Zoning Adoption Steadily Increases in Residential Market
Educating contractors is imperative to grow the market, according to industry professionals
When it comes to comfort, not much beats zoning. In fact, many industry experts tout that once homeowners have experienced the comfort zoning has to offer, they will never own another house without it. Despite that fact, zoning comprises a relatively small portion of the overall HVAC market.
“Contractors are key — the consumer relies on what they sell and offer,” said Dick Foster, president, ZoneFirst. “The vast majority of contractors don’t feel comfortable with zoning and, therefore, won’t offer it. They’ll sell a mini split to solve the uncomfortable rooms instead of fixing the duct system. We need to do a better job of educating contractors. It’s hard to change their minds. I get calls from consumers all the time wondering how much zoning costs and who can put it in. Unfortunately, there are a slim number of contractors out there who will handle that call.”
Foster noted that even with the new technologies available for smart homes, many homebuilders are not including zoning because it still comes down to price — and HVAC is not a high priority — which is an industry issue. Instead, builders like to sell what people can see, and other than the thermostat, HVAC systems are not something homeowners look for.
“Additionally, in retrofit situations, very few contractors spend time looking at the whole system with measuring duct sizes and airflows,” Foster said. “But when you think about how inefficient central heating and air conditioning systems are — 30 percent of your loss is through the duct system because it leaks. We need to make a push for consumer awareness. If people are made aware, then they’ll start asking their contractors for it.
“Contractors who will take the time to learn about zoning will have a great opportunity and can sell zoning on about 50 percent of all their jobs,” he continued. “They have to give the homeowner the option. Look at it this way — almost every model car comes with or has the option for driver and passenger temperature controls. HVAC contractors and homebuilders can be doing the same.”
Blake Edwards, senior product marketing manager, controls, Lennox Intl. Inc., said that while zoning continues to become more popular, many contractors only discuss it when it’s brought up to them first.
“We look at zoning as an overlooked opportunity,” he said. “Right now, from a contractor’s standpoint, only 21 percent of homeowners are being offered zoning — and that number comes from our American Home Comfort Study we ran in 2017. But on the other hand, we see about seven out of 10 HVAC buyers are willing to add additional controls if they can increase comfort and save energy. Zoning can definitely do that.”
According to Edwards, contractors should be leading with questions to determine if rooms get too hot or too cold in order to identify the needs of the consumer and then offer zoning as a solution. Most of the time, customers may not even realize they have the option to pinpoint the comfort of one individual room versus a whole-home system.
“Contractors should focus on discussing zoning and offering it to customers because, even if you put in the best system, there can be individual rooms where the customers’ needs aren’t being met,” Edwards said. “And if that is the case, you haven’t fully provided that consumer the 100 percent customer experience.”
According to Mike Reilly, president, EWC Controls Inc., the biggest trend in zoning right now is the closed-loop protocol that most OEMs are designing into their zoning products. The components are being designed to communicate with the equipment they are controlling through a closed-loop logic that allows easier and faster installation at the contractor level.
“These designs are becoming more popular because of the current and pending labor shortage in the HVAC industry,” Reilly said. “The closed-loop logic allows for greater technology to be incorporated into the equipment, but it does so with fewer wires and less complicated installations.”
Over the past decade, control systems have evolved to be sleek, innovative, and intuitive, noted Tim Botten, single family segment specialist, Uponor.
“The industry is now asking how the features and technology in the products provide value to the end user,” Botten said. “Manufacturers are seeking the newest bolt-on technology features that can be implemented into existing products. There is a big focus on simplification. The complexity in some products has potentially overwhelmed users who are unable to understand how to use or take advantage of the features they were sold on. The goal is to minimize the amount of interaction the end user has with the device to make it simpler and easier to use.”
Botten noted there is an increased interest in zoning products among contractors from an energy-efficiency standpoint.
“It’s important to not heat or cool areas that don’t need to be conditioned,” he said. “It is the industry’s responsibility to become more efficient and innovative with equipment and controls that can reduce or eliminate energy waste.”
Though zoning is still not mainstream, it is a growing segment of the HVAC industry, according to Tom Jackson, CEO, iO HVAC Controls.
“While consumer awareness is nowhere near where I’d like it to be, it is growing,” he said. “We’re a small niche of the overall HVAC market, so even a little awareness helps a lot. And the strong economy is always a good thing with people building new houses and buying existing homes. Zoning is one of those features on your HVAC that once you have it once, you’ll never live in another house without it, because that level of comfort from having multiple thermostats and being able to control the temperature in the important areas of your house is just huge.”
Contractors who do offer zoning products to their customers increase their bottom lines and differentiate themselves from their competitors.
“By adding a zoning system to each job a contractor installs, they have the ability to increase their profit margin up to 40 percent per job,” Reilly said. “Offering a zoning system also allows the contractor to solve problems in the heating and cooling system that most homeowners are complaining about. It is estimated that 60 percent of homeowners are dissatisfied with their HVAC system’s performance.”
The worst problem contractors face is customer callbacks, noted Botten. If users are not comfortable, they call their contractor or hire a new one and voice their concern.
“Too often, users just don’t understand how the controls work,” he said. “For example, if the space is hot and the air conditioning is on, the user then proceeds to lower the set point several more degrees. Remember, the air conditioning is on. Lowering the set point further will not turn it ‘more on’ or cool it faster. If a user doesn’t understand how it works, it doesn’t work effectively, and then they complain to the contractor who installed the system.”
Jackson agreed, saying better temperature control means better results from the HVAC equipment, which means happier clients.
“Happier clients equate to more profit,” he said. “If you can satisfy a homeowner, that means you can charge for it.”
As zoning awareness continues to increase, market adoption will steadily rise.
“I’ve been in zoning for 50 years,” said Foster. “And we’ve grown consistently about 20 percent a year. When construction took a nosedive in 2006-2007, zoning took a hit as well by about 30 percent. That’s because homebuilding went down a lot. Much of today’s zoning goes into new construction. Where contractors are missing the boat is there are about 100 million homes with ducted central heating and air conditioning, and all are a potential for zoning. There’s your base of business. Contractors need to go in with a positive attitude and some creative thinking of how they can zone the house. If they have a little imagination, they can do it.”
Reilly said he expects to see the market grow significantly over the next five years.
“As a member in the Zoning Section Product Committee in AHRI [Air-Conditioning, Heating, and Refrigeration Institute], it is estimated that zoning currently has less than a 15 percent market penetration countrywide,” he said. “I strongly believe in the next five years we are going to see that number get closer to 50 percent. The biggest factor for this prediction is that technology is making the installation of zoning systems easier, and the easier they become, the more contractors will see zoning as a profit driver for their company.”
Publication date: 4/30/2018