The HVAC Market in the US: An Expert's Perspective

The US government has implemented several incentives to promote the use of energy-efficient products and renewable energy sources. Tax credits, for example, offer up to 30% of the installation cost for energy-efficient products. The New Jersey government's CoolAdvantage program provides tax credits and discounts for the installation of energy-efficient central heat pumps or air conditioners (AC). These monetary programs and favorable government support will help drive demand for HVAC products in the long term.

According to a report released by the US Department of Energy, more than 70% of American homes have air conditioners installed. This means that OEMs have more than 20 to 30% market opportunities in terms of sales of new units, as well as the upcoming replacement demand due to old products. Statistics suggest that, on average, 2 to 3 million heating and cooling systems are replaced in the US each year. In addition to the demand for new and replacement parts, maintenance and repair activities will also see an uptick. Frequent cleaning to prevent damage or failure throughout the system is another potential source of income for existing OEMs.

In the same way, replacing parts and components, such as engines, coolants and filters, due to their shorter lifespan, will also help OEMs thrive in an otherwise competitive industry. Research suggests that more than $10 billion is spent each year on repair and maintenance services for air conditioning systems. While this could create a potential growth area for OEMs by expanding their service offerings along with products, it could also pose a challenge for product sales. Some key players operating in the US air conditioning system market include Johnson Controls International plc, Carrier Corporation and Daikin Industries, Ltd. How has COVID-19 impacted this market? The global construction industry has been seriously affected by the suspension of construction activities due to the pandemic. Labor shortages, together with potential material and equipment problems in the supply chain, are expected to cause delays in ongoing funded projects and may lead to reduced spending on upcoming projects.

The air conditioning industry has also been negatively affected by the COVID-19 outbreak due to the closure of several component manufacturing facilities in China, European countries, Japan and the US. The lockdowns imposed by governments have not only affected manufacturing but have also reduced consumer demand for air conditioning equipment. Heat pumps are a cost-effective solution with a limited budget for homes and government institutions such as schools, universities and offices; unlike traditional methods of generating heat directly, such as an oven or electric boilers, heat pumps transfer heat between outside and inside. The system does not require any fossil fuel to burn and can provide heating or cooling using only electricity. Heat pumps can also work in reverse to extract heat from inside a building and transfer it to the outside, providing cooling during the warmer months. This is a more energy efficient method of cooling compared to traditional air conditioning systems.

The increasing attention paid to green energy and environmental sustainability translates into greater adoption of these systems (which help reduce energy consumption) and related services (which ensure the efficient and trouble-free operation of these systems). End users are aware of the need for qualified technicians to check their systems since any error during the installation or repair process can cause permanent damage to the systems and generate high costs. Therefore, US homeowners and business owners prefer North American Technician Excellence (NATE) certified technicians for these services. NATE is a not-for-profit certification organization that evaluates and validates the professional competence of technicians. For air conditioning systems to work efficiently they need to be cleaned regularly and it is recommended to replace the filters every year.

In some service contracts service is provided biannually or quarterly depending on the lifespan of the system, number of end users, and operating time. In addition many contractors offer discounts when a user uses an annual plan. Require maintenance of air conditioning systems primarily for energy savings, cost savings, safety guarantees, improved performance, improved efficiency, improved comfort levels, improved indoor air quality, improved reliability and extended life expectancy.

Mario Mcgorry
Mario Mcgorry

Award-winning twitter guru. Award-winning tv scholar. Unapologetic internet advocate. Lifelong twitter lover. Friendly internet nerd.

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