He says “keeping essential heating, cooling, water heating, and commercial refrigeration equipment affordable in light of eliminated tax credits and increased tariffs is probably the most pressing issue facing HVAC Industry manufacturers.”
The reality check here is that those increased costs impact commercial contractors and their customers as well.
Electrification, Heat Pumps, VRFs Are No Longer “Emerging”
One of the biggest shifts since our 2025 Market Outlook is how fast electrification has moved from theory to reality.
Commercial heat pumps and VRF systems are no longer niche solutions. Manufacturers are rolling out low GWP, all electric product lines designed specifically to meet upcoming regulatory requirements. In fact, the number of R 32 based VRF systems entering the U.S. market in 2026 are a clear signal of where things are headed.
This matters because it changes:
- How systems are designed
- How projects are bid
- What skills contractors must have on staff.
For high-performance contractors, this trend creates opportunity, especially in retrofits and replacements where owners want compliance, lower operating costs, and future proof systems. Heat pump and VRF adoption isn’t a niche play anymore — it’s becoming a fundamental expectation.
Of course, this also puts renewed emphasis on the need for continuing education and training for your field service and installation teams. Such training is especially necessary for testing, measuring, and diagnosing system issues impacting adoption of new technologies as well as upgrading existing systems.
Regulation, Refrigerants, and Forced Decision Making
Another factor really accelerating change is regulation.
Low GWP refrigerant mandates, environmental reporting requirements, and tighter energy codes are forcing building owners to make decisions they’ve postponed for years. Functioning mechanical systems may no longer make sense financially or legally.
This is why replacement demand is spiking: NOT because buildings suddenly need better comfort. The spikes are being driven by the need to achieve compliance and risk reduction.
When it comes to refrigerants, according to Talbot Gee, CEO of Heating, Air-conditioning, Refrigeration Distributors International (HARDI), in the AHRI Trends Report, “Recent trends from HARDI’s Unitary Market Program indicate that the transition to A2L products is nearing completion. As of July 2025, A2L refrigerants accounted for 86% of unitary sell-through volume, with R-410A representing just 14%. This marks a significant milestone for the industry, reflecting both the adaptability of distributors and manufacturers and the growing alignment with the goals of the AIM Act.”
For contractors, this favors HVAC firms whose management teams understand refrigerant transitions, code compliance, and long term system planning — not just installation.
It also means keeping an eye on refrigerant shortages and developing sharper abilities in forecasting, taking into consideration tariffs as well as local and national refrigerant legislation.
Click Below for the Next Page:
Recent Comments