Heat Wave Fires Up HVAC Business

August 30, 2010
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It’s been a sizzling summer, especially along the Northeast coast, where many cities experienced a warmer-than-usual June and an even hotter July. According to Alex Sosnowski, an expert senior meteorologist for AccuWeather, “New York City averaged around 5.5 degrees above normal for July.” And, he added, it was a similar story for many other cities along the Eastern coast. HVAC contractors in the region say the warm weather has been a boon for business.

FEELING THE HEAT

“We’re always busy, but this summer is nuts. It’s a lot of hours, but it’s good for us,” said Gary P. Brucato, owner of Fire & Ice Heating and Cooling in New York City. His company, which has been in operation since 1987, works out of Queens and serves commercial customers in Manhattan, as well as an increasing number of residential customers on Long Island.

Brucato continued, “I haven’t seen this weather in a long time. It’s hot, it showers, it cools off, it’s very humid. It’s not normal.”

According to Mike Leonard, a service technician with Heating and AC Services Inc./ARS of West Bridgewater, Mass., “In New England, we always get the stretches of the hot and humid. We’ll get a week or two at a time and it’s normal. We’re pushing four weeks now of unrelenting heat and humidity, and people are just tired of it.”

Leonard’s company does mostly residential work and services the whole east coast of Massachusetts. He noted that a few days had been drier, but for the most part, July was a month of “unrelenting humidity that was just oppressive.” Of course, this level of heat and humidity leads to a lot of stress on homeowners’ air conditioning systems.

Leonard said, “If there were any weaknesses in their systems, we’ve found them.” For example, he said, “If their drain is partially clogged, under normal circumstances they wouldn’t notice anything, but now they have water all over the basement or attic. If a motor or compressor is old or a little tired, this weather has killed it.”

While homeowners may be complaining, HVAC contractors are rejoicing. “It’s been incredible,” Leonard said. “We haven’t been this busy in a long time.”

Referring to last summer, Leonard said, it was a mild season for the Boston area, and there were record amounts of rain. In contrast, he said, “This year we’re slamming.”

The hot and sticky weather has created a backlog for Heating and AC Services. “We’re selling jobs today that we’re booking for the end of next week,” Leonard said. “We usually have a two-to-three-day turnaround for jobs.”

WORKING OVERTIME

Leonard said the other technicians at his company are grateful for the weather because “with this economy, everyone loves the overtime.” But while the weather has created more jobs, it hasn’t created a need for a hiring blitz. “We’ve hired a couple of helpers and might be looking for another tech or two, but we’ve been able to keep up,” Leonard said.

Brucato added, “The winter was slow, so this made up for it. We have a cash flow finally. I’m happy it’s warm or hot out.” He admitted that he and his technicians are a little tired, but noted that the heat wouldn’t last forever. “It’s only temporary. The winter will be here eventually, and we needed a shot in the arm.”

Brucato also commented that, even though there’s plenty of work, contractors have to be committed to finishing the job. He added that his employees are able to handle the extreme heat, but they have faced additional difficulties with the new R-410A regulations.

According to Brucato, the new regulations are making it more difficult for service companies to function normally because technicians must adjust to a learning curve with R-410A. “Most technicians out there are still in the embryo stage with this refrigerant. There’s a lot to know about this gas,” he said, adding that he has it “down to a science now.”

PROMOTING TAX CREDITS

Traditionally, a heat wave tends to be good for business because people stop postponing the repairs and replacements needed for their cooling equipment. But consumers have become much more conscious of their spending during the current economic downturn, so the hot weather alone may not have been reason enough for HVAC upgrades without the tax credits. Contractors said that the 25C tax credits, which will expire at the end of this year, have also aided their sales.

“Despite the economy, people are fixing things, which is a good thing,” Brucato said. “When people need to fix something, they manage to find the money. And with the $1,500 tax credit, people are spending the money this year.” Brucato said his company generally does more commercial work, but this season “because of the stimulus package and tax credits, we’ve been doing a lot of residential installs.”

Leonard also noted that the federal tax credits and electric company rebates are aiding sales. “The credit and rebates are giving us good incentives to offer customers,” he said. “For people who are on a tight budget, instead of going with a basic system, they are able to get a real nice middle-of-the-road system.”

The combination of the weather and the tax credit has also given Leonard the chance to upsell. “Recently, I had a dead condenser,” he said. “With the tax credit, I was able to upsell to a new condenser and air handler. [The tax credit] made the difference from selling a condenser to a full system.”

BOOSTING THE BOTTOM LINE

Brucato said the warm summer weather has aided HVAC contractors across New York. “Everybody [big and small contractors] got a piece of it. It just goes to show you how many people in New York City need air conditioning.” He added that, even if it was only for June and July, the heat wave really helped out his business, but he’s hoping the heat will continue through the end of the summer.

And he’s certainly not the only contractor with that wish. Leonard also hoped that the heat would stick around, and predicted that, overall, summer 2010 will be one of his company’s best.

Publication date: 08/30/2010

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