Manufacturers had a lot to like about last year. According to the Air-Conditioning, Heating, and Refrigeration Institute (AHRI), shipments of equipment increased in just about every category in 2013. Especially notable were shipments of air-source heat pumps, which were up 16 percent over 2012.

That good news has spilled over into this year as well, with a recent AHRI report showing a 25.4 percent year-to-date increase in air-source heat pump shipments for the first two months of 2014. With heat pumps becoming more popular across the U.S., manufacturers expect sales to remain strong for quite a while.

Driving Forces

The popularity of heat pumps is due to a chain reaction of sorts, noted Philip Windham, vice president of sales, Nordyne, a Nortek Co. “Many times, the utilities start the cycle by offering incentives and rebates to homeowners and explaining the value proposition of a heat pump system. The consumers then ask their HVAC contractors for more education on the energy savings and overall concept of a heat pump system. That, in turn, drives contractors to command better information and understanding from their manufacturing partners.”

As a result, contractors have become more comfortable offering heat pumps to customers, especially as advances in equipment technology have helped reverse longstanding negative opinions many have had about heat pump operation and perceived lack of longevity, added Windham.

And there have been major advances in technology, such as the use of inverter compressors, which help heat pumps achieve significantly higher heating efficiencies than those manufactured just a few years ago.

“It used to be traditionally understood that heat pump heating performance fell quickly as temperatures approached freezing,” said Kelly Hearnsberger, director of product marketing for the Daikin, Goodman, and Amana brands. “But strong efficiency performance at levels well below freezing now make it very common to sell heat pumps in the Northern U.S. and Canada.”

Variable-speed technology has also helped boost the energy efficiency of heat pumps and improve comfort levels, which has led to increased customer acceptance, including in nontraditional markets and areas other than the South, said Erick Moreira, director of product management, Lennox Intl.

“Heat pump sales continue to be strong across different applications and geographies,” said Moreira. “Because heat pumps simply move heat around rather than create heat, they can be a very efficient method of space conditioning, especially in moderate climates. This characteristic makes heat pumps attractive in applications such as small office spaces that are trying to offer a comfortable environment while managing energy costs.”

This combination of increased comfort and energy savings appeals to residential and commercial consumers alike, resulting in increased heat pump sales all over North America.

“Areas that never previously considered heat pumps, such as Canada, are now having them installed,” said Windham. “Other areas of strong growth are the Southeast, Mid-Atlantic, and Ohio Valley regions. And while a substantial part of heat pump growth has been generated via the residential side of our business, we have also seen an increase in demand for light commercial applications as the focus on efficiency intensifies.”

The Northeast is another region of strong growth, as many homeowners in that area do not have access to natural gas and are choosing to replace their oil furnaces with heat pumps instead. “When an old furnace goes out, heat pumps are an easy technology upgrade for many homeowners,” said Hearnsberger. “You also have to consider the number of homeowners in the Northern states and Canada who have added air conditioning systems to their homes when they never had it before. It’s now pretty much standard practice for all new construction.”

Future Is Bright

Manufacturers continue to be bullish on heat pumps with most expecting sustained growth from this segment of the HVAC market. As Windham noted, heat pumps will continue to be an attractive choice to homeowners who are looking for higher efficiencies and greater comfort.

“Consumers who are replacing condensing units with heat pumps are often opting for higher SEER products like our inverter-driven iQ Drive® line of heat pumps,” said Windham. “When we paired our inverter technology with a heat pump system — and reached up to 22 SEER/10 HSPF — the sales of inverter heat pumps swiftly surpassed the sales of our inverter split air conditioning units. The fact that a consumer can attain significant, measurable energy savings without the major expense of a geothermal installation has generated great demand for our high-end, high-efficiency
heat pumps.”

Reduced demand for fossil fuels will also boost heat pump sales, as more consumers choose to no longer use gas or oil for space heating purposes. “The use of fossil fuels for heating is on the decline and will continue to decline as government regulations continue to focus less on fossil fuels to preserve the environment,” said Hearnsberger. “However, the economy itself is the largest contributor to the recent overall growth in HVAC and is a significant contributor to heat pump growth, as well. If the economy suddenly took another downturn, we would obviously not continue to see double-digit growth.”

Even so, the economy continues to be a concern for a significant part of the population, which is why many consumers opt for heat pumps that are closer to minimum-efficiency standards. “It wasn’t that long ago that 10 SEER was the standard and 13 SEER was considered to be a high-efficiency product,” said Hearnsberger.

“Typically, the jump in price from a standard 13- to 15-SEER product can be significant and is difficult for the homeowner to justify.”

Moreira does see growing momentum in 14-plus SEER heat pumps and models featuring two-stage compressors and variable-speed technology, and he believes heat pumps will continue to gain market share. “However, some utility companies have indicated they will begin to offer greater incentives on furnaces because their cost to provide natural gas is very low while the cost of building new power plants is very high. As a result, I expect utilities that offer both gas and electricity to begin incentivizing gas furnaces, but even so, we expect the heat pump market to remain strong.”

Publication date: 5/26/2014 

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