Follow the money.
That is a phrase in the political world. It was popularized in the movie “All the President’s Men,” which was about the Richard Nixon Watergate scandal. Then, candidate Donald Trump used the same phrase to criticize Hillary Clinton and the Clinton Foundation.
However, it does not need to have a negative connotation. In the HVAC world, contractors can look at where manufacturers are investing and get a pretty good idea as to where the industry is going. Manufacturers are not devising business plans out of thin air — much research goes into exactly what technology the company should be investing most heavily in at any given time.
If you look at the news that has come out in the first couple of months of 2018, HVAC contractors should take a serious look at investing in ductless technology. First, Ingersoll Rand and Mitsubishi Electric Corp. announced in January that they entered into a 50-50 joint venture (JV). The JV will include marketing, sales, and distribution of ductless and variable refrigerant flow (VRF) heating and air conditioning systems through Ingersoll Rand’s Trane and American Standard commercial and residential channels and existing Mitsubishi Electric distributors and representatives in the U.S. and select countries in Latin America.
This is big news for the industry, as combining the Mitsubishi technology and the distribution of Ingersoll Rand opens up the ductless market to more people. Let’s be honest: This was Ingersoll Rand and Trane looking at the market and seeing a great growth opportunity in ductless. They needed a solid product to get their market share and found a willing dance partner in Mitsubishi. At the end of the day, it is an important investment by two respected HVAC manufacturers.
“Our current customer base has done a great job for us in building awareness of ductless and VRF and helping us establish a solid foundation,” said Mark Kuntz, senior vice president and deputy general manager of Mitsubishi Electric Cooling & Heating. “Our products are still largely used where a traditional product won’t work or in a unique niche application. This alliance leverages all that knowledge and takes it to the mainstream of the HVAC industry.”
The second big piece of ductless news was announced by Carrier at the AHR Expo, when its new 9,000 Btu, 42-SEER, single-zone ductless system was revealed during a press conference.
“This is the most efficient air conditioner you will see in the market,” said Meredith Emmerich, marketing director, Carrier Ductless and Variable Refrigerant Flow. “That is a pretty bold statement.”
The efficiency will help Carrier deliver greater flexibility to customers in colder climates. For example, the 9,000 Btu, 42-SEER, 15-HSPF single-zone system can provide 100 percent cooling capacity down to minus 22°F and 100 percent heating capacity down to minus 5°.
Again, another big manufacturer making a significant investment in ductless. That ductless market, which currently has about 8 percent of the overall market, is projected by some to capture about 15 percent of the market over the next five to seven years. The market has seen year-over-year double-digit growth for some time. In the early stages, it could be dismissed as a big jump based only on small numbers, but that seems to no longer be the case.
“The signal I think this sends to contractors is ductless is going to be a significant part of the market that they serve, and their customers will want to have the benefits of this technology,” Kuntz said. “With this alliance, they will have a broad spectrum of skills to help with those products. We are getting it into the mainstream and will hit a tipping point.”
For those contractors that have not looked into this market, it might be time to do so. Follow the money.
Publication date: 3/19/2018