Welcome to the future technologies and innovations that sculpt our industry.
This episode recorded live at the 2024 AHR Expo with Nick Harbeck, manager of regulatory
affairs at Johnson Control, Ben Middleton, national sales training manager at Daikin,
and Derek Hall, director of commercial sales Fujitsu.
All right everyone, thank you for joining us once again on Did You Know?
The Esco HVAC Show, broadcasting live from the 2024 AHR Expo here in Chicago, Illinois.
So we're going to continue our conversation about workforce development and things that
are transitioning in our industry, especially with technology and refrigerants.
And we're joined by three of our major manufacturers.
We have Johnson Controls, we have Daikin, we have Fujitsu, and it's an opportunity
for an entire industry to see that we are all evolving together.
So it's not just manufacturers that are making changes because they felt like it was
something new.
It's not chemical manufacturers changing the refrigerants because it's time to come
up with a new refrigerant, right?
We're talking about international treaties, we're talking about acts of Congress, we
are making an effort to advance an entire industry in a relatively short period of time.
I always make the connection to like the automotive industry, right?
A lot of us grew up working on our own vehicles, we worked on carburetors, we adjusted distributors
by using a timing light, and by the 1980s, 1990s, we wanted to make that internal combustion
engine more efficient.
So we just added solid state controls to measure temperatures and pressures, and we started
mapping them and we started making improvements to a relatively similar internal engine.
And that entire industry took a shift.
So I got to learn how to measure voltages on map sensors and measure resistance on temperature
sensors and EGR sensors as I was moving away from carburetors.
And by the time another decade came along, there wasn't any more carburetors, right?
So the automotive industry made a shift.
And so we started seeing national certifications for technicians to be able to learn new technologies
because they had to, they had things to learn.
And so we're seeing the exact same thing in the HVAC and refrigeration sectors.
So we have a lot of new technologies that we're transitioning into that we have to
get comfortable with.
And so I'm so glad that we're all here talking about these things together.
So let's all introduce each other and a little bit of your background in the industry.
Let's go ahead and start with you, Nick.
Sure.
Thanks, Clifton.
Hi, my name is Nick Harbeck.
I'm a manager of regulatory and environmental affairs with Johnson Controls.
I've been in the industry for about seven years, mainly focused on the refrigerant transition,
like you mentioned, trying to see how we can kind of not only comply with regulations,
but push the envelope on what our company can do, what we can do as an industry and
kind of lead into the next generation of technologies that are coming out.
It's not just refrigerants alone.
It's not just training alone, it's not just pumps alone.
It's everything all together.
So looking forward to today's discussion.
Thank you.
Yeah, it's going to be a lot of fun.
My name is Ben Middleton.
I'm the national sales training manager for Daikin Comfort Technologies.
Been in the industry for a little bit over 25 years.
And so I've seen a lot of changes that we've gone through.
Going from R22 to 410A, watching us go from a standing pilot in the furnaces and then
going into an intermittent and going in.
Yeah.
And so, you know, we've gone through a lot of transformative change within this industry
that we've seen over the last 25 years.
And it's exciting to see where the industry is going to be going in the next couple of
years.
I think change is only accelerating.
It's getting faster and faster and faster.
But with all of that change comes a lot of opportunity for the contractors willing to
embrace that change and lead.
That's really what it comes down to is helping people understand the opportunities as a contractor,
as a distributor, as a training facility, as an educator, that there are lots of opportunities
in all of this.
Absolutely.
Definitely.
And I'm Derrick Paul.
I'm the director of sales for commercial products for Fujitsu.
So I oversee the sales of the VRF products.
So if we talk about the transitions of refrigerants, we can make the change in the technology,
we can get it in the warehouse, but if the folks that I manage don't do what they do,
then it just stays in the warehouse.
So that implementation and getting it out in the field and understanding how to apply
it is a critical component.
So I think it's great that you get kind of a wide range here between training, regulatory,
and understand the sales process.
Because we all know that in the absence of sales, there's no business here.
That is true.
We all need to sell something today.
And for me, I've been in the HVAC industry about 15 years, but you look at me and I'm
not that young of a guy, but my background is mechanical engineering.
I came out of school and I began my career working in manufacturing.
I started working in plants where we were going through and automating, taking out ladder
logic and relay driven logic in these plants to go into PLC logic.
You mean another industry transition?
