HVAC Residential Market / Green Building / HVAC Commercial Market / Energy Management Systems

Green on the Upswing for HVAC Markets

Commercial and Residential Markets Trend Greener Post-Recession

November 18, 2013
Trans

The pressure is on to go green. As the construction market recaptures its warmth, the move toward greener building is heating up along with it, according to experts in the field. While the primary motivator behind this trend remains saving on energy costs, social pressure and sustainability goals are also becoming drivers. Yet there are still obstacles that scare some customers away from choosing to go greener with their HVAC system design and overall building practices.

Green Light — Go

The desire for heightened energy efficiency and the subsequent savings on utility bills is the main motivation behind the green building market. Yet there is also increasing social pressure for companies and homeowners to go greener.

According to Kevin Kovak, vice president of sales and marketing, ABM Building & Energy Solutions, his company is seeing three trends that are propelling owners to proceed with greener design: social pressure, corporate and community initiatives, and economics.

The social pressure is pushing owners to “do the right thing for the environment,” he said.

Kovak is also seeing corporate and community initiatives that set sustainability goals, such as achieving 20 percent energy reduction targets.

Greg Crumpton, president and founder of AirTight Mechanical Inc., Charlotte, N.C., has also observed this.

“Some are legitimately trying to do the right thing and lower their consumption, for the environment, for the dollars saved, and due to corporate mandates,” he said.

But it usually boils down to the money. Todd Pfahl, director of sales, Trox USA Inc., elaborated on this, saying that “Most of the energy consumption in commercial buildings is associated with the HVAC system,” he said. “The biggest driver for sustainable HVAC solutions is therefore the reduction of energy costs due to the HVAC equipment in comparison with the traditional VAV [variable-air-volume] systems.”

Lisa Hickey, marketing and communications manager, Belimo Aircontrols (USA) Inc., added, “The efficiency of green systems allow people to save money on their energy bills, which has the potential to make a huge difference in some buildings.”

Judy Linder, director of marketing and product planning, ClimaCool Corp., added that going green enables building owners to save on operation costs.

From a residential perspective, Brian McDonald, general manager of Outer Banks Heating & Cooling, Kill Devil Hills, N.C., said, “We’re the only HVAC contractor in our local area that is Energy Star 3.0 certified. By upgrading homes’ efficiency, or installing geothermal heat pumps, we’re making about as much impact as possible when it comes to reducing a home’s carbon footprint. We also help guide our customers on proper air sealing of their homes and common-sense insulation installation for our climate zone.”

He added that, for his customers, “I don’t think it’s all about energy savings, though. I think improved comfort has a lot of impact as well.”

Fred H. Kobie, president and CEO of Kobie Kooling Inc., Fort Myers, Fla., agreed that comfort is a key motivator for customers when considering green HVAC investments.

“I don’t believe people are overly interested in going green, but they are interested in saving money. They are also very interested in comfort and technology,” he said. “Long-term utility savings is hands-down the motivator. The modern customer is either seeking the ‘cheapest’ or ‘most advanced’ — there is not much in the middle.”

The Certification Factor

Green building codes and green certification programs are also starting to impact owners’ desires to go green. According to Neal Walsh, vice president of sales and marketing, Aeroseal LLC, “More stringent building standards continue to drive the push towards greener building design and technologies.”

Raj Hiremath, marketing director, ClimateMaster Inc., noted how this is particularly affecting the geothermal market.

“Geothermal systems are gaining further traction in tandem with more aggressive building standards and codes, as well as changing legislation,” he said.

Voluntary green certification programs such as Leadership in Energy and Environmental Design (LEED) are growing in popularity, offering immeasurable marketing advantages.

“For green building professionals and building owners, having a home or building earn a green certification has become a marketing asset — it’s a way to bring more attention to their building,” said Mike Smith, senior marketing manager, commercial products, Mitsubishi Electric US Cooling & Heating Division.

“To be recognized as environmentally conscious and contribute towards a healthier environment, the LEED certification drives design professionals and building owners in green building and implementing sustainable HVAC solutions to the same degree,” Pfahl said.

Yellow Light — Proceed with Caution

While going green is becoming more attractive to many building owners and homeowners, many are still worried about the costs associated with it.

