The HVAC Sector Deals with a Rapidly Changing Landscape
The HVAC sector is in a bit of turmoil. That’s understandable: Just about everything it deals with is changing. The reassuring news for the industry is that three pieces of research suggest that it is keeping up with these rapid, roiling shifts.
Infiniti Research, in a report released this month, painted a picture of an industry in transition as two trends — new technological approaches and demands for energy efficiency — work in parallel to usher in a new generation of equipment. The firm found that the global HVAC market grew at a compound annual growth rate (CAGR) of 7 percent.
The firm found that construction in the residential, commercial and industrial sectors all are on the rise. At the same time, a worldwide trend toward regulations mandating greater energy efficiency is encouraging proactive purchasing and installation of equipment that satisfies those requirements. The growth of intelligent buildings is expected to further drive change in the HVAC market.
The second piece of research — released in August by Chisult Insight Co. Ltd. — found that the year ahead would feature above-average growth and that the United States had the best fundamentals in place than it has for more than a decade. Those fundamentals – higher employment, lower gas prices and growing consumer confidence – are especially pronounced on the residential side. On the commercial side, Chisult calls for 5 percent growth in the 2015/2016 based on 6 percent to 7 percent growth in the nonresidential construction market.
One of the emerging stars of the HVAC market is variable refrigerant flow (VRF), which uses a refrigerant that is cooled or heated by a single outdoor condensing unit. ARCH News posted a feature tracing its growth in the North American market. A Haier America senior product manager is quoted as saying that VRF initially gained traction in Asia, Europe and South America but is making a move in the United States.
The piece quotes Jade Culbertson, the national sales manager of ECOI/VRF solutions for Panasonic Heating and Air Conditioning Group on the nature of the North American market:
Culbertson noted the commercial market is the largest sector for growth as manufacturers develop products with larger indoor air-handling capabilities, fresh-air solutions, and integrated control systems. The residential market is growing, but mostly in multifamily installations where efficiency, space, and amenities are paramount in the designs, he added.
The third and most granular research is the October results from The Air-Conditioning, Heating, and Refrigeration Institute (AHRI). The data tells an interesting story of overall growth – but momentary hesitation. Shipments in four areas were weaker in October 2015 than October 2014: Residential storage water heater shipments decreased 21 percent; commercial storage water heaters decreased 1.3 percent; warm air furnaces decreased 1.6 percent and central air conditioners and air-source heat pumps decreased 8.5 percent.
However, each category’s shipments were up in year-to-date numbers. Residential storage water heats increased 0.8 percent, commercial storage water heaters increased 1.6 percent; warm air furnaces increased 4.9 percent and central air conditions and air-source heat pumps increased 1.1 percent.
Change will continue. This summer, The Commercial Packaged Air Conditioners and the Commercial Warm Air Furnaces Working Group reached agreements on efficiency standards, test procedures and metrics, according to Contractor.com. The story says that the negotiations, which were led by the U.S. Department of Energy, involved equipment manufacturers, contractors, installers and others. The group was aggressive, according to the story:
The new standards will save almost 15 quadrillion BTU (quads) of energy from more efficient equipment shipped over the next 30 years. To put the agreement in perspective, many DOE standards lead to savings of 1 quad or less. 15 quads equals almost as much energy as in all the coal burned in the United States to generate electricity in a year.
Marianne DiMascio, the Outreach Director for the Energy-Efficient Economy’s Appliance Standards Awareness project, told Energy Manager Today that final rules from the DoE are expected soon. The rules, if adopted, will be something of a milestone for those concerned with HVAC issues. “A savings of 15 quads over 30 years of sales is very large,” DiMascio she wrote. “It will be the biggest set of rules issued by the DOE Appliance Standards Program.”
The impact will be big. “Building owners potentially could see significant savings over the life of the one rooftop air conditioner, for example. They often have multiple rooftop air conditioners which will add up to greater savings.”
Nowhere are the changes buffeting the energy industry more pronounced than in heating, ventilation and air conditioning. Indeed, during this period of transition it seems that more things are different than are the same. However, change brings great opportunity. The category seems to be experiencing moderate growth overall.
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