One privilege of this job is that I get to travel around the country and hear a lot of thoughts about important topics that are of significance for the industry. There are many top-tier contractors, wholesalers and manufacturers and their respective associations that do some deep thinking that go way beyond just trying to move boxes through the distribution channels.
So here are, in no particular order, three significant issues that I believe call out for the industry’s attention: on-board diagnostics on equipment, on-demand local home services, i.e., the “Uberization” of HVAC contracting, and the Internet of Things in the form of a connected and communicating home.
This is an untapped market without an identifiable single-source provider. We do not, however, want that provider to become the cable guy.
Standardized on-board diagnostics for commissioning and re-commissioning would be helpful on a number of fronts, especially for addressing skilled manpower shortages. It would also be a precursor to attaching packaged equipment to the Internet of Things.
Equipment will continue to become more complicated, thus the need for a common protocol. On-board diagnostics would make sure that equipment actually operates correctly to OEM parameters. Some of that’s available today as proprietary systems, but there’s no open, compatible protocol. OEMs’ on-board diagnostics should probably be subject to certification and service technicians will need to be certified to work on OBD.
All of this will cost money, so the industry would have to seek credits or cost offsets from efficiency advocates like electric and gas utilities or the Department of Energy.
Regarding the connected home market, the key question is, how can HVAC contractors own this market, especially the service aspect? This is an untapped market without an identifiable single-source provider. We do not, however, want that provider to become the cable guy. As a start, OEMs have to develop equipment that will work with an open communications protocol. Top-tier contractors will need to develop additional skillsets in home security, door locks or garage door openers, all easy things to do for contractors accustomed to dealing with more complicated systems. This should be a no-brainer for contractors who are already involved in the home performance market.
Contractors need to remember, however, that homeowners are not buying furnaces and door locks — they’re buying the peace of mind that comes from controlling their home. This will happen, because homeowners will want it, and because EPA and DOE may mandate it later. Electric utilities will love this, because it fits in with their smart grid strategy, so they may provide incentives.
The Uberization of the on-demand home services market is a bit stickier for contractors, because it’s both here, in the form of Amazon Home Services, and it’s not. I’m sure we’ll see more apps in the near future, but we have no idea what they will look like. An Uber ride is a straightforward journey from Point A to Point B, but HVAC service is 100 times more complicated. That’s why contractors don’t quote prices over the phone. It depends. The homeowner’s assessment of the situation is often wrong.
This will happen, just like the connected home market. There’s venture capital money behind this, plus homeowners will want it. Contractors will have to figure out how they want to interface with this segment of the market.
Here’s one other issue that I want to toss out there: benchmarking contractor financials. I heard one contractor say, “Bill me now!” This is a profit opportunity for somebody in the industry. There’s some of this going on with associations or contractor mix groups but the financial data isn’t that comprehensive across contractors of different sizes and markets. Gathering such information would be a big, expensive job, but I believe there’s a market for it.
All of these issues will have a significant impact on the businesses of HVAC contractors. I hope they receive the attention they deserve.
Bob Mader is editorial director of ContractingBusiness.com, CONTRACTOR, and HPAC Engineering magazines.