2020 Vision: The Future Is Now

Posted on:

September 5, 2013

In 2020, HVAC contractors predict that you might not recognize your own industry. That’s how fast it’s changing.

“Years ago, we had a simple, metal thermostat that controlled air conditioning,” explains Phil London, senior account executive, Thermal Concepts, Davie, FL. “Now we’re going to digital, programmable, whole house thermostats with remote access via smart phones. Thermostats not only control the air conditioning and the heating, but the building environment. The whole industry is going to be nothing like we know it today.”

He gives the example of the high-efficiency air conditioning system recently installed in his own home. “If you open it up, it’s nothing like the unit it replaced,” London says. “All those mechanical features are no longer there. It’s all on a chip. It’s all on a board. We no longer go out there with a wrench and a set of gauges. It’s computer chips and programming. And that’s just the beginning on the evolution. Whatever we see today is not going to be there seven years from now. Not at all.”

Steve Lauten, president, Total Air and Heat Co., Plano, TX, agrees. “There’s a huge evolution by all manufacturers providing smart thermostats and systems,” he says. “As technology evolves, air conditioning is evolving with it. There’s no question we have to continue to up our game. I see our industry increasingly becoming more technical as we add electronics to the systems.”

Lauten foresees that consumers will soon be able to interface with their air conditioning system from anywhere in the world. Enhanced systems will offer greater comfort, variable capacity, variable airflow, and better air filtration. “The ultimate air conditioning system is one that can infinitely change as the climate outdoors changes to provide you with a constant conditioning of the space,” he says.

History in the Making

Dave Kyle, general manager, Trademasters Service Corp., Lorton, VA, believes it’s often necessary “to look back to look forward.” He explains that in the 1960s and 1970s, indoor environmental air conditioning was a luxury in homes. “Certainly, in the ‘80s and ‘90s, it became a convenience, and people started adding central air to homes that didn’t have it. Today, central cooling systems are an absolute necessity,” he says.

Now that most homes have central air, the industry focus has transitioned from installation, according to Kyle. “Moving forward, we will have to concentrate on life, health, and safety issues. Now that we’re conditioning the air, what does that do to the environment of the home?” he asks.

He also forecasts a movement toward the variable refrigerant flow (VRF) and variable refrigerant volume (VRV) technology, the multi-split equipment currently manufactured by several Asian companies. “That technology will continue its integration into standard U.S. home,” he says. “Right now, there is a lot of interest, but in five years it will make a major play into the ducted U.S. market with these hybrid systems that are multi-split and ducted systems.”

What other changes can the industry expect? Four additional predictions include:

Self-diagnostics.

Lauten points out that systems already have the ability to notify his company about malfunctions. “We can let customer know that we need to come out before anything breaks,” he says. “Isn’t that awesome? With the implementation of electronics into these systems, there are a lot of possibilities.”

Kyle adds that system diagnostic messages, while available now, will be “an absolute necessity in the future. Your system will fully communicate with the home network.”

Ever-increasing energy efficiency.

“Every year, I think, ‘Wow. They’ve got this really efficient,’ and then the next year, they come up with something even more efficient,” says Narissa Rampey, owner and human resource manager, Air Assurance, Broken Arrow, OK. “We’ve gone from the old way of doing things with ducts, which we’ve always done in the United States, to the European technology of ductless systems. More and more, we will look to the outside world at what is being used.”

Kyle estimates that by the time 2020 rolls around, energy will be one of the absolute main drivers. “This will be a great industry to be in because everything from shopping malls to doctor’s offices to people’s homes will need high efficient equipment to be able to afford operational costs,” he says. “If you look at the European model and what they pay for energy, it is substantially more than we pay.”

Market segmentation.

Ray Isaac, president, Isaac Heating & Air Conditioning, Inc., Rochester, NY, believes that the HVAC market will divide into two camps: boutique companies that are very focused in a certain area and companies that branch out into many other specialties, such as plumbing, electrical, home security, pest elimination, and home energy performance, “which we are very big into.”

Rampey explains that her company, which has historically concentrated on HVAC service and retrofits, is now moving into other areas, such as plumbing. “With everything becoming integrated, we may branch out to other areas to fill customer needs. My company is driven by our customers. Right now, I don’t see new construction as an option, but I never say never. I never thought I would have a plumbing division, and now I do.”

Continued government regulation.

It is no surprise that contractors are feeling the pressures of government regulations in their daily businesses. From regional standards from the Department of Energy (DOE) to healthcare reform requirements, the government seems to have a huge impact on every aspect of business.

“When I talk to people and they ask what the biggest challenge to running a business is, I say, “Government regulations and requirements,’” Isaac explains. “I could name 10 acronyms— including the IRS—that create hassles for us. It’s an acronym soup, and it keeps getting worse.”

It’s not only the federal government that is pushing regulations that are affecting the way contractors do business. Many states and local governments are looking for ways to “green up” their policies. With heating and cooling equipment being a one of the largest consumers of energy, contractors can expect to see more regulations in their states.

Rampey suggests that contractors need to be more involved in ACCA so future regulations are well written, beneficial, and “won’t turn our companies upside down.”

Tax credits and energy incentives.

Most contractors believe that the days of large tax credits for energy efficient upgrades that came from the federal government are done. They believe the energy incentives will grow on the state level through utility programs. They also agree that contractors should not create a dependence on these types of incentives, because they are “easy come, easy go,” there is no guarantee that they will be available now or in the future.

Ultimately, Isaac says, “Entrepreneurial, innovative, experimental individuals, and companies are going to determine what the industry will look like in 2020. It won’t be fate. We have to create what we’re going to look like.”