This year is sure to be a transitional one, and 2022 will reveal trends for the high efficiency Heating, Ventilation and Air Conditioning (HVAC) industry that align with many of the global economic trends. Labor shortages, supply chain challenges, chip shortages and inflation are impacting the home improvement industry across the board.
Homeowner spending is shifting from where it has been in the last two years. Consumers have a pent-up desire for travel, recreation and leisure for this transitional, (hopefully) post-pandemic year. Where they were investing in home improvements in 2020 and 2021, they may now be looking outside of the home for their spending as travel continues to open up.
And, of course, with other economic trends and advancements, technology makes no plans to slow down.
We’re taking a look at how these more global trends — and how HVAC specific trends — are shaping up for 2022.
Internet of Things (IoT) is still a trend for the high efficiency HVAC industry
Price increases demand a better understanding of homeowners’ financing ability
Focus on indoor air quality
Focus on educating, training and hiring skilled labor
HVAC contractors will look to specialize as they grow
1 – Internet of Things (IoT) is still a trend for the high efficiency HVAC industry
Smart home connectivity continues to reach new devices in homes, and the ways in which these technologies evolve expands even more.
“In 2020, the number of connected IoT devices used was 11.3 billion. According to IoT Analytics, the global number of linked IoT devices will reach 27 billion by 2025,” reports The Business Research Company.
Consumers seek to regulate comfortable and appropriate temperatures in their home — and save money. Devices like virtual assistants, smart speakers and remote access applications empower homeowners to operate their high efficiency HVAC systems in alignment with their lifestyle without sacrificing energy and cost savings.
Some smart devices even learn homeowners’ lifestyles without programming temperatures and timing. Others help consumers allot and track optimal usage for a savings goal — giving more control and data insights to consumer energy spending.
Advancements in smart technologies for high efficiency HVACs will continue to evolve in 2022 as a key industry trend.
2 – Price increases demand a better understanding of homeowners’ financing ability
Services and goods across all items of the Consumer Price Index rose in 2021, according to the U.S. Bureau of Labor Statistics. This includes gas, water, vehicles and utilities. With the pent-up demand for housing projects that had been put off in 2020 and the significant labor shortages, inflation continues to impact the high efficiency HVAC industry.
Inflation is expected to continue throughout 2022, and consumers and contractors alike will need to adopt approaches that help them weather the cost increases. A few key ways to build inflation resiliency are:
- Know and understand the energy cost savings of high efficiency HVAC systems and how they offset the expense of a new unit. The long-term savings can help to justify a new purchase and installation in the midst of inflation.
- While it may seem counterintuitive, upgrade to a higher quality HVAC unit. According to Mischa Fisher, Chief Economist at Angi, costs have risen in lower quality, imported products more so than higher quality, domestically manufactured options. In cost comparisons, consumers may be able to afford higher quality or more efficient features than they may have believed.
- HVAC contractors need to adopt a good/better/best approach to presenting high efficiency options and associated financing. When HVAC contractors identify a client’s buying ability upfront, they can be outfitted with the best HVAC within their means. This requires that HVAC contractors embrace fees associated with finance as overhead and include it in their pricing. Once this approach is understood and embraced, contractors won’t lead with cash pricing. The focus instead becomes on how to make the highest quality unit most affordable for the homeowner — and that most often comes with specialty financing.
3 – Focus on indoor air quality
The air we breathe is no doubt on the minds of consumers after years of an airborne illness wreaking havoc on our well-being and overall lives. One way to mitigate these types of pathogens is proper ventilation. Additionally, indoor air quality and purification are vital to the reduction of dust, allergens and VOCs.
“The U.S. air purifier market size is anticipated to reach USD 4.19 billion by 2028, registering a CAGR of 8.6% over the forecast period,” according to a ResearchAndMarkets.com report.
Schools and commercial spaces have had to seek optimal ventilation in order to keep both employees and families well. The desire for improved and optimal air quality extends into the residential, high efficiency HVAC systems market as well. From activated carbon, HEPA, ionic filter technologies, we can expect this to remain a growing trend for the high efficiency HVAC industry for quite some time.
4 – Focus on educating, training and hiring skilled labor
According to Liza Hausman, vice president of industry marketing at Houzz, more than half of homeowners took on projects themselves in 2020. But as people become more comfortable having others in their homes again, the demand for professional contractors will increase 60%, according to Takeaways from the 2021 Home Improvement Insights Summit by the Home Improvement Research Institute.
Labor shortages will continue with many HVAC contractors coming into retirement age and fewer people entering careers in skilled labor.
“These challenges are seen in the 52% of tradespeople who say a lack of available workforce is stunting their growth, and the 68% who say that they could grow their business if they could find more available workers,” as reported by Angi’s 2021 Skilled Trades Report.
There’s also good news for high efficiency HVAC business owners. The Angi report also found that “job satisfaction remains remarkably high, with 83% of tradespeople either somewhat or extremely satisfied in their choice of work.” Broadly communicating this job satisfaction will be vital in recruiting, training and retaining talent in the workforce.
5 – HVAC contractors will look to specialize as they grow
High efficiency HVAC contractors, along with nearly every other home repair service business, are looking for ways to maintain profitable margins despite inflation on parts, materials and units. In this tight market, contractors have an opportunity to specialize their services.
HVAC dealers may choose to specialize by brand, technology (i.e., geothermal or splits) or product class (i.e., good/better/best) to get the best buying power.
Choose a finance partner for this transitional year
Global and domestic economies will experience 2022 as a transitional year. Inflationary pressures supply chain and skilled labor shortages will continue to impact the high efficiency HVAC industry. Offering financing options through a company like Mosaic can make it easier for HVAC contractors to offer their customers a range of products with different price points and SEER scores — and make improved comfort and energy savings more accessible via affordable monthly payments. This immediate access to flexible funding options at the point of sale will be essential for HVAC businesses during a year of change.
Home Improvement Loans through the Mosaic platform are made by WebBank, Member FDIC, Equal Housing Lender.