Oh my goodness.
But one of the valuable things is one of the things we were doing in that first manufacturing
plant I worked in was transitioning to variable speed drives.
Yes.
And my whole career was going from old DC based, real stat variable speed to solid state
VFD control of multiple devices within that manufacturing environment.
When I got into the HVAC industry and got into VRF, I read the data and I'm like, that's
exactly what I did when I got out of college.
It's the same stuff.
That's how VRF operates.
How you would operate a manufacturing facility.
It's all logic.
Walking into it with that background and that understanding has just been, it's a great
base to walk into the industry.
But we talk about moving to inverter driven equipment.
This is not a new move.
It's new move in HVAC for the last 15, 20 years, but this has been a move through all
industries for the last, it is 30 indeed.
So, yeah.
So every industry is making transitions right now.
And I like to talk about these refrigerant transitions because our industry tends to
look at it going, well, why are we doing this?
No one else is not realizing everyone else is.
Right, right.
Everyone that uses a refrigerant is making a transition.
So it's understanding what that looks like and understanding that we are really doing
good in all of this and that we have the ability to impact the world that we live in by moving
to modern technologies.
Now the adapting to it is where we're struggling, right?
I always feel like we're ringing a bell and we're dragging an industry along because a
lot of people don't want to take the transition.
One of the topics that kind of sparked this discussion is I had a podcast with a manufacturer
where we're talking about how in 2024, they were only going to have one model of contractor
driven single stage outdoor units for residential.
Everything else is going to be inverter or combination inverter and contactor on high
speed.
And then we had calls from educators, we had calls from contractors saying, I think I'll
just change brands this year.
And I went, you know what?
I have some different manufacturers and different brands and I think we should all get together
and paint the picture that we are all transitioning together.
You either make this transition or it's going to bypass you.
For 12 years, we've been walking out to contractors and been having that communication.
This is the direction it's going.
The contactor is going to disappear and you're going to go to solid state electronics and
variable speed.
It's coming.
You need to make that transition earlier rather than later, or you'll watch your competitor
take your business.
So let's talk about that a little bit.
Let's talk about efforts that each of our manufacturers are doing to move towards inverter
technology.
So when we talk about inverter technology, yes, we're talking about a principle so we
could all teach on inverter technology.
When we get to the equipment itself, then we start getting specifics, right?
And so that's where we have to make sure that, yes, we got to bring our inverters into the
classrooms.
We've got to understand how they're operating, but we also have to have the right resources
for the equipment that we're working on.
So Nick, let's start with JCI.
Let's talk about what you are seeing in the residential inverter sector.
Yeah, great question, Clifton.
And I think the main theme here is growth, right?
There's been a huge increase in uptake on folks wanting to use this new technology.
And frankly, requires effort on both the manufacturer's side of things and the contractor and installer.
We have a responsibility to provide training related to the actual products itself.
We've been recently revamping a lot of our training programs to that end, but we also
have to have the technology available.
So when we're talking about transitions, we have, you know, you know, compressor specific
transitions and refrigerant specific transitions and new product improvements that all are
kind of happening in constant...
Same time.
Same time, which, you know, provides somewhat of an opportunity.
Oh, yeah.
Whereas if you can do all of this thing at the same time...
It's one class.
Getting the one training up now covers all these different things.
So we have obviously new product launches coming out that are featuring all of these
new technologies simultaneously, and the training is commensurate with that.
So it's being able to take a look at, hey, new product X is coming out in July.
How can we get everybody up to speed to this and get it in people's homes to save energy
and money at the end of the day?
Yeah.
One of the big challenges that we see is there are facets to this, right?
You've got your salespeople that need to be trained.
You've got your technicians that need to be trained.
And then even the people in the back office and in the office that need to understand
what to do.
The prices have been going up in equipment.
There's no secret.
As we're looking at the technology improving.
So then comes in the question of affordability.
And so some of the pricing models, you have to look at how is a contractor going to be
profitable as they continue to offer inverters and they're still making them affordable for
the homeowner out there.
And so there has to be a lot of education on that side of the business.
There has to be a lot of education for the salespeople on how they talk to consumers.
So often, even today, there's a lot of contractors whose comfort advisors or selling technicians
go out into the home or even into a business and they make assumptions that the homeowner
wants the lowest price.
And so they don't even offer all of the options that are available.
