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Bryan Orr, host of the popular HVAC School podcast, once again moderated a panel discussion at the AHR Expo about the current and future state of affairs in the HVACR industry. Experts on the panel included Stephen Yurek, president and CEO of AHRI; Talbot Gee, CEO of HARDI; Dominick Guarino, CEO of National Comfort Institute (NCI); Ginger Scoggins, president of ASHRAE; and Greg Walker, CEO at the Association for Smarter Homes and Buildings (ASHB).

A wide variety of topics were discussed during the session, including the refrigerant transition, workforce training, and the push for the adoption of heat pumps.

Heat Pumps

As part of the decarbonization trend, federal, state, and local authorities are encouraging Americans to transition from fossil fuel-burning furnaces to electric heat pumps. That can be a tough sell, though, so Orr asked the panelists for their advice on how contractors can help make heat pumps a more attractive option for customers.

Yurek answered, “Everybody keeps saying that heat pumps are some great new technology, but we've had heat pumps in the United States for decades. The issue is looking at it not just for comfort cooling, but also for comfort heating. With that, contractors have this great opportunity, because not only are they going to be replacing equipment — due to the huge replacement market in the U.S. — but it's an opportunity to educate consumers on what's out there.”

In addition, there is more to just replacing a gas furnace with a heat pump, as contractors need to assess the entire building's envelope, including windows, insulation, and roofing, said Yurek. Merely replacing a furnace or boiler won't guarantee comfort if the overall structure isn't improved, he said, adding that contractors should educate consumers on comprehensive solutions that prioritize comfort and efficiency.

“Most of the time, it’s an emergency situation, where customers have no heat, no cooling, no hot water,” said Yurek. “So, selling maintenance contracts, being in that customer's home on a twice-a-year basis to work with them and educate them will help when they have to make that decision when they have no heating or cooling.”

Although heat pumps are a wonderful technology, they are not the only solution for every application, added Gee. And while there are growing opportunities for heat pumps, he emphasized that certain market segments will maintain a demand for gas-fueled products, which is why hybrid solutions should be considered.

“The hybrid solution is not just an environmental strategy, it's a business strategy for how contractors can stretch out that relationship and keep doing business with those customers over multiple years rather than just the one-and-done,” said Gee. “There's an opportunity here to create real long-lasting relationships with customers, especially customers who maybe are highly motivated to try to fuel switch but may have some sticker shock, because this is not a cheap industry.”

In these cases, Gee suggests putting customers on a plan, so maybe it starts by converting their air conditioner to a heat pump but keeping the gas furnace as a backup. Then in five or eight years, the customer may be able to phase out the furnace and or water heater.

“That way customers don't have to eat it all in one chunk,” said Gee. “I like it for the contractor, too, because that's a long sticky relationship with that homeowner. And residential new construction is low, existing home sales are rather low, and people are thinking longer term in where they are right now, due to high-interest rates and low inventory.”

Scoggins added that a hybrid option — also called dual fuel — can be quite effective, noting that, “electrification is a journey. It’s not going to happen overnight. Over time, we need to reduce our dependence on fossil fuels … but if you put in a heat pump and have a gas backup, you can at least cut your carbon footprint quite a bit until you get to the point where the heat pump is not effective. I think dual fuel is absolutely a bridge to the future.”

BIG ISSUES: Dominick Guarino from NCI and Ginger Scoggins from ASHRAE talked about some of the bigger issues facing HVACR contractors. (Staff photo)

Refrigerant Transition

Of course, top of mind for almost anyone in the HVACR industry is the HFC phasedown and the impending transition to mildly flammable A2L refrigerants, particularly in comfort cooling equipment. Orr asked the panel when the industry will start feeling the impacts of the additional 30% cut in HFC production that went into effect at the beginning of 2024.