“A likely roadblock is the perception that green building adds unrecoverable cost — both initially and over time,” said Dale Stroud, senior director, marketing/offerings, Uponor. “Other than that, it is likely that we, as manufacturers, have not yet done enough to educate and train contractors and other customers about how our products are able to contribute to green building, and how they affect the overall economics, both at the time of construction as well as during use and occupancy.”

McDonald stated it simply: “A lot of people believe the cost is too high. In reality, they will be, or already are, paying for it with higher energy usage.”

Kovak added that concerns about higher costs vary by region.

“In the Southeast, power rates are cheap so the economics don’t look as good — there’s not enough savings to justify the extra costs. In the Northeast, we are starting to see more sustainability goals as drivers but less social pressure — going green still has the perception of being expensive. Out West, we get the perfect storm of higher utility costs, more social pressure, and sustainability goals, so we have very little pushback in those markets,” he said.

Randy Niederer, LEEP AP Homes, vice president of marketing, Unico Inc., stated that sometimes the residential customer’s perspective can be a roadblock to going green.

“For the customer, it is the perception that it costs more to own a sustainable home,” he said. “A truly sustainable home, whether built to LEED standards, DOE Builders Challenge standards, or other organizations’ sustainable standards, should be one that costs less to operate and maintain over the life of the home than does a home that is not built to these higher standards.”

And, he added, what’s more important than the dollars and cents “is providing homes that offer greatly increased benefits for the homes’ occupants, and for the environment as a whole.”

In addition to consumers’ hesitation about costs, contractors can also be hesitant about working with greener products and systems.

“For customers, especially HVAC contractors, roadblocks to going green often include a lack of knowledge about the technology, fear of using new products that are unfamiliar to them, and misunderstanding the initial costs of the systems,” said Smith. “We find that, as professionals, HVAC contractors are quick to understand the benefits of green HVAC systems, but they are in tune with their customers’ needs and worry about customer pushback on the technology. Arming contractors with educational tools to help them get their customers better acquainted with new, efficient heating and cooling methods will help them get over this hurdle.”

Hickey agreed that this hurdle is a problem for many contractors.

“The biggest roadblock that is still impeding contractors and customers from going green in some areas is past experiences, and a lack of understanding, resources, and training,” she said. She noted, however, that training workshops and factory tours showcasing green building technology can aid in overcoming these barriers.

Crumpton also stated that the fear of the unknown can negatively affect customers.

“We have found that while most people really want to and seem to enjoy learning about new products, few want to be the first to buy a ‘new’ product or technology. People get nervous when they are the first to wade into the pool.”

Overall, Crumpton said, “For sure, we see the trend heading towards a greener future.” Yet, he noted, “It is, and has been, a tough road of education and awareness.”

Full Speed Ahead

As the post-recession activity increases in the new construction and replacement markets, manufacturers are seeing a positive trend toward green improvements, with some sectors and some regions shining especially bright.

Accroding to Linder, “The health care and education markets are experiencing the strongest growth.”

Pfahl agreed, adding, “The demand for hospital and educational facility refurbishment and new construction is rising, and owners and designers are considering solutions that are suited for this type of work, save energy and utility costs, and can contribute towards a LEED certification.”

Hickey said, “The largest area of green buildings is government (federal/state/local) and universities (again with government money).”

And Kovak summed up the hottest markets for green as the MUSH sectors — municipalities, universities, schools (K-12), and hospitals.

“Places with higher energy rates are definitely more motivated by the efficiency boosts that are currently available,” he said. “The bulk of activity is with buildings that need to replace their equipment now — they realize that they have put off the upgrade for too long already. The good news is that the cost delta of going with high efficiency will be saved in a short amount of time versus installing code-minimum equipment.”

Not only is the commercial side heating up, but so is residential.

“Frankly, we see it fairly widespread — residential and nonresidential throughout the country, although, obviously, the interest in heating and/or cooling is highly dependent on climate zone,” Stroud said.

Hiremath added, “The residential market is definitely coming back, and within that market we see further promise with utility companies coming onboard with offsets and subsidies like geothermal loop-field leasing programs.”

McDonald confirmed that, from his perspective as a contractor, he is observing this shift.

“As more people are becoming aware of the potential for energy savings and improved comfort, we’re seeing homes built greener,” he said.

Overall, Smith said, “Green building is increasing everywhere and across all markets.”

Publication date: 11/18/2013 

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