And there's the application side.
As the equipment becomes more advanced, more technical, the tolerances become a lot more
tighter.
And so if you had a system that was, you know, that you had 10 or 12 years put in and it
was a single stage system, let's say it was a CSE driven running on an inch of static,
let's say it was a three ton system, you may not be able to go ahead and put in a three
ton inverter there.
And so it's so important to do a heating and cooling load to make sure that you're matching
up the equipment.
You're looking at the AHRI data and then the airflow requirements are absolutely critical
when you get into inverter driven systems, making sure you're delivering the beat to
use that you're, that you want to deliver and that the system is performing the way
and getting the efficiency that you had promised with that inverter system.
And so the application side is really, really important as we start to educate contractors
on that side of it.
And then of course there's the commissioning.
When the technicians or the installers are going out, it used to be, okay, we're going
to set it and forget it.
And the system, it worked, even if it wasn't set up absolutely perfectly.
But now we're starting to see when the technicians are putting in that commissioning is so critical.
So it's all of those pieces.
It's the pricing, it's the promotion of, it's the marketing that you're doing.
It's the app sales at the end application.
And then it's the final install and commissioning.
You know, Derek, you can probably speak on this one.
One of the things, it kind of goes hand in hand with this as we're talking about contractors
that are now working with technologies.
I personally think that the residential should start looking at a third job role.
When we talk traditionally in residential contracting, we talk about installation and
we talk about service.
So when we're talking about commercial VRV, VRF systems, that's really not the case.
A lot of times we have a third person in there that is more of a commissioning technician.
And I'm sure you see a lot of that in the commercial side.
You see that as being a potential new job opportunity in the residential sector.
I think it could be.
Kind of going back to what some of the other guys were saying, if you really look at residentially,
we apply our single phase VRF products residentially on a consistent basis.
One of the largest hurdles we face is the preconceived idea of what the product is.
So everyone says, hey, we're going to go ductless.
I've got a 4,500 square foot house and I've got 22 rooms, so I need 22 wall mounts.
When you talk about price and applying the product, that's when you bump into that price.
That's really cost prohibitive.
We also make ducted systems.
And if you look at all of us, one of our largest growth points has been in the ducted side
of the business.
I always tell the folks on our team, we don't live like the Japanese.
We're not in a 300 square foot apartment.
We typically have a, we spread out a little bit more.
So understand how to apply it.
But going back to that, the commissioning or that, I believe you will reach a point.
We've already seen this in some municipalities in some areas where you've always got that
backside commissioning confirmation of the performance of the system.
We're seeing that really in the areas that are driven off of rebates.
In North America where a rebate's a deal, it's a deal.
And where it's not, they've never heard of it.
But it's really dependent upon what area of the country you're in.
But I think that's where you'll see that is that confirmation for those rebates to go
back in.
I mean, we've seen some situations where maybe they needed three tons and they put 10 tons
in because they could get all the money for that.
So that's one of those things that I do.
Those rebates drive that confirmation on the backside.
The other big piece on that, when you take a look at commercial versus residential, you
have that also position of that designer engineer that designs the system.
And so when I take a look at residential, one of the things I've been saying, instead
of saying we have comfort advisors, we're almost kind of moving away from that into
a comfort engineer, somebody that's coming in there and is doing all of the calculations
with the homeowner.
And just imagine how that differentiates you.
And I talked about this, alluded to it before.
Those contractors that get on in the early leading edge of this and are part of that
early majority as far as adopters are going to be able to realize the most in terms of
margin and profitability.
Once you get on the back end of that and you're a late adopter or even a laggard with the
technology, that's when everything has become commoditized and the profit margins aren't
there.
And so you want to make sure that you're leading and moving forward instead of waiting and
seeing how everybody else does this and then trying to play catch up.
One quick point just on these rebates that we're talking about.
Ben, you mentioned affordability before as well.
We've seen a huge upswell in the amount of rebates that are available, whether it's federal,
state, local, et cetera.
And based on some analysis we've done, frankly, to get some of these rebates for heat pumps,
for example, it's going to require things that are CER2 17.2 and above and you have
to be an inverter to hit that.
Absolutely.
And that's where this new technology is really key and I mean, once again, bouncing back
into heat pumps a little bit, how can we make sure that we're minimizing callbacks on customer
complaints?
