align with the Copeland brand. This rebranding initiative represents a significant milestone in Copeland’s journey as a stand-alone company, further solidifying its commitment to delivering innovative climate solutions across global commercial, industrial, refrigeration and residential market sectors. Backed by more than 100 years of innovation, Copeland’s vision is to create sustainable solutions that improve lives and protect the planet today and for future generations.
“Our brand transition is a natural step forward in Copeland’s transformation. With a more consolidated and connected portfolio of brands, we will make it easier for our customers and end-users to navigate our extensive product range,” said Paul Mottershead, vice president of global marketing and communications at Copeland. “This strategic move allows us to meet the evolving needs of our customers, while unifying the next-generation climate solutions that address the HVACR industry’s most pressing challenges.”
Copeland’s product portfolio was previously offered under various brand names. Sources reported that this strategic rebranding aims to provide customers with a more consistent and recognizable brand experience while reinforcing Copeland’s core values of sustainability, reliability and innovation.
Copeland’s product portfolio was previously offered under various brand names. This strategic rebranding aims to provide customers with a more consistent and recognizable brand experience while reinforcing Copeland’s core values of sustainability, reliability and innovation.
In addition to Copeland’s line of compressors, variable speed drives, and refrigeration condensing units, the company is migrating its controls portfolio (i.e., rack, system, facility, environmental and flow controls), enterprise management software and services, leak detection, cargo monitoring, transport solutions and other system components to the Copeland brand. The brands transitioning to the Copeland name include:
• Dixell electronics.
• Emerson and Alco flow controls, valves and system components.
Emerson rack system facility controls and case controllers.
• Emerson leak detection.
• Emerson cargo monitoring solutions.
• ProAct services and software. ProAct Transport.
Additionally, the following brands, which are now part of the Copeland brand suite, will remain and play pivotal roles in Copeland’s portfolio:
• Sensi—Smart thermostats that enable demand-response capabilities and energy savings in residential and light commercial buildings.
• Verdant—Energy management solutions designed to reduce energy consumption in the hospitality and multi-dwelling unit markets.
Vilter—Industrial and commercial compression and controls, specialized for refrigeration, cold storage, heat pump and renewable natural gas (RNG) applications.
• White-Rodgers—Traditional thermostats, universal heating controls and gas valves for enhanced comfort and efficiency in residential and commercial spaces.
• Cooper-Atkins—Temperature and environmental measurement devices, compliance solutions and wireless monitoring systems for food service and industrial markets. Under the Copeland umbrella, the product brands above will retain their existing names with an updated look and feel. This approach retains the highly recognized brand names that customers and end-users know and value.
Product packaging and labeling updates to reflect the brand changes are being implemented over the next 6-12 months, ensuring a seamless and recognizable experience across all touchpoints by mid-2025.
This development will subject the HVACR industry to requirements related to leak detection and repair and refrigerant reclamation and reuse. Now more than ever it’s important for members at every level in the industry to employ a strong refrigerant management strategy. Structuring your strategy around the following “Eight Rs” can help ensure your business is aligned with the latest regulations and has the resources necessary to continue servicing equipment with legacy refrigerants as well as to successfully introduce A2L solutions to customers.
Regulations. Whether you’re manufacturing, installing, or servicing equipment, keeping up to date with regulatory changes is key to compliance. In addition, because regulatory changes will impact both legacy and new-generation refrigerants and equipment, understanding changes offers an important tool for planning for what’s next.
Record-keeping. Regulatory bodies conduct audits—relying heavily on record-keeping and reporting—to ensure compliance. This will mainly impact manufacturers, importers, and equipment owners. However, accurate and consistent record-keeping on the contractor side can prove to be incredibly beneficial to your business’s operating efficiency, bring added value to your customers, and support sustainability objectives.
Repair leaks. Practicing consistent, effective leak detection and repair is an important part of regulatory compliance that can also impact your bottom line by reducing service gas costs and keeping systems operating at peak efficiency. In addition, it’s the first line of defense in reducing HVACR systems’ impact on the environment.
Replace equipment. As systems approach the end of their serviceable lifetime, define which new, higher-efficiency units utilizing A2L refrigerants offer the best replacements. Remind customers of benefits such as reduced energy consumption and operating costs.
Retrofits. If equipment is in good condition and not nearing the end of its serviceable lifetime, it may still make sense, where applicable, to perform a refrigerant conversion, allowing it to operate with a more sustainable and readily available refrigerant.
Recovery. The first step in supporting refrigerant circularity, recovery means removing refrigerant from a system and placing it into a separate container. During this process it’s important to maintain its value/purity as much as possible by not mixing gases. Reuse/Recycle. This means returning recovered refrigerant to the same system, or another system with common ownership. Removing oil, moisture, or other contaminants via minor “cleanup” or filtering of the recovered gas may be part of the process. Reclamation. Reprocessing recovered refrigerant to meet approved industry purity specifications allows it to be reintroduced commercially for industry use and is becoming increasingly important in ensuring ample legacy refrigerant supply exists to
meet current servicing needs. In the US, reclamation must be performed by EPA-certified reclaimers.
