Another American manufacturing industry that formerly dominated the world and was responsible for most of its innovations, is about to get clobbered. U.S. air conditioning manufacturers, just like U.S. auto, TV, and electronics manufacturers, have become complacent, dull, risk averse, and focused on short-term results.

U.S. air conditioning manufacturers have produced most of the breakthroughs in the industry. Window air conditioners, package chillers, split-system air conditioners, rooftop units, heat pumps, and variable air volume systems are all U.S. developments that have shaped the world.

There are two tides swirling toward the U.S., one from Europe and one from Asia. From Europe comes radiant cooling and from Asia comes variable refrigerant volume (VRV), or as they are also known, multi-split or multi-zone systems.


Radiant cooling and heating provides excellent occupant comfort with high efficiency. It uses hot water in the range of 90° to 95°F and chilled water in the range of 60° to 65°. Since these temperatures are not very extreme, simple heating and chilling equipment is used. Radiant cooling and heating is even better suited to ground-source situations. A simple water-cooled chiller may be used more or less in reverse and set to chill the ground water and heat the building water. No equipment at all may be required for cooling; the ground water is usually cooler than that needed for air conditioning.

Radiant cooling has been around for a long time. It was first commercialized by a U.S. company in the 1960s. Its installations failed for the major reason that humidity was not controlled and condensation occurred on the panels with predictably unfortunate results. Even if the psychrometrics of humidity control were understood, the requisite dew point sensors were pneumatic and required frequent calibration.

I am familiar with a sophisticated building that was built in the 1960s, when energy costs were not a consideration. This 10-story building had radiant ceiling cooling and heating, a dew point-controlled ventilation air system, and controllable solar blinds on the nearly all-glass South and West exposures. Over time, building operational expertise was lost.

In the 1990s, a consulting engineer oversaw the replacement of the whole system with a fan-powered VAV system with electric reheat and the removal of the solar blinds. It’s ironic that by the time that energy was becoming expensive, we threw out an excellent system that would not have been too difficult to upgrade with digital controls, because we did not understand it and replaced it with the crude, energy-intensive system.

In Europe, where energy has always been expensive and building costs are high, radiant cooling has taken off. It’s also becoming popular in Australia. The downside of radiant cooling is that it requires new expertise to design, install, and operate. The design requires thorough knowledge of psychrometrics and the sequences required for humidity control.

The mechanical design and installation must be closely coordinated with lighting, sprinklers, and ceiling architectural details. Integration and cooperation is necessary among designers, engineers, and contractors that has rarely existed in the U.S. Operating engineers must understand psychrometrics, the sequence of operation, and the absolute importance of checking, calibrating, and replacing humidity sensors - more frequently than other control devices.

Radiant heating and cooling is going to spread in the U.S. because of its energy efficiency, competitive cost, and modest space requirement (a six-inch ceiling space is about the maximum required).

Several European and Australian manufacturers have commenced marketing in the U.S. but, fortunately for the U.S. industry, they have been timid and fairly ineffectual. I am sure they will gain steam. Look for Trox, Dadanco, and Invensys (also known by their European names Barcol-Air or Redec) who are already here, and expect many more once the market launches.


“Timid and ineffectual” is not how you would describe the Japanese marketing for VRV systems. VRV has taken a huge bite out of the central system, chiller-boiler market everywhere else in the world except the U.S.

VRV is an offshoot of the familiar mini-splits that were developed in Japan in the 1970s and spread around the world in the 1980s. VRV was invented by Daikin of Japan in 1982, introduced to the rest of the world in the late 1980s, and by 2002 had cut the market share of central system chillers to less than half their previous share.

Mitsubishi Electric introduced VRV to the U.S. in 2001 and, although it is an excellent product, it had to face the world’s largest and probably most conservative market alone. Consequently, the going was slow. In 2006, however, Daikin entered the market in a very big way, having bought McQuay and American Air Filter, and putting in place corporate headquarters, equipment and parts stocks, and company-employed service and sales personnel.

The presence of new players has improved not only Mitsubishi’s prospects but also that of many others. The 2007 AHR Expo in Dallas showed that at least eight other manufacturers were either considering or had already entered the U.S. market: Mitsubishi Heavy Industries, Hitachi, Sanyo, Fujitsu, Panasonic, Toshiba, LG, Haier, and probably others. All of these companies are internationally known and huge.

What are U.S. manufacturers doing about this coming transformation of the industry? A number of them have either developed or brand-named mini-splits, but I do not know of anyone developing VRV. It would be cannibalistic for them to market VRV because these sales would only come at the expense of their other products.

You might say they are facing the tough question of whether they would like to be devoured by a family member or by a total stranger. Furthermore, VRV is such a sophisticated, complex product, none but the biggest and richest firms could develop and support an entry.

Hopefully someone out there, maybe with the big three or some new startup, is coming up with the next big thing - now! If there isn’t, I can see that within the next 10 years our big three will either be gone or a small part of some foreign firm. We will see another U.S. industry forget its origins, become hidebound and self-absorbed, and get steam-rolled by smarter, more aggressive firms that plan for the long term and are not averse to risk.

Publication date:01/07/2008