< Previouspast – but rather to the significant transforma- tions driven by innovation and a commitment to sustainability and efficiency. With that in mind, here are some trends to watch out for. DEMAND FOR BETTER ENERGY EFFICIENCIES Efficiency demand isn’t new, but smart tech- nologies play an even more significant role than in years past. Integrating smart technology into commercial HVAC systems is more prevalent than ever because it offers commercial building cus- tomers improved energy efficiency, remote moni- toring capabilities, and predictive HVAC mainte- nance opportunities. Add into that a by-product of the COVID pandemic, the surge in focus on in- door air quality which contin- ues growing. Energy ef- ficiencies tie into sustain- ability as well. The HVAC in- dustry is mak- ing big moves toward more eco-friendly materials and practices. I am talking about the push to re- place existing refrigerants in favor of A2Ls, sus- tainable building design, deVAP HVAC (Des- iccant-Enhanced eVaprative HVAC), as well as increased focus on solar HVAC systems, geother- mal, and more. A s the sun rises on New Year’s Day, the commercial HVAC industry faces sev- eral challenges and opportunities. I am no Nostradamus, but the various trade associations, industry-focused economic reports, and general news point to eight trends that will impact the marketplace. The good news is that as High-Performance HVAC contractors, these trends can play into your hands if you continue testing and measur- ing system performance and offering your com- mercial customers choices that will see them through 2024. In a press release from GlobeNewswire, Mordor Intelligence says that the HVAC industry is on fire. According to an article on the Service Business Evolution (SBE) website, HVAC companies generate $150 billion in annu- al revenue and employ over 1.5 million people in the U.S. SBE says, “The HVAC in- dustry is ex- pected to con- tinue to grow at a compound annual growth rate (CAGR) of 6.1% from 2021 to 2026.” They add that this is due to the U.S. HVAC In- dustry replacing more than three million air con- ditioning systems. This growth isn’t only due to the typical eco- nomics that has impacted the industry in years 10 JANUARY 2024HIGH-PERFORMANCE HVAC TODAY Eight Trends for the Commercial HVAC Marketplace in 2024 By Mike Weil MANAGEMENTregions of the country but also in the north, where, when combined with dual-fuel systems, they can be a great alternative to gas-only appliances. This growing preference for heat pumps transforms the HVAC sec- tor by fostering sustainable practices and improving energy efficiency. As more get installed across the country, we should see decreased energy con- sumption and progress toward green- er heating and cooling methods. REDUCED HFC PRODUCTION AND USE Much has been written in the trade press on the reduction in hydrofluoro- carbon production, a move mandated by the American Innovation and Man- ufacturing (AIM) Act. The AIM Act directs the U.S. Envi- ronmental Protection Agency to phase down the production and consump- tion of HFCs in the United States by 85% over the next 15 years. Why? HFCs are commonly used in refriger- ants with high global warming poten- tial, making them not-so-green. Re- placing them requires a lot of science and creativity – something this indus- try is well known for. Today, the HVAC industry is in the throes of pivoting towards alternative A2L refrigerants with lower environ- mental impact. Systems using these refrigerants require less than their HFC-based cousins and may perform better in low ambient conditions. DECENTRALIZED HVAC SYSTEMS There is a growing popularity for decentralized HVAC systems for im- proved zoning control and energy ef- ficiency in commercial buildings. In an article published in Facilitiesnet. com, author David Callan says that centralized systems are popular be- cause the HVAC equipment is locked away from public view. Still, he writes, “The downside of DeVAP HVAC systems, according to SBE, are being touted as the “future of air conditioning.” These systems use evaporative cooling, where desiccant in liquid form and evaporative cool- ers work together to cool a room or an area of a building. These systems are already commercially used but are now beginning to appear in residential applications. ELECTRIFICATION AND INCREASED DEMAND FOR HEAT PUMPS Undoubtedly, the electrification movement has taken hold as part of broader efforts to reduce carbon emis- sions and transition to cleaner energy sources. This push toward electrifica- tion means the HVAC Industry is see- ing a more significant emphasis on us- ing heat pumps. Because of improvements in heat pump technology, they are seeing greater use not only in the warmer JANUARY 2024 11HVACTODAY.COM12 JANUARY 2024HIGH-PERFORMANCE HVAC TODAY MANAGEMENT The Federal Reserve’s inflation-fight- ing interest rate hikes seem to have the desired effect. According to their