Duct Renovation Opportunites

Duct renovation has become one of the hottest topics in the industry today. Attention is being drawn to the substantial benefits it provides for both the contractor and the homeowner since the duct system often has more of an effect on system performance than the energy efficiency rating of the equipment.

The foundation for the excitement is so valid that it defies argument. Nearly 90% of new and existing duct systems have serious performance problems. Studies show that installed system performance hovers at or below 60% of rated equipment efficiency across the country. Equipment is rarely installed to a duct system that will allow the system to reach anywhere near the factory rated performance.

The problem is so widespread that I'm often asked why the push continues for higher equipment efficiencies when so few duct systems exist that will allow equipment to operate anywhere near its potential.

Savvy consumers, most often educated by contractors that excel in renovating duct systems, are able to figure out the efficiency game immediately. They choose to put their money into improving their duct systems first, and then consider the efficiency of the equipment. High-efficiency equipment on a bad duct system still equals bad performance no matter what the yellow tag on the equipment claims.

Inventory
The inventory of poorly-performing duct systems is so huge there is no longer hope of catching up. Once a contractor understands this concept of endless inventory it becomes easy to turn focus to fixing ducts.

Like most things that are good, system renovation needs to be sought after and pursued. It will not come knocking at your door and beg you to make some money with it. But with some awareness and an eye that is searching, soon you will see that you are walking a past duct renovation opportunity almost daily.

Consider all the condensing units that you replaced this summer. True, a condensing unit change-out is a high-profit opportunity and low-labor risk, and you would have to be crazy to miss the opportunity. But face it, the net margins are slim. Condensing units, air handlers, and furnaces are commodities. A half hour on the phone searching the Yellow Pages will reveal the price of that commodity.

Duct renovation is a new product that consumers need added to nearly every change-out. Contractors that offer this option report that a typical duct renovation with an air balance at completion sells for between $2500 and $3500. Direct costs for this work (labor and material) rest at between $600 and $1000, yielding gross margins in the range of 65% to 80%. That's a sweet add-on sale.

The truth is that we sometimes limit what we offer our customers because we almost feel bad that they have to spend the money. We place our customers in a difficult position when we do this, and it may hurt both of us. They don't get the benefits they want, and we come away without delivering what they needed and leaving money in their pockets that they are more than willing to spend if we only educated them to the facts of system performance.

When a major system component is replaced, this may be the first time a customer has given more than 10 minutes of continuous thought to his HVAC system in 15 years. This is the time to explore possibilities. Diagnostic testing reveals those opportunities. The customer is often in the best position to act on those repairs now, especially when his knowledge and awareness of the system is peaked.

Anyone who has performed diagnostic testing in the presence of a customer is aware of the persuasive nature of this educational experience. Consumers immediately recognize the value of improving the obvious defects they have seen revealed by the testing.

The Tools
You may refer to them as your toys, but the bottom line with even the most basic tools is that they allow you to see the invisible. Airflow, static pressure, temperature, power, and BTUs are all invisible. These are the foundation of efficiency and satisfactory system performance.

Manometers measure static pressure. If total external static pressure exceeds the manufacturer's ratings, fans are unable to move the required system airflow.

Data we have recently gathered in one state confirms that the average static pressure in systems rated at .50-in. measures more than .80-in. In blood pressure terms, that's 130 over 190 — time to check into the hospital.

It takes less than five minutes to effectively measure total external static pressure. System repairs that it generates include adding additional return ducting and supply ducting, cleaning coils, removing and replacing damaged and undersized ducting, as well as installing new filtration systems and replacing fillings and transitions.

Thermometers measure duct gain or loss. Simply measure the temperature of the air entering the return grille, and then measure the temperature of the air entering the return plenum. Is the difference more that 3 degrees? If so, you may have a problem your customers would have you fix. Eliminating damaged ducts or adding additional insulation where appropriate may often save far more energy than any high-efficiency equipment ever could.

Air balancing hoods are the best tool for revealing duct system problems. They're magic. A good hood makes invisible problems appear out of thin air. Watch your customers face as they expect 200 CFM from a grille in the master bedroom that's been uncomfortable for the last five years and only read 38 CFM. Really, it's magic, they suddenly want to give you money!

What to charge?
The best part of duct renovation is that it costs you little, but is worth much to your customers. They quickly see its value and are eager to get added repairs done so their equipment can perform they way it's rated.

There is no set market value for duct renovation and performance testing. Actually, the price has been set by the high-efficiency equipment. Basically, it costs $3,000 to increase equipment performance 20%. Duct renovation and a performance tests costs about the same, and it usually increases system performance more when the performance is proven and verified by air balancing at the end of the job. Whereas equipment efficiency is only a potential efficiency, completely subject to the duct system it's hooked up to.

Renovate duct systems and charge accordingly, except keep the lion's share of the money for yourself instead paying equipment vendors. Soon, you'll be delighted to see that customers will be even more willing to purchase high-efficiency equipment because of the confidence they will have in their SYSTEM performance.

Take some measurements on your next service call or sales appointment. Impress your customers and be impressed yourself at what your customers are willing to pay for a system they know is operating at true peak performance.

Rob "Doc" Falke serves the industry as president of National Comfort Institute a training company specializing in measuring, rating, improving and verifying HVAC system performance. If you're an HVAC contractor or technician interested in a procedure depicting three quick and easy diagnostic tests contact Doc at [email protected] or call him at 800/633-7058. Go to NCI's website at nationalcomfortinstitute.com for free information, technical articles and downloads.

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