HVAC Residential Market / HVAC Light Commercial Market / Split Systems / HVAC Commercial Market

VRF Market Share Increasing in US

Manufacturers Discuss Market Shifts and Trends

November 25, 2013

HVACR manufacturers, distributors, and contractors alike have taken notice of the variable-refrigerant flow (VRF) equipment and applications that are entering the U.S. market. Overseas, in countries like China and Japan, the HVAC market is virtually saturated with the technology, according to Brandon Bradley, LEED AP, at ABCO Supply, headquartered in Long Island City, N.Y. In the U.S., however, the market is moving incrementally. Having already reached 4 percent saturation, industry experts are expecting the VRF slice of the market pie to grow at a marked pace in the next few years.

Changing the North American Landscape

Manufacturers have made multiple changes to VRF’s North American landscape this year. One of the larger changes announced in November was Daikin Industries’ VRF entrance into the U.S. residential sector. Not only is the company launching a residential brand in the states, it will also be manufacturing the systems in the U.S., too. According to the company, this will place Daikin, Goodman, and Amana brands all on domestic soil at the same time. (See the full story on page 1 of this issue.)

It has been approximately 18 months since Carrier leveraged its joint venture with Toshiba to introduce a VRF line to North America.

“Though new to the North American market, similar Toshiba Carrier products have been manufactured and sold internationally for the past decade,” said Meredith Emmerich, general manager, VRF, Carrier. “With the addition of a strong VRF offering to our product line-up, we’re able to provide a complete suite of solutions for most buildings. With the inherent design flexibility and efficiency of VRF systems, we feel that our product line will continue to evolve in the future.”

Trane, a relative newcomer in the VRF market, offers a commercial line of VRF products and support services to commercial contractors looking to install VRF solutions in properties such as historic buildings, multi-tenant buildings, diversely occupied buildings, tenant-finished commercial property, arena-containing buildings, and more.

“In the last five years, the DOE [U.S. Department of Energy], AHRI [Air-Conditioning, Heating & Refrigeration Institute], and ASHRAE have officially recognized the unique efficiencies of ductless and VRF zoning systems through revised policies and regulations,” said Mike Smith, senior marketing manager for commercial products at Mitsubishi Electric U.S. Cooling and Heating Division. “This has gone a long way in increasing the acceptance of this technology as a major contender in the HVAC industry.”

Globally, Fujitsu General has been selling VRF products since 2001 and has also been in the North American market for the past two years.

“We are poised for great growth in this business segment,” said Brendan Casey, commercial product manager, Fujitsu General America. “We have a product that meets the demand for eco-friendly, high-efficiency commercial comfort solutions.”

With the growth continuing, Daikin noted that the next stage of business development is to fully realize the life cycle cost benefits of VRF technology.

“This can be done through dynamic energy modeling capabilities and improved integration capabilities to existing or traditional solutions,” said Lee Smith, vice president, market and applications strategy, Daikin North America LLC. “The recognition of the systems actually performing in buildings as they were promoted to do so, in a broad range of applications, is important. These proven points are piquing the interest and desire to have VRF systems at the owner level to the point of dictating that VRF is utilized in their buildings.”

Training Vital to Success

For distributors and contractors, the changes in the VRF market are increasing demand for training and support services to ensure product application success. Education for both links in the supply chain, as well as customer education, has become an inherent concern for manufacturers.

To address this, many VRF manufacturers are continuing current training, and some are adding new training opportunities. Fujitsu, for example, requires all designers and installers to attend a three-day training class at one of its training centers.

“While VRF systems are not difficult to install, there are certain rules, such as calculating and weighing in refrigerant, that are different from standard practices. By attending this training, contractors will have knowledge that will help them avoid costly mistakes, as well as ensure that these installation guidelines are followed,” said Casey. “We recently added specialized heat recovery VRF training for designers and installers who have already attended the heat pump VRF training class.”

In addition to formal classroom environments, Daikin launched a new learning management system (LMS) last year. There are more than 350 individual training courses available in the LMS.

“Daikin training facilities are fully equipped to appropriately train on all facets of VRV/F technology,” said Lee Smith. “The number of facilities increases each year with more than 20 locations nationwide where formal classroom-based Daikin training is available.”

Carrier offers training onsite, online, and at distributor training centers through Carrier University in Syracuse, N.Y.