report, inflation has been trending down since peaking in June 2022. So, this could be great news for Commercial High-Performance HVAC contractors who serve the office build- ing market. Refitting office spaces to accommodate returning workers will mean upgrading HVAC systems to meet new standards in efficiency, IAQ, and more. However, in an article published by Deloitte Center for Financial Services, a study of their clients shows only a 36% forecasted in- crease in revenues in 2024 com- pared to last year. That report says, “With revenue expectations muted for the second straight year, real estate CFOs who par- ticipated in our survey plan to continue reducing expenses. Two years ago, only 6% planned to make expense cuts; in 2023, 6% said they’d be cutting. Now, 40% say they plan to further re- duce spending into 2024. “The primary functional areas tar- geted by respondents for expense re- duction will likely be talent (49%) and office space (46%). According to a report by Richard Barkham, Global Chief Econo- mist at CBRE, commercial real es- tate investment activity will likely pick up in the second half of 2024. He says the normalization of hybrid working arrangements will continue to limit the growth of office demand. That and the uncertainty that still surrounds interest rates, at least ac- cording to a 2024 commercial real estate report written by Al Brooks likely gain momentum as commer- cial building owners and their ten- ants become more health-conscious, and regulations around IAQ become more stringent. COMMERCIAL OFFICE SPACE Since the outbreak of the pandem- ic and the subsequent move to “home officing,” the commercial office mar- ket has declined. With the recession, building owners and operators have seen continued downward trends in occupancy and revenue over the last two years. However, with the recession be- ing less lengthy than predicted and employment growth continuing, the NAIOP Research Foundation’s Office Space Demand Forecast predicts a gradual rebound in leasing activity starting in 2024. The NAIOP research also shows that as current tenants’ office leases expire, they are trading space for quality – leasing smaller spaces in newer build- ings with better, modern amenities to help draw workers back to the office. They also found that though new construction has slowed, projects be- gun in earlier years continue to reach the market, and will through 2024. doing this is that buildings with over- ly large central air handling units (AHU) systems, monolithic boilers, and large single-compressor chillers tend to perform poorly during partial load conditions and off hours. As a re- minder, a typical building will oper- ate at part load more than 99% of the year. “Instead, the more modular or de- centralized systems perform better in varied use cases. Decentralization provides the flexibility to operate var- ious portions of the building at differ- ent times.” He also says the modular or de- centralized approach, when done correctly, naturally provides a level of redundancy that can pro- tect a building if there is a failure. Adopting modular or scal- able HVAC systems offers your commercial customers flexibil- ity, scalability, and even easier maintenance. INDOOR AIR QUALITY You can’t get away from this one. Covid-19 brought about height- ened awareness and emphasis on in- door air quality (IAQ). HVAC systems play a crucial role in IAQ to maintain healthy and safe indoor environments. Strategies to address IAQ issues in- clude using advanced filtration sys- tems, maintaining proper airflow throughout the building, maintaining appropriate humidity levels, and us- ing ultraviolet light technology to dis- infect air streams. Innovations in IAQ are leading to- ward developing more sophisticated HVAC systems that can provide bet- ter air quality without compromis- ing energy efficiency. The trend will JANUARY 2024 13HVACTODAY.COM MANAGEMENT decade is going to have quite the labor gap, even as the job outlook for HVAC technicians is expected to increase by five percent by 2031. “With consumer demand growing and contractors competing for fewer and fewer trade pros, businesses are looking for any way to get more bang for their buck, do things more effi- ciently, and attract the best talent. All of that comes down to quality. To at- tract quality projects, they need quali- ty people and quality tools.” THE COMMERCIAL HVAC MARKETPLACE IS STILL STRONG It’s essential to keep in mind that commercial HVAC services represent the second largest part of the market, with more than 30% of total HVAC sales (residential is the largest). In- dustrial HVAC services account for 20% of total HVAC sales. So the opportunities are there. The key is to stay on top of providing quality education to your field service teams. It’s imperative for commercial High- Performance HVACcontractors to continue training their teams in test- ing, measuring, and diagnosing to- tal system performance