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    Beyond COVID-19: Assessing the ‘New Norm’ for HVAC Contractors

    June 29, 2020
    As companies begin the journey of returning to business as usual, how can remote monitoring services simplify contractors’ roles and help differentiate their business?

    Consider some of the common nuances and pain points that contractors in the HVAC industry traditionally face.

    ‘How can I get more jobs and increase my profitability because my price is competitive, and how I can ensure construction costs stay within project budgets? Where can I find skilled HVAC labor where individuals are adept at all digitalization, IoT and remote connectivity needs? How can I better stay on project schedule to prevent added cost? How can I ensure quality and smooth, timely project turnover to building owners and my other customers? How can I establish repeat business or forecast for periods of low demand during off-seasons?’

    Now rewind more than 90 days to when the World Health Organization declared COVID-19 a pandemic caused by a coronavirus1 [specifically severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)]—and many U.S. states issued stay-at-home orders in March 2020. At the time, specific guidelines2 were set in place to define which businesses and trades would continue to operate as Essential Businesses. For the HVAC industry, this meant that many workers responsible for servicing or installing commercial HVAC systems and ventilation equipment continued to operate, albeit perhaps in a new norm where they may have found themselves having to rely more on remote monitoring or services to minimize disruptions to their customers. It also presented new challenges for HVAC contractors such as a decline in replacement equipment sales and less available HVAC equipment due to manufacturing declines. 

    The priority has never been more paramount for HVAC contractors to keep their customers’ buildings up and running and working environments safe for occupants. 

    As global regions and businesses start to reopen in phases following many shelter-in-place restrictions over the past few months due to COVID-19, many questions remain for companies and employees concerned about their safety when returning to work onsite: 

    • How will HVAC or general contractors adapt to business as usual once the immediate crisis is past?

    • Will the urgent need for remote monitoring/connectivity and services continue to be present post COVID-19 for the HVAC industry moving forward?

    • Will demand grow for remote service contracts?’ 

    This article will address:

    ·     Numerous considerations and factors around HVAC or remote building automation capabilities to consider, beyond the initial response to COVID-19; and

    ·      Which actions HVAC contractors must take to extend remote connectivity capabilities long-term to protect their employees and end users, and to create safe working environments 24/7

    Considerations and Factors Post-COVID-19

    It may be too early to discuss lessons learned post COVID-19, as new cases continue to develop, and businesses and local ordinances prepare for the next phase. But the priority has never been more paramount for HVAC contractors to keep their customers’ buildings up and running and working environments safe for occupants. 

    Increased concerns around indoor air quality—especially for frontline essential business workers—is perhaps one of the many factors driving the numerous market insights published in 2020 thus far on the spread of the virus as it relates to commercial office spaces and other buildings, as well as published guidelines (such as those from ASHRAE) for building operation during the global pandemic. Research from the U.S. Environmental Protection Agency (EPA)3 confirms that indoor levels of pollutants may be two to five times—and occasionally more than 100 times—higher than outdoor levels. Factor in COVID-19 and the risks could be higher for airborne virus transmission to affect pollutant levels—especially without the proper preventative strategies and building systems in place. Which is why the role that HVAC systems and remote building services play has become such a prominent focal point over the past few months.

    While the EPA does identify4 “central heating and cooling systems and humidification devices” as one of the many sources of indoor air pollution, other factors such as air change rate and concentrations of indoor pollutants must be considered when identifying their impact on buildings and their occupants. Additionally, ASHRAE confirms that—as it relates to COVID-19—changes to building operations including HVAC can reduce airborne exposures5

    HVAC and general contractors will need to work through numerous considerations as the global effects of COVID-19 continue to unfold. These include: 

    Focus on more building remote connectivity. If COVID-19 taught us anything as it relates to building environmental conditions, it is that secure, remote connectivity plays a more important role than ever before to ensure safe working conditions for occupants. The capability to remotely monitor and maintain buildings reduces exposure risks for service employees, and provides facility managers operational visibility and control in order to adjust HVAC equipment performance based on occupancy or environmental conditions. Remote access also allows for database configuration and troubleshooting or root-cause analysis as needed, and visibility into performance dashboards to assess energy consumption levels as it relates to building operation and make necessary adjustments—all without the need to physically be on site.

    Greater opportunity for consultative approach and profit margin. While remote monitoring has many benefits for the building and its occupants, it also presents an opportunity for HVAC contractors to provide a value-added consultative approach to ensure building owners understand the benefits of remote monitoring. By not only having the ability to remotely monitor HVAC equipment or automation system performance but apply predictive maintenance as a result of machine learning and artificial intelligence, contractors and service technicians can resolve issues and make adjustments before building owners are even aware there is a problem.

    Building owners and facility managers that realize they have older control systems onsite (that do not support remote connectivity) may wish to accelerate retrofit project needs to make the necessary firmware or hardware updates.

    For example, environmental factors such as supply temperature, static pressure or fan outputs can be monitored remotely to ensure they are all operating in the appropriate ranges and functioning normally. If there is an issue, service records may also be checked to assess history of part replacement such as fan belts to assess remaining run time in regards to total life expectancy and whether the part needs to be proactively replaced by the contractor before a facility manager or owner is notified. The value is immediate for building owners and contractors alike. By offering predictive maintenance and leveraging remote monitoring, HVAC or general contractors can also lower their service cost and increase their service margin all while providing enhanced services to the owner. The result? New construction work opportunities as well as increased protection to their service base.

