The heating, ventilation and air conditioning (HVAC) industry experienced a volatile year in 2021 in light of price hikes, labor shortages and big swings in customer sentiment regarding the air they breathe. While several of these trends persist, the industry is experiencing new growth in 2022.
As the industry evolves, smart technology, healthy home solutions, sustainability and eco-friendly systems and products are at the forefront of conversation.
What is Trending in HVAC?
Being aware of current HVAC industry trends can help various channel stakeholders—from manufacturers and distributors to contractors, installers and repair/maintenance service providers—properly strategize for the future.
Here are a few key trends to monitor as you seek new business opportunities in the coming years:
1. The HVAC Industry Will Keep Growing
The HVAC industry is growing. HARDI, for instance, saw annual sales in 2021 grow by 23.6% according to ACRH News. Secondary research prepared by GrandView Research is projecting a CAGR of 6.3% for the HVAC industry in 2022 through 2030.
For businesses at different levels—from manufacturers to installers and other service providers—ensuring you have the right infrastructure and software to accommodate industry growth in the coming years is vital to scale your operations accordingly. Fast growth can be the downfall of companies if not accounted for wisely through every facet of the business operations.
Online business and project management tools can help companies at every level stay on top of customer service, technical support, human resources, and enhancing sales as the industry shifts and expands. Now more than ever, lines of communication need to be shortened and collaboration deepened.
Additionally, as you look to add to your employee pool, you’ll be courting millennials and younger demographics, to whom company culture is key. Businesses need to adopt practices and policies that align with the communication preferences, goals and work-life balance prioritized by younger generations.
2. Price Hikes Creating a Push for More Domestic Manufacturing
One main pandemic-related trend we’ve witnessed in the past year is a notable price hike for HVAC parts, repairs and services. This is due in part to rising transportation and shipping costs for suppliers along with the lack of availability for raw materials and commodities. Add to that industry-wide labor shortages, and we have the current situation, which is a bit unpredictable. An upward pricing trend is anticipated through 2022, which inevitably impacts a variety of current channel stakeholders.
These supply chain challenges have contributed to an awakening of sorts to the need for “re-industrializing” the American economy and bringing some sectors of manufacturing back domestically. It will take more than a handful of years to see bigger changes in this arena, but the indicators of a shifting tide are appearing. Several state legislators are working to make manufacturing more feasible and their state the most appealing for companies.
This push towards more domestic manufacturing is one of the forces driving the expected 6.3% CAGR for the HVAC industry over the next decade.
3. Customers Care More About the Air They Breathe
Another outcome of the COVID-19 pandemic has been an increased focus on constructing or remodeling homes with inhabitant health and wellbeing top of mind. HVAC systems are an integral part of creating a healthy home and promoting occupant safety and wellness.
Nearly 36% of homeowners we surveyed for our 2021 Healthy Home Report indicated that they plan to complete a project to replace old or non-existence HVAC components with high-efficiency HVAC components.
63% of homeowners and 54% of renters are most concerned about the indoor air quality of their residences as documented in the Healthy Home Report.
As the Build-to-Rent trend also continues to grow, greater emphasis will be placed on which HVAC components are integrated into the build, retrofit, or remodeling project by investors looking to cash flow effectively and quickly on their real estate investment.
4. Contractors and Channel Partners Need More Training
Despite a shift in customer demand for greater focus on HVAC innovations in their homes, the majority of contractors have not participated in training or certification programs offered by the Indoor Air Quality Association (IAQA). Only 36% of contractors have any training or certifications in the HVAC arena.
This knowledge gap represents a large opportunity for HVAC manufacturers to introduce educational programs that better equip contractors to serve customer preferences. This knowledge gap also indicates that there is room for manufacturers to directly reach end customers (Pros and DIYers alike) with educational materials, especially through leveraging platforms like YouTube with educational videos.
5. Digital Connectivity is Here to Stay
By this point, it’s clear the digital world has influence over how customers shop and what they shop for. Many people do online research when looking for new products or finding a service provider to install or repair an HVAC system.
Additionally, automation and Wi-Fi enabled household appliances are becoming more of the norm, as homeowners seek connectivity and cohesion among their smart technology. They want more control over their home’s energy output, humidity levels and airflow with features like remote temperature adjustment, self-regulation, sensors and more. Manufacturers should consider these trends when developing new products and selecting channels for distribution.
That being said, consumers still desire a personal touch and will seek information from sales and service reps as they make final decisions. It’s important to have employees at various levels with knowledge to communicate about smart products and systems and even how to install them. The data-collecting component of smart technology can also help HVAC technicians quickly identify and repair issues to minimize downtime and better serve clients.
6. The Strive for Sustainability
Green consumerism is on the rise, particularly in the HVAC industry. Homeowners are increasingly concerned about the environmental impact of their products.
According to GlobalWedIndex, a majority of consumers are willing to pay more for eco-friendly solutions. Two of the top concerns for households—and commercial building owners to some extent—are reducing energy consumption and minimizing carbon footprint.
As you strategize for the future of your business, efficiency and eco-friendly solutions are critical components to consider. Take Chromasun, for example. This Australia-based manufacturer is working on energy efficient chillers that utilize solar and gas panels. With fewer moving parts, the products are more durable and less prone to breaking down.
Additionally, households in the U.S. can still claim a Residential Energy Efficiency Property Credit for the installation of solar, wind, and geothermal equipment in their homes. The credit is set at 26 percent of total cost, including installation, through 2022, and then steps down to 22 percent for 2023. At that point, the credit is set to expire. We will likely see homeowners striving to take advantage of this credit before the end of 2023, which could lead to geothermal heat pumps and other eco-friendly HVAC technologies growing in demand.
7. New HVAC Technologies Emerge
Smart and eco-friendly technologies tend to dominate the HVAC industry in terms of what’s new or emerging. For example, building automation systems (BAS) are rising in demand as they offer commercial and residential property owners convenience and energy-saving capacity. These systems, which may perform different functions or monitor different conditions, can effectively communicate with one another to regulate interior humidity levels, temperature and other elements.
In 2022, we’re also seeing an increase in ductless HVAC systems that are suitable for updating older buildings as well as incorporating into modern infrastructure. They are easier to install and maintain, while simultaneously distributing hot or cold air more evenly throughout a building.
What is the Future of Your HVAC Company?
You need to know where the greater HVAC market is going, by what forces, and what hurdles are preventing forward progress. Beyond general industry forecasting, you need to understand your brand’s position in the market and commit to making informed decisions during quickly changing times. Learn more about the four buckets of custom research The Farnsworth Group conducts to provide actionable insights for home improvement and building products companies exclusively.
