March 2009

Innovations in Comfort, Efficiency, and Safety Solutions.

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HVAC Contractors: The Channel of Choice for Scaleable Energy Services
The Channel of Choice for Scaleable Energy Services

Tim Kensok

Tim Kensok,
Vice President, Market Development
Air Advice

Listen up HVAC contractors. How would you like to have the inside track to billions of dollars of new profit opportunities for your industry, in a market that is red hot, and where you have little or no competition?

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The market is energy services. Everybody from President Obama on down is talking about the need to save energy. On one hand, there are those who see every dollar we ship overseas to buy energy as funding a threat to our own national security. On the other, there are those who see every kilowatt generated as another nail in the coffin of a warming planet. Not to mention those in the middle who simply see rising energy costs as a burden on the finances for their homes and businesses. It’s pretty much the one topic that we can all agree on.

There are a number of energy agendas competing for airtime – renewable energy, alternative fuels, and the like. While almost all of them are good, worthy causes, most face significant challenges in their ability to make a significant impact.

That's where you, the mechanical HVAC contractor, have some big advantages. Such as:

1. Mature Technology
Compared to most, our industry and its technologies are mature. By no means is technology development in our industry stagnant. We develop new technology all the time. Rather, it is an issue of longevity. Buildings, and the stuff our industry contributes, last a long time. Compare the half-life of a commercial building to that of a cell phone. That’s why you have 50 year old boilers, 40 year old chillers, 20 year old rooftop units, and pneumatic control systems from the 70’s still plugging away out there, but at a fraction of the energy efficiency of the controls and equipment that can be purchased today.

Herein lays the advantage. Our industry doesn’t have to invent anything to achieve significant gains in energy efficiency. We just have to sell what already exists.

2. Cost-Effective
The solutions we offer are cost-effective. Or at least the cost-effectiveness of our solutions can be quantified by determining how much energy can be saved through a retrofit project and comparing it to the cost to install. According to a study commissioned by the Federal Energy Management Program, 5 to 30% in energy savings could be achieved in buildings through improved operations and maintenance, usually requiring little capital investment.Add to that more capital intensive projects such as chiller, boiler, and controls retrofits that can meet even the most stringent return on investment criteria and you have an industry that is ripe with cost-effective solutions to today’s energy issues.

3. Scale
Our industry has scale. There are over 50,000 HVAC companies in the U.S., employing well over a half a million people.2  We are one of the few remaining industries that still make house calls – everyday our technicians are servicing and maintaining equipment in millions of homes and buildings. They are, for the most part, experienced and well trained. Again, this is a huge advantage in delivering energy services on a scale necessary to make an impact.

contemporary However, for all these advantages there is one major issue facing our industry. Not nearly enough effort is channeled into selling energy efficiency. Our industry’s technicians are generally singularly focused on fixing equipment that is broken. As a result, several times each day they walk right past opportunities to save energy for their customers in the homes and buildings they serve. Our industry’s salespeople are not equipped with proper sales tools to educate customers on energy saving solutions and demonstrate to the financial decision maker the opportunities to save money, or more importantly, the high cost of doing nothing. Our industry’s distribution channels reinforce this behavior by stocking only standard equipment, and oftentimes requiring high efficiency equipment to be special ordered. When install time is tight that can often lead to taking whatever is on the shelf, forgoing the energy savings that could have been realized for the lifetime of that piece of equipment.

While these issues facing our industry are real, the opportunity far outweighs the cost to address. We simply need to get better at selling energy efficiency solutions on a large scale. Technologies are emerging that help contractors build a scalable process through automated assessment and verification of energy savings opportunities. That, coupled with improved sales and marketing tools makes the potential for an energy services business that rivals their mechanical service business achievable.

Visit our independent blog site that covers industry issues around energy and mechanical contractors.

1 Federal Energy Management Program, O&M First! – A Case Study on In-house Retrocommissioning at a DOE National Laboratory, June 2004
2 Dun and Bradstreet


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