Getting refrigerant charge dialed in on a heat pump is so important because of that
zero sum relationship between cooling and heating optimization.
So you want to make sure the customer is happy and they can save a lot of money, but to do
that you got to be properly trained in the new technology.
And that brings up a good question.
I ask a lot of contractors, I ask a lot of educators about this.
Now from a manufacturer perspective, do you think it's time that we really start focusing
on a nationally recognized certification for inverter commissioning installation?
You know, when we talk about that transition that happened in the automotive, ASE kind
of took a forefront and said, hey, we have new technologies.
Not only do you need to be trained, you have to be trained and the consumer is going to
expect that you have had training for the products that you're going to be selling.
I would love to see that happening in our industry.
If it doesn't, I still promote that we've got to get comfortable with this technology
because it really is the transition that we are seeing right now.
I mean, let's talk about how inverters have changed the product lines for residential.
What have each of you seen for the transition in residential based on inverts?
Because I know one manufacturer I talked to, they said that two years ago they were about
30% inverter and 70% single stage.
And they're anticipating for 2024 for that to be inverted and to be about 70% inverter
sales and 30% single stage sales.
Well, for me, it's almost, that's what we sell is inverter driven equipment.
So we've been forward with that equipment.
And as we look over our shoulder, we see the traditional unitary manufacturers in North
America, you see them coming into it.
And I think 10 years ago, there were a lot of struggles in that transition into the inverters.
If you look at everyone that was using a Copeland inverter scroll, there was a learning there
that there's a lot of firmware updates.
There was a lot of board changes because it was a new product.
And anytime you're dealing with new technology, there's a learning process there that you
need to get the experience.
Experiences, I always say the hard thing, bad thing about experience is only one way
to get it.
Right.
So what we've seen is the unitary manufacturers with that 10, 12 years experience are going,
okay, now we know better how to design with this equipment.
And we're starting to see traditional unitary manufacturers transition more to that horizontal
draw through footprint so that you can actually get the unit in the backyard and not over
the fence.
Yeah, and get it through the gate.
Yeah.
When you look at that adoption curve that I was talking about on the very bleeding edge
is the innovator.
And so I think we've had the innovators that have been out there that to your point have
been really helping us to learn how to put together what we need to do.
And that's why I talk about we're in this phase of this early adopter phase right now
where the innovators have kind of blazed the trail and really started to make it easier
for contractors to get into this early adopter phase.
And it's exciting.
There's so many tailwinds that are driving all this right now.
You talked about regulation, you take a look at the promise of what's happening with the
IRA and eventually that's going to be coming rolling out into the states.
And so I know we're going to see a lot of push for heat pumps and electrification with
that.
I think there's over 2700 different utility rebate programs right now across North America.
And so there's a lot of opportunity that we see with that as far as again, driving towards
inverter technology, driving towards heat pump.
And we're even starting to see builders that are really embracing this at a high level.
And you see even in New York and what you would typically think as cold weather climates
where there's whole entire subdivisions that don't even have gas that's run into it.
And so we're really seeing all of these tailwinds really starting to push towards this technology
creating a ton of opportunity.
I just agree and echo what everybody said.
I mean, Clifton, to your point earlier, it really is a switch in the way that it is.
The uptake of these new technologies as they're being born out.
And even more than just like the true performance benefits of this new inverter stuff, we see
other benefits too.
The sizing of the outdoor unit is changing, which makes it sometimes easier in some applications
and sound, for example, we've seen some states require really strict noise level restrictions.
And now you have a solution.
Yeah.
Oh, you want me to tune this?
No problem.
Let me tune this thing.
And that's why I'm talking about that transition that horizontal draw through footprint.
Traditional unitary manufacturer says an outdoor unit should look like this.
So to get that efficiency, it gets a four foot by four foot and it's eight foot tall.
And you go, what size is that?
It was three tons.
It's bigger than the gate.
Right, right.
Absolutely.
You know, one of the things I like to bring to the awareness of young technicians coming
into the industry is the opportunity for them as well.
That's why I encourage our programs to really move into the technology because our young
technicians that grew up, you know, with electronics, they understand how to work with
communicating equipment, right?
May not be in the HVAC system, but they understand how communication devices work.
They're built on technology.
And then we have the young automotive technicians that learned that, oh, I can take a product
and I can become really good at tuning a product.
