Steve Moon, owner of Moon Services Inc., Elkton, Maryland, thinks that is a dangerous position for contractors to take.

INTRO TO IoT: For HVAC contractors, smart thermostats can be a good gateway for the Internet of Things and its business opportunities.

“HVAC could own the home automation industry if the contractors focus on it and sell it,” he said. “If not, it will be just like the water softener installations that plumbers initially said wasn’t a part of their business. Now there’s a whole other industry for water softeners.”

Moon explained that home automation is right in the HVAC industry’s wheelhouse and an opportunity that shouldn’t be discounted. He warned contractors considering the home automation market to make a firm decision and stick with it.

“You have two choices,” he said. “Either get in all the way or stay out of it, because if you just dabble at home automation, you are not going to understand the technology enough to be successful.”

Supply and Demand for Smart Products

There is more to placing a new product into a business’ offering than deciding to sell it. A strategy is often developed to educate the staff on how to install and service the item. Contractors also have to put procedures in place to deal with any problems that arise. For products connecting to the internet, which is a large portion of them, connectivity and networks come into play. Contractors have to decide how far they are willing to take ownership of the product and the peripheral technology required to make that product function correctly. Christopher Roth, president and CEO of Climate Control Experts, Las Vegas, advises that despite the challenges, contractors shouldn’t be afraid to engage these new products.

“Get educated,” he said. “Our customers want these products and will find them elsewhere if we don’t offer them.”

His company has customers requesting home automation products, and he in turn has begun to promote a number of connected home products that the company feels adds value for its clients.

IT’S ALL CONNECTED: The Internet of Things gives a voice to inanimate objects allowing them to speak data via the internet. Remote and voice control are natural progressions of this technology as the connected capabilities are leveraged.

Moon’s company is concentrating primarily on smart thermostats right now as its gateway to the Internet of Things (IoT). It has yet to broach the idea of automated lighting or window shades, but people are interested in these items, he said. The market in his area isn’t stimulated to the point where people are asking for the extras, but the smart thermostats are moving closer to being expected as opposed to being an add-on.

“Companies like Nest are doing a great job of advertising their thermostat,” said Moon. “They sell them all over the place, but they do not connect them to your system. That takes a professional because you’ve got to put resistors in there.”

According to Moon, this is a pain point for a customer and a place of opportunity for contractors to add to their client list. Although not experiencing the high demand for IoT products in his area, he is still considering putting one truck on the road that handles all of the home automation products in order to start offering more of them.

In San Antonio, Texas, Michael Rosenberg, president of Rosenberg Indoor Comfort, is seeing an increased demand not only for Wi-Fi thermostats but also for water leak detection devices equipped with sensors and communication ability.

REMOTE CONTROL: The more machines and appliances connected to the internet via Wi-Fi, the more control end-users can have of their home or office, even from their smart phones.

“On our commercial side of the business, we install energy management systems for buildings,” he said. “These systems utilize Wi-Fi to connect to the internet, which allows a property manager or building owner to access the system to view current supply temperatures, space temperatures, and equipment errors.”

Energy management for buildings coincides with Wi-Fi thermostats, allowing for customized away programming and features that allow building managers to monitor and adjust the building’s energy usage.

“This can be set up far in advance; all major holidays can be programmed at the beginning of the year so that the air conditioning or heating is not running in the building on those days where there are no people,” said Rosenberg. “This can save your customers money on energy. The same concepts can be set up for a home if you know in advance when you are going to be on vacation.”

Internet of Things and the Bottom Line

Adding to the bottom line isn’t the only reason that contractors offer new products, but learning how to adjust margins while meeting demand can be an important strategy for the HVAC industry as IoT products flow into the market.

Roth explained that some of these products, like the Nest thermostat, are offered in the retail space. This can lower the margin that contractors are accustomed to, he said.

“Therefore, we have to take a slightly different approach,” explained Roth. “My company doesn’t promote these items separately; instead, we add them to all service offerings. That way, we can build a ticket and add gross profit dollars through the promotion of these products.”

Moon cautioned the industry, including vendors, to not take a “wait and see” approach to the addition of IoT products for the home and office.

“The HVAC industry can be a slow mover to change, and our HVAC guys need to get on board,” he said. “This is coming, and people want it. In about five years, it is going to be hard if you don’t have these products to offer. There’ll be a hole in your business, and you’ll be introducing your competitors to your customers because you don’t know how to do it.”