HVAC Predictions for 2016
People outside the industry always ask me how HVAC has enough new information to fill a magazine every week. It does and then some.
2015 was a busy and exciting year for the HVACR industry. It started with the biggest AHR Expo ever held in Chicago with almost 62,000 industry folks gathering at the annual event. It was cold, but the industry was in a good mood, and a lot of new products were introduced. The good vibes did not last long, though, as the U.S. Department of Energy (DOE) left the proverbial turd in the punchbowl by proposing a national 92 percent AFUE standard for all new furnaces. Never mind the fact that a fair percentage of installs would never have a positive payback over the lifetime of the furnaces. While 121 members of the U.S. House of Representatives sent a letter to the DOE last summer urging them to reconsider, the issue has been hanging over the industry for the entire year. It is not a good idea, and the industry is coming together, yet again, to rally against the government.
There is some more good news. While the final numbers are not yet in, through October, central air conditioner shipments were up a little over 2 percent, while gas furnaces were up more than 5 percent — maybe not exactly as high as some were anticipating, but it certainly beats the alternative. The big jump was in oil furnaces, which saw an increase of almost 8 percent. This is no doubt due to the lowering of oil prices.
But enough looking back — time to look forward. Here are my predictions on what will happen to and in the HVACR industry in 2016. Please toss this article away immediately after reading so I will not be held accountable for these proclamations.
• The 30 percent federal tax credit for residential geothermal installations that are set to expire at the end of 2016 will be renewed next year for four more years. Those lobbying on behalf of the geothermal industry are arguing that, since the credits were enacted right before the great crash of 2008, the industry has not really been able to use them to their full ability until the recent turnaround of the construction market. This is a solid argument, and one that seems to be gaining a great deal of traction in Washington.
• The smart home momentum will continue to build. A recent survey showed 28 percent of homeowners own at least one smart home product and 91 percent of those people would recommend the technology. Smart thermostats already account for more than one-half of the smart home devices in U.S. homes. The smart home market was an important one to HVAC contractors in 2015, and I only see that continuing to grow in 2016. Get on the bandwagon.
• The industry will continue to unite against government over-regulation. That being said, I don’t see the 92 percent AFUE furnace standard coming to fruition. I believe cooler heads will prevail and the industry and the DOE will have a meeting of the minds. A guy can dream, right?
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• The HVAC industry will continue to make a significant investment in training. I wrote about this a couple of weeks ago. Manufacturers like Emerson, Johnson Controls, LG, and Daikin recently opened up new state-of-the-art training facilities. This is good for HVAC contractors and, ultimately, consumers. I see this trend continuing and also helping the industry recruit the young talent that it desperately needs.
• Service World Expo — a joint venture between The NEWS’ parent company BNP Media and Service Nation — will be a great success that brings a tremendous value to hundreds of contractors. Want to learn more? Check out www.serviceworldexpo.com. I am a company man.
What are your industry predictions for 2016? Email me at kylegargaro@achrnews.com and we will find a place for them in a future print edition.
I hope all of our readers have a great holiday season and a very prosperous 2016.
Publication date: 12/28/2015
