For the second year in a row, CEOs took questions directly from the contractor audience of ACCA’s annual conference. The first question of the event centered on the heavy regulations the government is introducing in the HVAC field. More specifically, contractors wanted to know about the 92 percent minimum-efficiency furnace standard proposed by the U.S. Department of Energy (DOE). Not surprisingly, nobody on stage thought it was a good idea. Doug Young, president and COO, Lennox Intl. Inc., put the idea somewhere between bad and really bad.
“We are in a tough time right now,” said Young. “The administration is forcing a heavy regulatory burden. The 92 percent is an enormous increase for our industry. In some markets, we are going to find it to be very difficult. I think it will be quite a challenge for consumers. I think the contractors will be put in a tough position by the consumer. It’s going to be hard for a contractor to say, ‘I can replace the furnace for X amount of money but I also need five times that to do some remodeling.’
“This places the contractor and industry in tough spots. I think we need a grassroots effort to get in front of this and slow it down or stop it. I realize they are trying to improve efficiency, but there are better ways to do it than to put it on the backs of the consumers, making it a burden on them, the contractor, and on up the channel.”
Mike Branson, vice president and general manager at Rheem Mfg. Co., was also skeptical of the proposal.
“We’ve proposed some alternatives, and we will continue to do so. There are a lot of installation challenges for a lot of applications. It will certainly impact the repair-versus-replace scenario,” Branson said.
Liz Haggerty, vice president and general manager, unitary products group, Johnson Controls Inc., said the industry needs to be heard.
“We need to have a voice. If we don’t start having discussions and focusing on comfort, we are going to end up in the same place we are now, where efficiency standards are being pushed down on us,” Haggerty said. “As an industry, we need to be having these conversations now. It’s important for us to discuss the balance between the cost and efficiency.”
This topic dovetailed into a conversation about energy efficiency and how development and technology will increase over the next 10 years. Contractors in the audience wanted to know how efficient air conditioners and furnaces may get.
“It takes a total system approach,” said Steve Gugliotta, vice president of global sales, automatic controls, Danfoss. “With smarter components, you will be able to look at everything in the system and optimize the max efficiency. It really comes down to the tech feasibility and the economics. There is a lot of untapped potential there.”
Young was quick to point out that efficiency is not the only item that should be considered.
“As much as I don’t want to admit this, we are bound by physics. The challenge is, how efficient can you make that system? I think you are really starting to see us tap out at the high end,” Young said. “There is a pretty healthy cost for every bit of extra efficiency we can squeeze out.
“The ultimate answer, I think, is better comfort,” added Young. “At some point, we need to turn our sights from getting that extra hundredth of efficiency and focus on a more comfortable environment where we are controlling airflows.”
Branson pointed out the reuse of energy is important.
“There are ways we can capture waste energy, and that is very powerful. We are in the industry of making products that move heat. How can we move that heat in a smart way, capture it, and get greater levels of energy efficiency?”
The contractor audience also wanted to hear the CEOs’ opinions on the shortage of qualified HVAC workers. “The workforce gap is a big challenge,” said Gugliotta. “About 50 percent of the workforce will retire over the next 10 years. From a training perspective, we are investing heavily. This is particularly true in the virtual training, which will become much more popular. The recruitment part of it is going to take an industry-wide collaborative approach to drive it and address the gap. Supporting organizations like ACCA and NATE [North American Technician Excellence] are critical to bridging that gap.”
Haggerty focused on a different type of training for the younger generation and how OEMs should address that. “We are really focusing on the technical training side of our business and delivering more video- and application-based training to the field. So, a technician can be out in the field and have a tablet to watch the troubleshooting on a video. This makes it very visually oriented. The new generation learns differently than the old generation, and it is important to provide tools to help this new generation learn,” Haggerty said.
Not surprisingly, smart products — specifically thermostats — were discussed. Contractors were concerned about the number of non-HVAC people installing thermostats these days. “We’re going to continue to develop — in a very healthy way — a smart environment where our devices are communicative and provide a great deal of functionality to the homeowner, contractor, and everyone else in the channel,” Young said.
Haggerty also laid out the responsibilities of the OEM.
“The Nest brought the thermostats to the phone,” he said. “As an OEM, we have to make sure our control systems are tied to the equipment so a consumer has the best optimal outcome for the use of the equipment. We are focused on integrating controllers and delivering the information to the building owner or homeowner however they’d like it delivered so they can understand the performance of their system.”
Branson talked about the importance of protecting consumer data. “The data tells you your behavior. Protecting that is just as important as protecting financial data. We have an obligation to do that,” Branson said.
Publication date: 5/11/2015