With the AHR Expo in Atlanta just a week away, The Climate Control Group COO Kevin McNamara met with The ACHR NEWS and other members of the trade press to give an outlook on the 2023 HVAC industry. Following are his answers to three of the HVAC industry’s most pressing questions.

Please give us an economic outlook on the HVAC industry for 2023.

McNamara: There is some concern with interest rates and inflation. We will need to see where the economy is going to go. There is some hesitation on some projects that we have seen that there will be a bit of a delay. But we have a very robust backlog. On the residential side, we are seeing a significant decrease off of all-time highs as far as housing construction is concerned. I think multifamily will continue to be strong. A slowdown in new home construction means shifting more towards a replacement, retrofit, or repair mode. We are well positioned on all three of those from a business perspective. My personal opinion is I really feel like we have tried to talk ourselves into this [recession] in a lot of ways. But at the same time, we have to be aware that there are forces out of our control at work economically that will have an impact on us.

Unlike solar products, geothermal is effective in all climates. How can a residential HVAC contractors begin to add this technology to their offerings?

McNamara: What is very important for a contractor is not only the relationship that they would have with a local distributor, but also having a relationship or having a network that includes the drillers who actually do the geothermal part of the installation. So from a contractor perspective, I think it is being knowledgeable of what the tax credits mean to a homeowner and to be able to have that conversation. I think it also depends on what part of the country you are in. Obviously there are stronger geographical sections of the country where there are even more benefits of geothermal and — it is possible — a little more accepted. The bigger issue, though, is the connection between the distributor and the contractor who is doing the majority of the install along with the driller.

Let’s also put into context that the rebates do bring more cost parity against all other products that you could think about installing in a residential application. So we are pretty bullish on where geothermal is going to go residentially, for sure. And we are also optimistic on the commercial side.

Any predictions on how quickly decarbonization will occur in regards to regulatory and legislation action at the federal and state level?

McNamara: The genie is out of the bottle on that one. California and the state of Washington have moved very quickly into decarbonization. A number of companies have taken it upon themselves to be leaders in the electrification area. So there has been a significant growth there.

Of course, that has moved to the east coast, as most things out of California generally do. I don’t think there is anything to slow decarbonization down. I can only go with what we have right now, which is most of these things that are good for the environment and address a lot of other issues as far as buildings are concerned do start on the west coast, jump over to the east coast, and then come back into the middle of the country. We are going to have to watch. But the federal government right now … not to be political, but the separation between the Senate and the House, as far as getting legislation passed, would make it tough. It would really take the EPA or some other government agency to try and make some big move to implement something like that on the federal scale. There is a lot of activity, and it is just going to build more momentum. Especially as we see municipalities, counties, and states limit the use of gas in buildings and homes.