issues while staying on top of industry issues and trends, some of which we’ve outlined here. severe weather nationwide through April 2024. While above-normal temperatures in some parts of the U.S. could mean less work for HVAC companies, El Nino could cause increased use of heat- ing systems in places like northern Ar- izona, northern New Mexico, southern Utah, and southern Colorado. The bottom line is that severe chang- es in weather impact not only the use of comfort systems in commercial buildings but also contractors and their teams who work on those build- ings and systems. LABOR SHORTAGES CONTINUE The commercial and residential sec- tors of the HVAC Industry continue to suffer from workforce shortages. According to the Associated Builders and Contractors (ABC), the construc- tion workforce shortage topped half a million in 2023. They say the overall construction industry needs to attract more than 546,000 workers on top of the average pace of hiring to meet la- bor demands. In a Malco Product blog post from November 2023, the au- thor writes, “Many [HVAC Con- tracting] companies are struggling to complete jobs and attract enough skilled workers, which means the next from J.P. Morgan. From an apartment supply stand- point, Barkham says, the most signifi- cant wave of new apartment supply in decades will temper rent growth and improve affordability for renters in 2024. Barkham also says that the news isn’t great from a hotel industry stand- point. That industry will still strug- gle in 2024, especially with growing competition from alternative lodg- ing sources and a slower economy. However, that will be tempered a bit by fewer Americans traveling inter- nationally, instead redirecting their spending to the domestic market. Barksdale also sees demand for new data center development attract- ing more institutional investment in 2024 as investors re-allocate their capital from the office sector to real estate alternatives. RESILIENCE AND RELIABILITY With weather conditions across the U.S. becoming more severe every year, HVAC Systems are more exposed than ever. Commercial customers want more resilient HVAC systems to with- stand extreme weather events and en- sure continuous operation in critical environments. Commercial contractors should consider weather conditions as they install and service mechanical equip- ment. For example, consider the El Nino impact on our country. Accord- ing to the National Oceanic and Atmo- spheric Administration (NOAA), an El Nino typically brings above-normal temperatures to the Northern U.S. and wetter conditions in the South. This year, meteorological groups like Accu-Weather see El Nino creating 14 JANUARY 2024HIGH-PERFORMANCE HVAC TODAYAs part of this major event, AHR Expo holds a competition among all its exhibitors to pick out the year’s most innovative products. Ten products in 10 categories are selected as Innovation Award winners before the show opens, and then one among them is chosen as the Innovation of the Year winner during the event. Winning products represent what AHR Expo Show Manager Mark Stevens calls the most inno- vative products and technologies in the market. THE 2024 INNOVATION AWARDS “There’s no shortage of innovation in HVACR right now,” Stevens says. “To be recognized as an award winner is a true honor and an indica- tion that we as an industry are responding to real problems with creative solutions.” Stevens adds that the Innovation Awards draw hundreds of manufacturers to enter break- through designs for new and never-seen solu- tions or improvements upon existing products and technologies. Two of this year’s finalists fall into the tools and instruments category and are of interest to High-Performance HVAC Contractors. TWO OF THE WINNERS ARE … The first instrument is called the FLUE- Mate™ combustion analyzer from Inficon and will be showcased in their booth (#N2934) at the AHR Expo. According to the manufacturer, the instrument is equipped with an integrated manometer, ther- mometer, CO (carbon monoxide) test, cracked heat exchanger test, and provides draft analysis. It displays efficiency, O2, CO 2 , CO, and flue gas temperature readings on one screen, which helps techs get the job done quicker. I nnovation is the root of advancement in tech- nology, products, and services. As High-Per- formance HVAC™ Contractors, you represent the root of Innovation in ensuring systems operate to the best of their design. Ultimately, your strength is the ability to mea- sure and test systems, discover what may prevent them from operating to their full potential, and then provide commercial and residential custom- ers with solutions that fit their budgets and needs. To accomplish all these things, we talk about the need for training. Training means ensuring your team knows how to collect and interpret measure- ment data. But it goes beyond that. Innovation also requires state-of-the-art tools and products and the know-how