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Manufacturers Expect Some Changes to Last for Residential HVAC

Manufacturers Expect Some Changes to Last for Residential HVAC

It’s been more than a year of change and challenges for residential HVAC contractors. The coronavirus pandemic drove some of this, although in some cases, it only accelerated existing trends. And some of these issues come from trends beyond the pandemic. A panel of executives from three OEMs recently gathered online to discuss where the residential segment is at and where it’s headed.

The seminar was hosted via video conference by the Air Conditioning Contractors of America (ACCA). Panelists were Tom Overs, vice president of residential business for Mitsubishi Electric Trane US (METUS); Mike Branson, president of global air at Rheem Manufacturing; and Justin Keppy, president of residential and light commercial HVAC at Carrier.

Last March, Overs said, the entire economy came to a halt. It seemed like HVAC contractors would face a long struggle for business. But then, after Memorial Day, consumers started to take the money they had set aside for summer vacations and invest in the homes in which they were suddenly spending all their time. Meanwhile, HVAC technicians had been deemed essential workers, meaning they could respond to this need for improved indoor comfort.

“You saw the tidal wave from June until the end of the year, and really it’s continued into this year,” Overs said. “We’ve continued to see strong demand from our customers. We see it as a robust economy right now, and consumers continue to spend on products for their homes.”

The unexpected consumer demand strained the HVAC equipment supply chain. Manufacturers operated under the assumption of lower demand and scaled back production in the spring, Branson said. They then faced challenges from the pandemic with labor shortages, workers unable to come in due to either illness or exposure, and the demands for social distancing. This added to an ongoing lack of parts due to issues overseas.

“There were a lot of precautions we had to take that really slowed down the ability to provide product at certain times,” Branson said. “But we did the right things for employees of our companies.”

These issues continue even now. Keppy said it has shown the industry where its strengths were and exposed some opportunities going forward. It also demonstrated the need for good communication and ordering practices. Keppy said the fulfilment process needs to grow more visible and manufacturers need to work more with their customers to incorporate demand forecasts.

“These latest shocks really showed how concerning in some places the supply chains really were, and we’re taking those lessons to heart going forward,” he said.

Everyone learned new ways to communicate and interact during the pandemic. These practices provide a good example of how the extraordinary situation advanced technological adaptation. Now HVAC contractors need to look at how to interact earlier with consumers online, Branson said. For example, do they take down payments online?

Keppy recommends better websites that educate consumers and offer a variety of solutions for concerns such as IAQ. It seems as if the public suddenly became interested in IAQ due to increased attention to preventive measures overall, ranging from slathering themselves with hand sanitizer to scrubbing the groceries. But really, IAQ is another example of a trend that grew faster during the pandemic, Overs said.

“The pandemic just brought it out from consumers because of all the time we were spending in our homes,” he said.

One long-term challenge the pandemic made even more pressing for HVAC contractors is the ongoing labor shortage. Branson said he sees some positive movement in this area. He’s attended several high school awards ceremonies in recent years and noticed an increase in scholarships for HVAC schools. Branson said HVAC contractors need to make sure they engage with their local schools.

They should also look at people outside the field and consider training candidates themselves. One group ripe for recruiting, Branson said, is military veterans transitioning to civilian life. Keppy said manufacturers help HVAC contractors by providing recruiting material. He said the industry needs to look at ways of making the workforce more diverse.

“Our industry is still way underweighted from a gender standpoint as well as a diversity standpoint,” Keppy said. “The more that we can do to attract interest across other populations, [the more] it will help fill not only the technician shortage but also the leadership shortage that we’re facing with a number of retirements.”

More young people may be drawn to the HVAC business as it becomes more digital, Overs said. The move to smart thermostats has many people viewing HVAC as part of a forward-looking technology rather than an older mechanical system, he said.

“We’re becoming a little more sexy,” Overs said.

With the pandemic appearing to subside, attention now turns to other issues, such as the environment. For HVAC contractors, that means the move toward refrigerants with lower GWP. A major concern for contractors is many of the alternatives are flammable — unlike R-22, the refrigerant which they replace. Branson said while these new refrigerants do have a certain level of flammability, it’s lower than natural gas or propane, both of which HVAC contractors regularly work with now.

There are non-flammable alternatives, Branson said, but most have yet to reach the stage where they can be easily used in HVAC systems. That day will come, though, so HVAC contractors can expect another change some time in the future. Branson said future refrigerants will provide greater efficiency and heat transfer.

“I would put money on it that this is not the end,” he said. “It will never end. We continue to innovate.”

Change will remain a constant for HVAC contractors, the panel agreed.