As 2017 comes to an end, a look toward what awaits HVAC contractors in the coming year is due.
Over the course of this year, HVAC contractors have had to comply with a number of new regulations — the first round of limitations in the use of refrigerants, updated energy conservation standards for residential central air conditioners and heat pumps, as well as Occupational Health and Safety Administration fall protection standards.
In 2018 HVAC construction contractors can expect more regulations to come into force — the second round of limitations for HVAC refrigerants, as well as the so-called rooftop units regulation. Contractors also need to be aware of the Department of Energy's final report on regulatory review, which it published Oct. 25. The report contains suggestions which could lead to a revision of regulations and standards that directly concern contractors.
Read on to find out more about the regulations that contractors will need to comply with in the coming year, as well as the trends and challenges for the HVAC industry.
Second stage of refrigerant use limitations
As of Jan. 1, 2018 technicians of refrigeration equipment will need to comply with the next set of limitations in their use of ozone-depleting substances (ODSs).
After that date, ODSs and substitute substances. such as hydrofluorocarbons (HFCs), can only be sold by certified technicians. In order to become certified, technicians will need to pass a certification exam allowing them to handle these substances. They will also be required to keep exact records when disposing of equipment containing five or more pounds of refrigerants.
A detailed list of types of technician certification as well as certification test topics, can be found on the U.S. Environmental Protection Agency's page dedicated to those topics.
New Efficiency Standards for Rooftop Units
Also on Jan. 1, HVAC manufacturers of commercial air conditioners and heat pumps, and commercial warm-air furnaces, will also need to comply with a new set of efficiency standards for the equipment they produce. These standards have been mandated by the Energy Department.
As of that date, a 10 percent reduction of the energy consumption of new rooftop units will be in place. This reduction is the first phase of a two-stage process. The second stage, in 2023 will require equipment to offer a 25-30 percent reduction in consumption. By 2023, manufacturers of warm-air furnaces will also need to offer a 25-30 percent reduction of energy consumption of their units.
For HVAC sales technicians and contractors this means learning to work with new and different types of equipment, as well as preparing to install new equipment or retrofit old equipment in order to bring it up to new standards.
Final report on regulatory review
On Oct. 25, the Energy Department published a final report on its regulatory review based on an executive issued by President Donald J. Trump in March. The report reviews four areas related to the development or use of domestically produced energy resources, out of which appliance standards receive the greatest focus and recommendations.
The report's main aim with regards to appliance standards is stated as addressing what is seen as a system of perpetual rulemaking by businesses in the industry that forces them to continually adopt new standards. The recommendations made in the report are yet to take shape and be turned into particular decisions and regulations. When that happens, though, HVAC contractors may also see changes that will reduce the amount of rules they need to comply with.
In terms of employment, the HVAC, sheet metal works and plumbing industries are expected to grow within the next 6 years. One of the greatest challenges still faced by both of these sectors is the lack of skilled workers to meet rising demand.
Along with growth in employment, demand for HVAC and plumbing services is also expected to increase as residential replacement rates are finally also growing. This is paralleled by increases in construction which, too, will create demand for HVAC and plumbing services.
On the manufacturing side, the residential market for HVAC equipment is also expected to increase. According to a report by Freedonia group, it will outperform the commercial market with regards to growth, though it will still remain the smaller of the two markets by volume.
The whole HVAC equipment market is expected to grow at a rate of 3.4 percent between 2017 and 2022, reaching an estimated $17.5 billion.
With promises of economic growth, the main challenge that HVAC contractors and manufacturers will face is intensified technological competition. From connectivity with embedded intelligence, and achieving savings with wireless data to retrofitting with smart technology — all of these will challenge the HVAC market to expand beyond its capacity.
As competition tightens, obtaining industry certification and being up to all legal and market standards is also a must. Consumers are becoming increasingly savvy and would often do an online check to verify the contractor is licensed and in compliance with their bonding requirements.
As demands and challenges increase, anything in terms of competency that can set a contractor apart will be key in getting more work in.
Are there any other important regulations or trends and challenges for the HVAC sector that you would add to the above? What are your observations about the market, and what do you expect to see in the coming year? Leave us a comment.