What We Underestimated in 2025

Looking back at the market outlook in 2025, the direction was right — but I underestimated the pace and friction. For example:

  • Market growth is strong, but it’s constrained by labor shortages, regulatory complexity (including rising costs due to tariffs), and installation challenges
  • Smart HVAC adoption is progressing, but slower than the hype suggested
  • The biggest gains are happening in specific segments, not across the board.

The lesson? Predictions don’t install systems — contractors do. And contractors operate in the real world.

What to Expect in 2026 and Beyond

Here’s what I believe high performance contractors should prepare for over the next several years:

  • Retrofit and replacement work will continue to dominate, especially as refrigerant rules and efficiency standards tighten
  • Electrification expertise will separate leaders from everyone else
  • Bundled services and performance guarantees will become more common in commercial contracts
  • New construction alone won’t drive growth — existing buildings (service work) continues to be a driving force.

The future of commercial HVAC isn’t about installing more systems. It’s about delivering measurable performance over time.

Going back to the AHRI Trends Report, they say emerging discussions are also centering on energy storage, building-to-grid integration, and hybrid systems that combine renewable energy with efficient mechanical solutions.

“Water efficiency and reuse in HVACR applications,” the report says, “are also gaining traction, particularly in regions facing resource constraints. Professionals are increasingly exploring circular economy approaches, from recycling refrigerants to designing equipment for easier maintenance and longer life cycles.”

What High Performance HVAC Contractors Should Do Now

  • Invest in training. Heat pumps, VRF, low GWP refrigerants, controls — all of it
  • Reposition your value. Sell performance, compliance, and lifecycle cost, not just installed price
  • Develop strong retrofit offerings. Audits, testing, verification, documentation
  • Target the right markets. Data centers, healthcare, institutional, and multi family buildings will lead.

There is Good News in All of this

The commercial HVAC market IS growing — but it’s also maturing. Building owners and managers are more informed. Regulations are tighter. Expectations are higher.

For contractors willing to evolve, this isn’t a threat — it’s an opportunity. But it requires moving beyond box selling and into true high performance contracting.

Are you ready for the next phase of growth? It belongs to those contractors who understand that commercial HVAC is about compliance, high performance, sustainability, and accountability — not just about comfort.

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