The above steps offer insights on best practices to help guide refrigerant management at your business. To ensure compliance with regulations, proper steps should be taken—starting with a thorough review and understanding of specific definitions and requirements as outlined by the US EPA and any applicable state/ local agencies, and consulting with your regulatory and technical experts before acting or refraining from acting when it comes refrigerant use and reclamation. The EPA Emissions Reduction and Reclamation Program provides strong incentive for HVACR contractors and equipment owners/operators to design and implement their refrigerant management strategies. Additional motivations include the industry’s transition to A2Ls being well underway, the need for companies industry wide to help ensure sufficient supply of phase-downed legacy refrigerant and supporting the industry in reducing its impact on the environment. Moreover, adhering to the “Eight Rs” can keep your company in great position to maintain, and possibly grow, your business.
Charles “Dr. Chuck” Allgood holds a PhD in chemistry, has more than 30 years of experience in the HVACR industry, and is a respected speaker at many industry events. In addition to Chemours, he’s worked for the National Institute of Standards and Technology.
SOUTH & WEST: SENIOR MANAGER, BUSINESS DEVELOPMENT
Randy Jeter Office: 512-263-7280 Cell: 512-426-9145
Fax: 913-514-6628 rjeter@endeavorb2b.com
EAST COAST: SENIOR MANAGER, BUSINESS DEVELOPMENT
Brian Sack Cell: 732-629-1949 bsack@endeavorb2b.com
ACCOUNT MANAGER MIDWEST
Bill Boyadjis 973-829-0648 bboyadjis@endeavorb2b.com
CLASSIFIEDS/INSIDE SALES: MEDIA ACCOUNT EXECUTIVE
Steve Suarez Cell: 816-588-7372 Office: 941-259-0867
ssuarez@endeavorb2b.com
DIRECTOR OF SALES, BUILDINGS & CONSTRUCTION GROUP
Joe Agron 941-200-4778
jagron@endeavorb2b.com
The next decade will be the best in history for the HVAC replacement market, and A2L refrigerant mandates will bring rising prices.
For Service World Expo 2024, I was asked to present an outlook for the HVAC industry over the coming months and years. To understand the future, you must understand the past, because in the HVAC replacement market, the past is prologue.
In 2017, I sold to private equity. In 2020, after the country shut down due to Covid, I was searching for data that justified an optimistic outlook for the industry. Personally, I believed I could lead my team and the contractors we supported to a positive year, but things were not so positive for my parent company. Layoffs were promised, and I sought to avoid them.
Positive service call data from Service Titan and Scorpion supported a growth forecast, but I needed more definitive data. I found it at the AHRI website. AHRI, which is the manufacturers’ trade association, publishes statistical releases on industry shipments with historical data going back 20 years.
When I looked at the AHRI data, I saw that 2005 was the record year in the history of the industry for residential air conditioner and heat pump shipments. Given a 15-year average life expectancy, 2020 was looking strong. When the late summer in 2019 was factored in, I estimated a potential for 9.1 million replacements, a 26% jump. While Covid would defer replacements forward into 2021 and 2022, I felt strongly that 2020 would still be a record year and went public with it. No one in the industry shared my optimism. I was in a very lonely place.
Due to my certainty and data driven approach, the parent company didn’t impose a layoff, though we were held to our original profit plan. We smashed it, as the industry recorded 9.3 million shipments in 2020, with 8 million coming from the replacement market, a record year despite Covid and capacity driven deferrals.
Having emerged from 2020 on a high note, I returned to the AHRI data and noted that shipments contracted 40% from 2005 to 2009. I called this “the shipment cliff” and wrote about it (see bit.ly/hvacshipmentcliff). Once again, I was nearly alone when I projected a decline in replacements. It seemed obvious to me. You cannot replace what wasn’t installed.
Deferred replacements from 2020 delayed the onset of the shipment cliff. When it did begin to
appear, price increases from supply chain issues, SEER2, and general inflation overwhelmed the reduction in jobs. Moreover, increasing total revenue across fewer total replacements and the corresponding reduction in labor, meant record profits.
Private equity noticed the industry growth through Covid followed by the profits and went after residential service and replacement contractors aggressively. When the shipment cliff began to appear in earnest during the latter half of 2022 and across 2023, this caught many private equity firms by surprise. Combined with the rising interest rates, some began to get shaky financially.
Through August of 2024, shipments of residential air conditioners and heat pumps were up around 4%. While this could be pipeline fill, it seems that we might have bottomed out on the shipment cliff. Once we fully turn the corner, the outlook is rosy for the next decade with historical shipments growing each year.
In addition, the South Pacific undersea Tonga volcano that erupted in 2022 increased atmospheric water vapor by 10%. Since water vapor is the most significant greenhouse gas, we can expect higher temperatures until the water vapor works free, which will take the rest of the decade according to recent studies.
Industry prices can be expected to continue to rise thanks to the government’s A2L refrigerant mandates. Contractors appear aware of the need to pass along the price increases. A recent survey of contractors showed that from 2019 through next year, replacement prices are expected to rise 75% for consumers.
Private equity is still active and this remains a good time for contractors seeking an exit. For those electing to continue building their companies, keep adjusting prices to maintain margins. Market aggressively, no matter what the economy does. Work on increasing call conversion. Take a marketing approach to recruiting. Know your numbers and watch your cash. Keep a close eye on how AI might change the industry. Most of all, enjoy the next decade, which will be the best in history for the replacement market.
Matt Michel is a member of the Contracting Business Hall of Fame and author of “Contractor Stories,” an inspirational book of business lessons for contractors. Buy your copy at Amazon.
“ I met people that I would never have thought of meeting before. I’ve been to so many exhibitors I didn’t even know existed. There’s so many products you can see, touch –everything!”
Level up at the event for HVACR.
FEBRUARY 10-12, 2025
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