“A contractor needs to complete VRF training and certification in the following areas: product, controls, design, application, and technical service,” said Emmerich. “Technical service training involves installation, startup, commissioning, operation, maintenance, and troubleshooting. It is also important that the contractor is trained to use software tools, which assist in not only the design, but the startup and diagnostics of the VRF systems as well.”

Mitsubishi Electric requires contractors to meet all local and state compliance and licensing requirements. The company also encourages its contractors to participate in factory training to ensure they provide the best service possible.

“In addition, the courses also discuss the theories associated with properly applying, installing, commissioning, and troubleshooting Mitsubishi Electric VRF zoning systems,” said Mike Smith. “The controls applications training course we offer is necessary to understand the full capabilities of the systems. Concepts are reinforced through practical, hands-on exercises.”

Sky’s the Limit

What is being predicted for the future of VRF in the U.S.? The versatility of the systems and their adaptability to alternative technology has those involved with VRF thinking that domestic application can only go one way — up. Casey pointed out that during the technology’s initial introduction to the U.S. market in 2003, oil was approximately $25 a barrel and interest in VRF was close to nonexistent. He noted that one catalyst sparking increased consumer interest occurred in 2005, as oil prices reached approximately $141 a barrel.

Another difference from VRF’s early years is the amount of pipe that can be used in installations. According to Lee Smith, the piping network was limited to approximately 1,000 feet in 2004. He explained that the typical piping network limit in 2013 has increased to approximately 3,280 feet.

“VRF zoning systems are well on their way to becoming mainstream,” said Mike Smith. “The rest of the world has embraced this technology and North America is beginning to catch on. The technology has accelerated to a half billion dollar segment since the introduction of our system in 2003. As the fastest growing segment of the U.S. HVAC market to date, VRF zoning technology is expected to keep growing as new efficiency regulations take effect.”

Publication date: 11/25/2013 

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President, Encore Mechanical, LLC

John Reynal
November 27, 2013
As an early adopter and big proponent of variable refrigerant technology, we really appreaciate the publicity given to the rising market share and broadening manufacturer support. On the other hand, while this article captures the increased emphasis on training it also serves to mislead. Quotes such as “A contractor NEEDS to complete VRF training and certification in the following areas: product, controls, design, application, and technical service,” by Emmerich and statements such as "Mitsubishi Electric REQUIRES contractors to meet all local and state compliance and licensing requirements." give the impression that the manufacturers somehow restrict who can purchase the equipment. A contractor 'NEEDS' to complete VRF training and certification to do what? Mitsubishi 'REQUIRES' contractors to meet all local and state compliance... in order that...? More realistically, and broadly stated, manufacturers will provide quotes and sell equipment to anyone. Owners, developers, facility managers, and general contractors may not be aware that because this equipment contains R410a, the EPA regulations do not prohibit the sell of this equipment as it did when R-22 was the standard. I certainly appreciate this emerging technology and the interests of the manufacturers to establish market share, however, there is an equally evolving arguement that in coming years the stakeholders in VRF will experience backlash from well publicized tragically installed systems. There are some very large properties saddled with litigation, others that are struggling with error code prone operation, and many others that might be heating and cooling to the satisfaction of the occupants but that are not delivering the stated efficiencies and will likely have premature equipment failures. Your audience should appreaciate that, at least in our experience, the equipment is delivered without faults or manufactuer defects. However, the 'achilles heel' of this great technology is that it can not overcome poor installations. When I read "Contractors need..." and "Mitsubishi requires..." it epitomized the false presumption that there is some sort of stopgap or safeguards in place to protect property owners from unqualified installers. In addition, many consider a "qualified" installer to be a firm that has attended an installation class. However, too often the classes are attended by a small contingency or sole employee who is then expected to transfer 3-days or 5-days of vernacular, tool requirements, software operation, piping requirements, etc. etc. To be clear, the inherent technology is absolutely impressive and somewhat complicated, but it relies on good planning utilitizing manufacturer piping software, a strict adherence to good piping principles, a certain level of low voltage competency, additional software to judge the final operation of the system to name of few of the reasons why both field and office personnel need to be well trained to provide a successful installation. Our recommendation, is that buyers of VRF installations approach the installer selection very skeptically, but not skeptical of the technology, but of the installer. For the large part, you will never know that installation is less than you bargained for until its way too late.



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