Several trends are emerging in the HVAC (heating, ventilation and air conditioning) industry, from technologies designed to improve energy efficiency, reduce energy consumption and costs, to offerings that improve homeowners’ overall quality of life. Additionally, after spending more time at home, people are looking for ways to make their houses cleaner and more comfortable — and many are willing to pay more for the comfort, convenience and savings that high efficiency products and services provide.
Here are a few of the trends currently heating up this cool industry.
Trend #1 — Industry Growth
Growth in the HVAC industry is a trend in and of itself — Guidehouse Insights Residential Heating and Cooling Innovations 2020 report* projects the North American HVAC market will reach $75 billion in 2025 versus $56 billion as of 2019.
This demand is due to a variety of reasons. The country is experiencing hotter summers and colder winters, so homeowners are replacing their older HVAC systems with newer, more energy efficient systems to reduce energy consumption and costs, and make their homes more sustainable. Others may also want the improved indoor air quality a new system brings as a result of the COVID-19 pandemic. And the technology for home heating and cooling systems continues to evolve, which contributes to both increased consumer demand and the need for skilled HVAC technicians.
This industry growth requires not only motivated and well trained HVAC professionals — but more of them. High efficiency HVAC companies have to compete for that labor and need to adopt technologies and processes that streamline the onboarding process and consider ways to make the industry attractive for the new talent.
Trend #2 — Smart Technologies Require Advanced Technicians
With new technologies constantly emerging in heating, ventilation and cooling, HVAC companies have to stay savvy on how to convey the benefits of these features with consumers. The need for dynamic HVAC technicians increases alongside these evolving technologies. According to ARCH News, the demand for HVAC talent will continue to rise through 2026.
HVAC professionals will need to help homeowners understand which HVAC units, programmable thermostats and remote products are going to best meet their energy efficiency and economic goals. They’ll also need to help homeowners navigate how to afford high-efficiency units.
Investing in a new HVAC system can cost an average of $7,000, according to Forbes. These up-front costs can be a deterrent, and HVAC contractors will do well to adopt a consultative approach to help customers afford these new systems, including adjusting their sales pitch to a monthly payment versus a cash price. Monthly payments in general are a trend consumers continue to embrace — from monthly car payments to even financing smaller purchases like cell phones and exercise equipment. Likewise, home improvement loans enable homeowners to move forward with home improvements without having to put cash down upfront, and instead pay over time.
Trend #3 — Reduced Energy Consumption
It’s pretty clear that most consumers are willing to pay more for products that reduce their negative impact on the environment. According to Forbes, “…more than half of Generation Z (54%) state that they are willing to spend an incremental 10% or more on sustainable products, with 50% of Millennials saying the same. This compares to 34% of Generation X and 23% of Baby Boomers.”
And when it comes to greener appliances, the generations also agree. In a Remodeling article, 75% of millennials, 83% of Gen Xers and 89% of baby boomers want Energy Star® appliances, according to the National Association of Home Builders’ (NAHB) “What Home Buyers Really Want” report.
This increased sense of social responsibility gives HVAC contractors the opportunity to lead the way in helping to reduce energy consumption in homes. More and more homeowners express concerns about their footprint on the environment based on the products and services they buy.
Programmable thermostats with remote control and more high efficiency HVAC units empower homeowners to reduce their energy consumption and take control of their energy costs. This leads right into our next HVAC trend: long-term energy cost savings.
Trend #4 — Reduced Energy Costs
Forty percent of U.S. residential energy consumption is from heating and cooling the home, according to Guidehouse Insights Residential Heating and Cooling Innovations 2019* study. This represents a significant opportunity to save energy and money.
Installing a new high efficiency HVAC unit can result in a payback of five to seven years due to its efficiency in operating costs, according to Urban Green Council. And if the HVAC unit qualifies, the homeowner may also be eligible to claim federal tax credits equal to installation costs up to $500.**
Between reduced utility costs and qualifying rebates and tax credits, more energy efficient home improvements like high efficiency HVAC replacements can help homeowners realize significant long-term energy savings.
While a high efficiency HVAC system may initially be more expensive, it can ultimately help homeowners cut their annual energy bill by nearly $140, according to DoE. A critical component to help homeowners reach those savings is proper equipment repairs and installation. This is why the need for skilled HVAC professionals is so essential.
Trend #5 — Ease at Point of Sale
Though consumers are willing to pay more for home improvement repairs and HVAC upgrades that reduce their impact on the environment, they still want the purchasing process to be simple. That’s why technology is also crucial at the point of sale. Field reps need to be able to quickly and easily access customer data and expedite transactions.
Interactive payment estimators (like the one Mosaic provides to its partners) empowers both the contractor and customer to consider cost scenarios on the spot. So as quick as the technology can keep up with consumers demands, so must the skilled contractors who serve them.
Help your customers pay for high-efficiency HVAC replacements
According to a Modernize Homeowner survey, 63% of homeowners would consider using third-party financing for home improvement projects. With a diverse suite of financing solutions, the Mosaic platform is positioned to help HVAC contractors empower their homeowners to adopt high-efficiency HVAC units.
* Home Improvement Loans through the Mosaic Platform are made by WebBank, Member FDIC, Equal Housing Lender.