to apply them correctly. With that in mind, consider that every year, the HVAC Industry gathers at the AHR Expo (In- ternational Air-Conditioning, Heating, Refriger- ating Exposition) to see the latest product inno- vations and share ideas. This gathering has been going on since 1930. There have been 75 AHR Expos since the inau- gural launch in Philadelphia. In 1947, AHR Expo brought in ASHRAE as a an endorsing partner, and in the early 1970s, AHRI joined as well. HVAC Product Innovations for 2024 and Beyond By Mike Weil TECHNOLOGY JANUARY 2024 15HVACTODAY.COMupright and easy to see, so you always know when to change the filter or empty the trap and keep your FLUE- Mate protected. The automatic pump shut-off fea- ture stops flow when a high level of CO is detected, saving the CO sensor from being poisoned and saving customers an expensive repair bill. For more information on Inficon’s FLUE-Mate instrument, go to ncil- ink.com/FlueMate. Another of the 10 Innovation Award Winners is a company called HVAC Manufacturing and Technology Inc. for their SAV ® - Smart Air Valve. You can see this product on display at AHR Expo in booth S9220. The SAV-Smart Air Valve is a com- mercial product that can provide an economical self-commissioning air control solution. It features a 100-to-1 turndown and has a precision airflow accuracy within a few CFM, operating as low as .03-in. WG. This product matches the ventilation rate to the hazard risk, featuring ad- vanced Demand Control Ventilation & low energy use intensity with a single unit size. The SAV ® uses Variable Ori- fice Plate Technology to solve the com- plex problem of measuring a fluid ac- curately over a wide dynamic range. This innovation allows control com- panies/system integrators to supply and warranty zone-level devices as part of their scope of work, optimize their software/network architecture with self-balancing flexibility, elimi- nate garbage in garbage out data, and mitigate risk for the life cycle of the building. The manufacturer says the SAV- Smart Air Valve transforms infra- structure into a user-centric, healthy, flexible space without mechanical in- frastructure upgrades. For more information, visit HVAC Manufacturing and Technology Inc.’s website at ncilink.com/Sav-Smart. If you’d like to learn more about the other eight winners of AHR Expo’s 2024 Innovation Awards, go to ncil- ink.com/AHRInnovation24. Innovative tools and instruments such as these can help as you walk your company and team down the path to High-Performance HVAC contracting. Learn more about them and many other great products and services by coming to Chicago for the AHR Expo, which will be held from January 22 to 24 at the McCormick Place Conven- tion Center. For more information, go to ahrex- po.com. If you’re interested in regis- tering for this event, click here. While there, stop by the National Comfort Institute booth S9043. We hope to see you there. The FLUE-Mate analyzer can gen- erate a QR code you scan with your smart device for a quick analysis re- port. No Bluetooth connection is need- ed. All your readings and other infor- mation gathered are put onto your smart device with a quick scan of the code. A free, downloadable app allows the user to save and share reports. FLUE-Mate’s water trap and fil- ter assembly is always designed to be HVAC Manufacturing and Technology Inc. is the manufacturer of the SAV® - Smart Air Valve, which won a 2024 AHR Innovations Award. Pictured here is Inficon’s FLUE-Mate test instrument with a probe. 16 JANUARY 2024HIGH-PERFORMANCE HVAC TODAYI spent many years working with Kent. I stayed stagnant in my education and grateful to be alive. Kent provided a comfortable environment to be average. His company had a crew of four people, and we did about $700,000 worth of business in our best year. Five years ago, Kent tragically lost his son in a car crash and then lost his father to a sudden massive heart attack in one 90-day period. These tragedies rattled the entire company and sent us into a 2.5-year tailspin. The following year, I met my lovely future wife, Sara. When I shared my joy with my boss, he said he hoped to sell the business to my coworker Dustin and me. This was our opportunity. In April 2021, Dustin Wood and I purchased the assets and phone numbers of Kent Borota and started our brand, Honest Heating and Cooling Inc. NEW BEGINNINGS Starting out again, I found the challenges of a brand new business were mighty! But with the help of our distributor (Heating and Cooling Supply) and our equipment supplier (Daikin Amana), I received training and got back into the game. I was invited to attend training in Texas at the Amana manufacturing facility. This opportunity provided me with a steady stream of growth and opportunities. It’s where I met David Holt from National Comfort Institute (NCI). I n 2013, I was facing burnout. I had run my mind and body into the ground. First, some background: I