“We've gone through other refrigerant transitions, but this is different, and we don't really know what it's going to look like,” said Gee. “The fact is, the supply, legal importation, and production of HFCs, is capped, finite, done. It's not changing. You're going to see the economic impact at some point in time this year. It will really depend on how much of those banks are used for production of any last new equipment versus going out into the field for service. That's a big question mark, because I think a lot of manufacturers are still trying to adjust and tweak their plans, but this year, you should be planning for it. And, again, if there's nothing else you remember from all this, the amount of refrigerant is not changing. There's no scenario where there's not an impact.”

As for when equipment containing A2L refrigerants will be available, Yurek said that it will be soon.

“In talking with our members, you’re going to see more and more equipment listed in the AHRI directory with these new refrigerants, probably even starting in the first quarter of this year,” he said. “Manufacturers are going to try to be doing this transition. They don't want to have a cliff where all of a sudden they have all these products on December 31, 2024, and then everything new on the other one. It will be available. But this also requires a change in the safety and building codes, and we've worked very, very hard with HARDI and others on getting this done.”

Gee added that in terms of storage and transportation, there has been a lot of positive progress in terms of changing the model codes.

“We've had some early test runs of getting the proper exemptions in local areas to be able to warehouse the refrigerants. There's no issue with the pre-charged product — that's all been exempted. As for transportation, it's very minor tweaks, so it's not going to require massive process changes for contractors out there.”

Given the ongoing phasedown of HFCs, Orr asked how critical it will be for contractors to recover refrigerant in the field so that it can be reclaimed and reused.

“It's really, really important,” said Yurek. “You have the environmental benefit, but another benefit is having a supply of refrigerant to service customers, so they don't have to purchase new equipment before the end of that equipment's useful life. We're still working with EPA to try and figure out what that process will be, but contractors should properly evacuate the refrigerant, collect it, and bring it in. Because the value of that refrigerant is going to increase.”

Gee added that non-residential HVAC contractors should be transitioning their customers to new lower-GWP systems quickly, due to the high costs of maintaining older systems. Residential contractors have more time, he said, but it's still important to responsibly manage refrigerants for legacy products.

“I personally believe we're going to end up in some scenario where there's going to be specific use requirements for reclaimed refrigerant,” he said. “Or there will be at least some ties to your ability to recover refrigerant, your role in the channel, your access to product, and that sort of thing. Frankly, I think there's going to be regulatory pressure to do it.”

INSIGHTS OFFERED: Greg Walker from ASHB (left), Stephen Yurek from AHRI (center), and Talbot Gee from HARDI offered insights on the HVACR industry at the AHR Expo. (Staff photo)

Workforce Training

Contractors are always looking for more technicians, and they often find them at local trade or vocational schools. These types of traditional programs are witnessing an influx of individuals seeking entry into the HVACR trade, noted Orr, but despite this, there remains a significant skills gap. He asked the panel how the industry can overcome this enormous problem.

Walker noted that ASHB is in the early stages of implementing an educational program, given the huge need for trained individuals in the intelligent buildings space.

“About a year ago, one of the main things that came out of a strategic session, was the need for education,” he said. “So we're implementing an educational program, hopefully in 2024, and we're still in the early stages about what that's going to look like. Some companies are having good success with donating products to colleges and universities, and we're thinking of doing something like that. Our board members would donate products, then we could either work with them on the educational program, or possibly work with contractors to provide more of an agnostic educational training around all the equipment manufacturers in the space.”

Guarino added that there's also a growing need to educate technicians on the safe handling of A2L refrigerants, and he encouraged manufacturers to update trade schools with current equipment. Distributors also play a crucial role in training contractors, he said.

“We have found the most efficient channel for getting training out to the contractors is through distribution,” he said. “They are the boots on the ground, and whether they do training themselves or host others coming in to for more advanced training, I think the more distributors get involved in this, it's going to really benefit our industry.”

Guarino pointed out that fast-track programs like Lennox's BuildATech offer an immersive training experience and that they are gaining traction. These types of initiatives are vital, he said, as many entering the HVACR industry are career changers (e.g., military), not traditional students.

“We do have some challenges,” said Guarino, “but if the industry comes together, we have an opportunity to really replenish our workforce, which we need to do, because we're losing people much faster than we're gaining them right now.”