And I tell our HVAC technicians, our up and coming technicians, did you know that you
could be that person in our industry?
Because with inverter technology, it's not a cookie cutter product like it has been in
the past.
In a single stage or two stage unit, I had limited capability with it.
I had to design my system around the BTUs that it would produce.
Hopefully I could get my airflow set properly.
Hopefully I can get my charge set properly.
Hopefully I can do what that product was designed to do.
With inverters, now we can custom tune things.
I can take an inverter and I can set so many points within that piece of equipment that
I can now take a product and I can fine tune and I can custom tailor that and I can get
a product that can do so much more than the product selections that we have had in the
past.
And so I always encourage these technicians, think outside of the box as a contractor,
think outside of the box.
Think about what you can do with this piece of technology, not just what that technology
has done for you.
Well, I think the big thing is also the combinations of hardware, right, if you will?
Yes.
I mean, you have so many choices of outdoor units, indoor units, and so many different
combinations of what you can do, which again, it gives these unlimited almost possibilities
as far as what you can do.
But the other thing is it really does have to be designed.
And so what I think is exciting, there's a lot of people that are saying, well, I don't
know if I want to get into the blue collar trades.
I mean, one of the biggest challenges we've had in our industry for a long time is the
skills gap, right?
Absolutely.
But now as you start to look at technology coming into it and you start to look at how
training is evolving and changing, I think there's a huge opportunity for us to get more
people excited about coming into the trades and into the field because it's not, there's
still the manual labor of working in crawl spaces and working in edX.
That's not going to go away.
That'll never go away in our career.
But there is so much opportunity to work with technology and with that is also going to
come higher wages and as the skill sets develop, which will be more attractive to people coming
into our industry.
How are you investing in yourself?
Indeed.
Do you want a job, do you want to trade, do you want a skill?
If you're not investing in yourself long term, if you don't put money in the bank, your returns
are probably very low.
So if you're not investing in yourself the same way, whether that's learning more about
the industry, learning more about the trade, even if from my standpoint being an engineer,
are you spending the time to expand your knowledge and understanding of the product?
Do you spend time going through the manuals?
One of the best documents we make is a service manual.
All the time we'll have a technician go, you won't really tell us how it works.
Read that book.
That's how I've got where I am.
It goes into great detail.
Right.
My manual.
If you'll read it, you'll be the most knowledgeable guy for about 15 miles.
Absolutely.
And the early movers get recognized and compensated.
Sure they will.
Appropriately.
I'm from Minnesota.
There's a program there called the Center for Energy and the Environment.
There's a whole dedicated section of the website that works with our state energy office to
make sure that the installers and contractors that can install and do this equipment are
listed there in the first ones that people call when they're trying to upgrade their
home.
I see a lot more of that going forward.
Let's talk about training just for a minute.
One of the things that I think is very important for contractors and educators to understand
is that there are resources for you.
We do this kind of communication to help you know where you can go for resources.
If I am a school and I'm looking to bring inverters into my program, I should know that
I've got my manufacturers to help me along with this.
I'm sure you can all tell us how much training has escalated for you in this year.
Let's talk about this for just a second so that people understand that the training from
the manufacturers is very much alive when you go to look for that.
Yeah, I mean I can maybe start here but I'm sure Ben and Derek have a lot more to say.
We've completely revamped our training programs.
We have a Ducted Systems Academy and we've transformed it holistically.
So you can dive deep into working with residential systems whether it's inverter specific products,
furnaces, etc. but it's critical to getting this transition happening faster.
Yes, and so what's the connection for that?
Where would people go to look for that?
I mean there's a website not to shill.
You can check the website.
We apply it through some of our partnerships.
So we have a community college partnership program with a couple dozen colleges around
the United States and we're in the field working with our suppliers and distributors to make
sure that this information is getting out and getting out rapidly.
Excellent.
So I mean I run the HVAC Learning Campus so it's hvaclearningcampus.com and on there we
really look at a lot of different things.
People are looking for information in many different forms.
I think it's still very important to have the live in-person hands-on training and we're
building training classes all over North, or training locations all over North America
to make sure that we help to lift the skills of heat pumps.
But then we live in a TikTok generation.
You look at a lot of the younger people that are out there right now and so we partner
up with people like XOI Technologies and are able when they're on the job site they can
just go ahead and click on the QR code that's on the unit and that will bring up all the
installation manuals and everything else because we're finding, guess what, a lot of people
don't read the books but they want to have these quick little 15-20 second videos that
shows hey where do I put this wire, how do I do that and so makes it very simple, very
easy.