    Possible rise in HVAC or automation retrofit projects. Consider the number of temporary healthcare facilities or field hospitals that were established (with spend on some facilities nearing $660 million according to NPR reports6) during the early phase of COVID-19 to take preventative measures in ensuring healthcare capacity for new coronavirus patients. Now, consider those existent healthcare facilities that had capacity to admit coronavirus patients (in addition to existing patients already onsite before COVID-19 was declared a global health epidemic) but may not have updated or maintained their building management or HVAC system in recent years.

    Chances are that many were challenged with ensuring occupant conditions were safe, HVAC systems were functioning as needed, and sites and building systems were accessible remotely for those stakeholders who could manage such responsibilities offsite. Beyond COVID-19, as education continues around the value of predictive HVAC system maintenance and remote building connectivity, building owners and facility managers that realize they have older control systems onsite (e.g. such that do not support remote connectivity) may wish to accelerate retrofit project needs to make the necessary firmware or hardware updates. Which means that HVAC contractors and technicians need to ensure they are prepared to meet such demands when they occur.

    The global modular construction market to grow at a CAGR of 7.1 percent by 2026.

    Growth of remote service contracts. We have yet to witness any industry forecasts around the potential demand for more remote services thus leading to more work for HVAC contractors. However, they may be inclined to revisit their business strategy to address such questions as, ‘Is my company properly prepared to handle an increase in remote service contract jobs? Do I have the properly trained adequate staff and service technicians to meet the demand? What resources or capabilities am I missing that I need to invest in to meet market demand?’ Important to note is that remote connectivity is needed before remote service contracts can be considered. 

    Immediate actions at low additional costs. From air filters, to indoor and outdoor coils to the condensate pump, dampers, heat recovery wheel and more—there are a number of components that can be assessed for further action to ensure HVAC and other building management system functionality. Learn more about how you can leverage existing recommendations to address the needs of your building owner and facility manager customers. 

    Focus on more modular construction. It is no secret why the concept of modular construction is not new.Its many benefits for HVAC engineers and contractors alike include (but are not limited to) cost-effective construction, efficient in-factory prefabricated processes, reduced waste and project risk, improved productivity, accelerated project timelines, and reduced labor. Which is no surprise why industry reports7 forecast the global modular construction market to grow at a CAGR of 7.1 percent by 2026, reaching $196.2 billion (up from $114.6 billion in 2018). What’s more, the modular construction market is no longer dominated solely by commercial building or residential housing industries. Laboratories, healthcare facilities, higher education campuses and data centers are all targets for modular construction and building design. And for hospitals and healthcare facilities both during and beyond COVID-19, their wider use of prefabricated, modular building construction and design can be foreseen in numerous different applications and not just for temporary hospital wings or field healthcare sites to address coronavirus cases and patients. 

    Recent findings8 from Dodge Data & Analytics cite that prefabricated assemblies such as a corridor rack in a hospital will be used by 58 percent of those doing prefabrication in general—up from the 33 percent using this approach now. In addition, the report confirmed that 61 percent expect to implement modular construction methods (in at least 10 percent of their projects in the next three years) in which entire parts of buildings (such as hospital rooms) come entirely pre-constructed and preassembled onsite9.

    Beyond COVID-19
    Lessons learned for HVAC and general contractors along the way will create different opportunities to run their businesses differently. By future-proofing the needs of various buildings and critical infrastructure with predictive system maintenance and essential remote connectivity, HVAC and general contractors can not only create safe working environments 24/7 for occupants, they can secure their own business continuity and resiliency when unpredictable events such as COVID-19 and other global epidemics occur.

    Reuben George is a product manager for Siemens Smart Infrastructure USA. He started his career as a software engineer and has more than 20 years of combined experience in the controls, smart city mobility and cellular telecommunications industry. Contact him at [email protected].

    Scott Harvey is a national operations manager for Siemens Smart Infrastructure USA. He has more than 34 years of experience in the controls industry, including robotics and building controls, with former roles as a firmware/software engineer. Contact him at [email protected].

    References

    1.    World Health Organization. (2020, March 11). WHO Director-General's opening remarks at the media briefing on COVID-19 - 11 March 2020. 

    bit.ly/WHOremarks

    2.     Cybersecurity & Infrastructure Security Agency (CISA), Department of Homeland Security (DHS). (2020, March 19). Guidance on the Essential Critical Infrastructure Workforce. bit.ly/CISAworkforce 

    3. The U.S. Environmental Protection Agency (EPA). (2018, Oct. 25, 2018). Why Indoor Air Quality is Important to Schools. 

    bit.ly/EPAIAQSchools

    4. The U.S. Environmental Protection Agency (EPA). (2020, April 14). Introduction to Indoor Air Quality. 

    bit.ly/EPAintroIAQ

    5. American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE). COVID-19 (coronavirus) Preparedness Resources. 

    bit.ly/ASHRAECovidprepare

    6. NPR. (2020, May 7). U.S. Field Hospitals Stand Down, Most Without Treating Any COVID-19 Patients.  bit.ly/fieldhospitals

    7. Allied Market Research. (Feb. 2020). Modular Construction Market by Type (Permanent and Re-locatable), Material (Steel, Wood, Concrete, and Others), and End User (Residential, Commercial, and Industrial): Global Opportunity Analysis and Industry Forecast, 2019–2026. bit.ly/fieldconstruction

    8. Dodge Data & Analytics. (2020, Jan. 29). Prefabrication and Modular Construction 2020.  bit.ly/DodgeModularConstruction

    9. Dodge Data & Analytics. (2020, Jan. 29). Prefabrication and Modular Construction 2020. bit.ly/PreconstructionModular