The love/hate relationship that exists between the economy and the hydronics industry has not exactly been a match made in heaven over the past few years. Recent travails with the economy have put the hydronics market in a holding pattern, yet positive indicators suggest the economy may be softening. Industry experts are forecasting modest growth in the near term for the market as a whole.
Such optimism should be welcomed, but what exactly could be backing it up? From interest rates and the residential housing market to the contractors who used to sell hydronics, a confluence of factors need to come together to form this perfect hydronics storm.
New energy-efficient systems and introductions of innovative products and equipment — such as circulators, geothermal and solar thermal components, condensing boiler options, combiboilers, control systems, installation accessories and the capability of systems integration — allow the installing hydronics contractor many options to meet the needs and the budget of the consumer.
In addition, the use of PEX tubing for distribution piping in hydronic HVAC systems is growing as a less expensive and less labor-intensive system vs. other piping methods.
This all plays into the hugely important aspect of consumer confidence, which relates to the state of the economy and the willingness of consumers to spend their money. With this newly found confidence rising, it is incumbent upon the industry as a whole to increase awareness of hydronics as a complete comfort system.
Often the battle begins with selling the benefits of hydronics as not just a “luxury” item. “Sadly, too often hydronics systems get bumped in favor of granite countertops and stainless appliances,” says Rich McNally, Watts Water Technologies senior sales manager, residential and commercial.
Top contractors across the country have been most successful by taking a completely different approach to hydronics. Hybrid systems — a marriage between forced air and hydronics installations where it most benefits the end user — have been increasing the bottom line as of late for contractors willing to rid their sales teams of the “all or nothing” mentality.
These same contractors have expressed the need for the hydronics industry to remain focused on the comfort of radiant but to market it alongside other industry standard equipment such as ductless mini-splits and multi-stage air units.
Marketing hydronics as home comfort
So that begs the question: How do we present hydronic systems as home comfort systems?
“In the end, it’s not a hydronic system, a radiant system or a forced-air system — it’s a home comfort system. What matters is the components that go into that home comfort system,” says John Barba, http://www.taco-hvac.com/ Taco training manager
Factors affecting the sales of hydronic systems include:
- Interest rates and consumer confidence. Not necessarily a direct correlation, but in today’s economy increased interest rates do have an affect on increased consumer confidence. “Consumer confidence, low interest rates and general feelings of wellbeing are huge for ‘want’ products such as radiant and floor warming,” McNally explains.
Because of historically low interest rates, many consumers have been sitting on their hands when it comes to upgrades or discretionary spending. “When interest rates start going up, that may push people to move on projects they’ve been sitting on, whether it’s a new home, second home or major remodel,” Barba says.
Like moths from a wallet, when it comes to departing with one’s hard-earned dollar, interest rates, job creation and bank-lending flexibility, for example, can give us all the “warm fuzzies” and can lead to a more confident consumer.
“The consumer spending index, which has faltered a bit, continues to show promise. Homeowners will tighten their belts for awhile, but they cannot continue to ignore home improvements and, more importantly, their comfort,” notes Brian Fenske, KD Navien’s specialty channel sales manager.
- Residential and commercial market. Housing starts and commercial construction billings are indicators of growth in the residential and commercial building markets, respectively. The residential business is entrenched primarily in the luxury home segment, where the construction upturn is beginning to move in the positive direction.
“However, the long building cycle of luxury homes can delay the impact of the housing upturn for the hydronics market,” says Mark Hudoba, director of heating and cooling at Uponor.
While complete hydronics systems in nonhigh-end homes may not be the norm moving forward, radiant heating is transitioning into the mainstream of residential construction, Barba says.
“Other than in higher-end construction, it will be increasingly rare to see an entire home heated with radiant floor heating,” he explains. “You should continue to see bathrooms and kitchens with radiant, in conjunction with panel radiators, baseboard and hydro-air coils in forced-air systems.”
Hudoba contends that the commercial radiant heating and cooling business continues to gain traction with designers and engineers looking to solve issues with standard heating systems and/or achieve LEED certification.
- Investment in training. Manufacturers and contractors alike stress the importance of training in today’s business landscape. “Because contractors have such an influence at the homeowner level, training is critical,” Barba says. Well-educated contractors can help customers get the kind of home comfort system that works best for them and best fits their needs.
Being adept at several different types of systems — from condensing and noncondensing boilers to hydro-air systems and air-to-water heat pumps — allows contractors to offer a myriad of solutions to their customer base.
“It’s training, training, training,” he notes. “I’ve always felt that a strong, well-trained army of contractors is the best tool for long-term, sustainable market growth. As my old man said, ‘It’s what you learn after you know it all that really counts.’”
- New technology and energy efficiency. Fenske states boilers are being designed and offered with more options and sizes to meet the application requirements. Venting of the appliances has never been easier with an abundance of options to meet the equipment and installation requirements. Control integration and, most importantly, the outdoor reset requirement truly motivate the skilled hydronic craftsmen to design the best and most efficient comfort system.
However, there are differing schools of thought when it comes to selling overall efficiency to customers. “We need to really understand the entire concept of efficiency so we can better share that concept with our customers,” Barba says. “First of all, a new boiler or new water heater is never going to ‘pay for itself’ unless it gets a paper route.
“There’s no such thing as a meaningful payback or return on investment on home comfort systems. There’s nothing efficient about ripping out a 10-year-old cast-iron boiler and putting in a new high-efficiency model. The wiser approach is to show customers what they get with a better system in terms of comfort, efficiency and other benefits compared to what they would give up by going with merely a good system.”
A purely financial discussion — in terms of energy-saving dollars — is very limiting, he adds. While efficiency is important, a well-conceived home comfort system has dozens of benefits for customers that shouldn’t be ignored. “Focusing on efficiency alone misses out on all those other benefits,” Barba notes.
- Replacement market. A huge chunk of the hydronics market is dependent upon service, repair and replacement. Since a high percentage of the hydronics market consists of replacement, if external factors such as mild winters aren’t causing stressed systems, the demand for systems and components goes down.
In addition, although more work needs to be done, continued rebuilding after 2012’s Hurricane Sandy will see homes rebuilt with hydronic heating systems.
Couple new technology with ongoing training and hydronics installers have a lot of potential in terms of education and retraining on new equipment being offered today. This should add up to a renewed rigor in hydronic equipment and accessory sales.
Author bio: Eric Aune is the chairman of the RPA Technical Committee, as well as being the owner of Aune Plumbing and Heating. He also is an operating partner in the industry-based website Mechanical Hub, www.mechanical-hub.com.