And then we also see that VR technology is becoming bigger and bigger.
A lot of VR in the last year.
We saw just all kinds of VR technologies that were happening out there at the CES show but
with VR you're able to still do that experiential learning where they're in there and they're
getting that muscle memory and building that as they're working with the thing.
So that reinforces what they learned in the classroom or how many times have you set up
a workshop and the person wants to come and it gets hot or cold that day and now they
can't show up to that live class.
Nice thing about VR, it's on demand and so it's something that they can do when they
are slow and they can continue to learn the skills that they need to learn to be effective
out there.
So I think it's expanding.
It's definitely leveraging technology as we continue to move forward.
Absolutely it is.
Well, my dad's 80 years old.
Anytime anything breaks, what's his resource for the repair?
YouTube probably.
YouTube.
So you go well that's not really a resource to go to.
We're in that crowd-sourced environment.
That's where we're getting a lot of that transfer of data.
Doesn't mean you always get the best data but there's enough volume out of it out there
and we're starting to see more on the contracting side.
You say the TikTok generation.
We have people that do great jobs that they want to build the community.
They want to build the trade.
So they like to demonstrate the ability to do projects and a lot of times they're giving
that kind of feedback on your systems.
In this environment, the way the world is today, if you're not utilizing those resources
then you're bypassing that helpful guy that wants to share his knowledge with you.
I think that's a positive.
Like the type ran of the world ties out here somewhere with us.
We were at Hardy recently and Hardy was talking about the A2L transition.
They've actually got a chat bot that they're going to promote to the members to where that
you can go to the chat bot and have it explain to you everything you need to know about A2Ls
in a conversational format.
We have to understand that that's the future of our industry too.
I know there's some discussions of you think about traditional scheduling techniques for
commercial buildings.
That's always been kind of graphical.
It's been like trying to solve a three-dimensional puzzle.
We're going to move to the point where you'll just ask it to go, this is how I work.
Could you make sure I'm comfortable?
That technology is going to be on the backside of it.
We're working on cloud-based controls technologies to where we can have that sort of edge computing
model to where we bring the data in and we can have on the backside through resources
like on AWS to where you've got those machine learning AI models that drive that.
We're not really there yet, but that's the direction we're going to.
That's another transition that we will see as an industry.
Everybody wanted a Nest thermostat because they supposedly learned how to live.
They get it and the backside of it wasn't that great.
It was confused when you wanted to be warm and when you wanted to be cold.
People get mad at them.
I think as that technology advances, that's what you're going to see.
Absolutely.
You just mentioned another thing too that we should probably talk about.
When we're talking about transitions, we spend a lot of time talking about equipment transitions,
but we are all going through refrigerant transitions as well.
As technicians and as educators, we have to understand that it's not like when we went
through our R22 phase out where we had a product in place, a singular product to replace R22
as a primary new refrigerant.
As we make these transitions, we're going to see a variety of refrigerants being used
in equipment.
We're going to see some manufacturers using multiple refrigerants.
Can we talk just a little bit about what we're seeing for A2O refrigerants going into residential
and maybe even commercial products for this next year?
For us, for our residential products, we're taking that tack towards more of the R32.
If you look at it, it's a technology that we have long-term knowledge of.
This is not the first time we've built R32 equipment.
We've sold this equipment worldwide for multiple years.
I know every manufacturer has done that, especially the ones for the Asian manufacturers.
For us, it's a natural transition.
The big thing for us in North America is our building codes don't necessarily play very
well with that A2O refrigerant.
I know.
We're all struggling with it.
You think in this transition, I think that's what you're going to see is we're going to
make the transition.
Then we're going to have to work on the building codes to understand what is really safe and
how do we protect the consumer?
How do we make a safe building?
Right now, the codes aren't very friendly to it.
We'll see a lot of R32 in Fujitsu.
Deichen, of course.
We should see probably 32.
We looked at all of the options that were out there and we wanted to figure out what
we figured would be the best as we looked at the North American market.
Like Fujitsu, we have a lot of experience with R32.
It's been out in the market since 2012 and so it's been there for a long time.
We looked at, and what I would say the biggest challenge right now with the refrigerants
is making sure contractors know the facts.