started my first HVAC company in the early 2000s (Whitey’s Heating and Cooling) and spent eight years grow- ing my business as a sole proprietorship with the occasional cash helper friend working with me. My clientele grew by leaps and bounds. My ability to connect with humans on a level of per- sonal comfort restoration became a foundational legacy that has me where I am today. From the beginning, I was surrounded by men- tors who fed my thirst for knowledge and taught me what it takes to succeed. But ultimately, it was too much. The stress and pressure of being a sole proprietor took its toll. Looking for a way out, I sold my phone numbers and assets to my closest competitor, Kent Borota, and went to work for him. I took over duties as lead service, technician, secretary, salesperson, and more. 18 JANUARY 2024HIGH-PERFORMANCE HVAC TODAY Lessons Learned from the High-Performance HVAC Summit By John Whitehead LEADERSHIP John Whitehead (far right) was one of eight “first timers” to receive a scholarshipt to the 2023 NCI High-Performance HVAC Summit in Branson, MO.ships with the people I was fortunate to be paired with in my group. MY “AH-HA” MOMENTS As a potential brand-new NCI con- tractor member, I opened my eyes to the many principles and fundamentals that have fallen by the wayside in our trade. That is what NCI teaches and then takes it to the next level. The light bulb went off as I realized that anyone hungry for the best and willing to put in the work could become a high-per- formance contractor. From measuring and testing carbon monoxide safety to financing, Summit sessions covered enormous amounts of excellent subject matter that we could take home and apply directly to our business model. The transforma- tion that our business experienced as a direct result of the Summit has been amazing. Then there are the vendor part- ners. Yes, that is what NCI calls the manufacturers and suppliers who showcased their prod- ucts and services during the trade- show. Spending time with them intro- duced me to the importance of using the right tools and instruments to suc- ceed as a high-performance HVAC contractor. For example, spending time with the team from Sauermann caused a definite shift in my consciousness around CO safety. Learning about Sau- ermann’s current offerings helped us move flawlessly into our current heat- ing season with the right tools to en- sure our customers’ safety and health. The next life-changing vendor I met was Jim Bergmann with Mea- sureQuick. Our company had re- cently started using MeasureQuick, and meeting Mr. Bergmann and his team solidified our commitment to measuring to the next level. Meeting the TruTech Tools folks helped us better understand the in- vestments in the instruments that will alter our company. It was a great experience. Every vendor we met was top-notch and added to our growing list of “ah- ha” moments. NETWORKING BECAME REAL From the general sessions to the breakouts, I discovered how easy and fun it was to draw upon the collective and individual experiences of some of the HVAC Industry’s most innovative and successful contractors. Hearing other attendees’ input into what could change the face of our business has proven to be invaluable. I have attended other events, but they were not as open and free-flowing as this Summit event. For the first time in my life, networking became real. During our conversation, Holt invit- ed me to attend NCI’s 2023 High-Per- formance HVAC Summit in Branson, MO. I applied for a scholarship, which I was granted. That changed my life. I reserved my room, and the rest is history in the making! BECOMING PART OF A COMMUNITY Let’s face it: when you live and work in an area, you are part of a commu- nity. What you do with that “mem- bership” can make all the difference. I wasn’t always a big “joiner.” But from the moment I got to Branson, I dis- covered that the High-Performance HVAC community was (and is) unlike any other one I’ve been part of. I wasn’t a member of the organiza- tion, but I was treated like one. From the fantastic staff, who all seemed uniquely placed to augment my expe- rience, to the other contractors who made me feel like I belonged there, I felt part of something big and import- ant, and it fired up my excitement to be in this industry. Even the program’s format differed from other training seminars I’ve at- tended. It focused on how, as a col- lective community mind, we could all work together to further the industry. Plus, the group format allowed me to start relationships with other contrac- tors from around North America. The NCI Summit format divided at- tendees into groups so we could ex- perience Summit together. All group sessions were led by NCI instructors who facilitated brainstorming discus- sions. My group members immediate- ly connected and collectively shared our hearts and minds throughout this journey. I developed lifelong friend- JANUARY 2024 19HVACTODAY.COMNext >