Oh, absolutely.
There's a ton of misinformation that has been floating around.
I still hear contractors say, we're going to Propane.
Wait a second.
Well, we're not going to Propane.
It's an A2L.
So there's a difference.
It's not an A3.
Just helping contractors understand what an A2L is, I'm sure there's going to be consumers
that may have some concern.
What's this fine little sticker on my equipment?
Somebody get me a different box.
That education process to consumers, I think there's a lot of scare tactics out there as
far as when are things going to be phased down and what's happening there.
So again, just being very factual I think is the most important thing that everybody
can do out there in laying out the facts that the reason we're going to an A2L is because
we're trying to get the global warming potential down.
We're trying to look at the environment.
Dyken looked at it and we said there's two sides to the equation.
There's the direct impact from the chemical and there's also the indirect impact from
the overall life cycle of the system.
So we like to look at the life cycle climate performance and really where are we going
to get the most efficiency?
Where are we going to be able to use the least amount of refrigerant?
Where are we going to be able to maybe make smaller units use less commodities in the
building and the manufacturing of the product?
And when we put all of those pieces together, we decided R32 seemed to be the best choice
for us even though it's not the easiest transition.
From 410A to R32, there's a lot of engineering and design work that needs to go on.
When you're going from 410A to 454B, that almost can work like a drop in and can be
easier for a manufacturer.
But we kind of decided we wanted to take the hard path because we believe long term that's
the right solution to move to.
And what about Johnson Controls, Nick?
Yeah, likewise we're also going to be using R32 in some applications but then you did
touch on it a little bit, R454B is primarily going to be the solution you'll probably see
for most residential and light commercial products for a couple of reasons.
Like you mentioned, Ben, it's very similar to R410A which is nice from an application
perspective.
Yeah, absolutely.
Now, it's like a drop in, it's not a drop in because of that A2L characteristic but
being able to use a similar operating pressures, having similar experience with the compressor
itself is we think going to be useful and handy.
And back to the ultimate goal of what this transition is trying to do is lower GWP.
Having that lower global wiring potential threshold on R454B we think is going to be
advantageous for the US as a whole.
I mean, Clifton, you mentioned there's a phase down happening with this refrigerant transition.
So finding ways to get the GWP as low as possible while still maintaining the serviceability
of existing equipment and future equipment that gets installed is going to be critically
important whether that's through the technology transitions that we have manufacturers are
making or within the recovery of refrigerant within the field.
And so the more we can do everything all at the same time, the better served will be going
into 2036, 2040, et cetera.
Yeah, absolutely.
We're actually going to be spending some time.
Jason Objute from our team is going to be doing a podcast on Wednesday and we're going
to be specifically talking about just refrigerant.
Perfect.
So a lot to talk about in the industry.
While we've got a little bit of time left, one topic that I like to bring up and people
think I'm crazy, but I love monoblock air to water heat pumps.
So exciting.
So the technology is being used internationally.
We even see A3 applications of it because now we don't have refrigerant in the structure
at all, which changes the entire building code perspective.
I got to see quite a few last year at AHR.
Am I going to see more of them this year?
I think the answer is yes, yes, and yes from all of us.
Yeah, I mean, we're also very excited.
This is a huge opportunity for the United States.
We'll be launching a product this year, probably likely around March and being able to address
a entirely, I guess, unaddressed market in the past.
New England, anybody living in New England, there's a solution.
And now we're on your radiators off.
Right.
You have a boiler.
We have a drop in solution for you.
It's amazing.
Let's talk about this.
Okay, so we will be seeing some air to water monoblock, probably heat pump technology coming
from Johnson Controls.
What about Dyken?
Yeah, we've got the product here.
It's in the booth.
So I encourage everybody to stop by and take a look.
We've got our L-Therma product.
We're very excited about that.
You know, it's a technology we've been using in Europe for a long time and it definitely
has worked well in that market.
And to your point, very excited about New England and what we can do in that market.
Also, in the upper Midwest, there's a ton of influradian systems and other systems that
people are going to be able to take advantage, not only of the efficiency, but also the space
savings.
Oh, absolutely.
Yeah.
The capabilities of it.
Yes.
It just opens up a whole new opportunity for system designing that we're talking about
before.
What about in Fujitsu?
Well, Fujitsu globally sells air to water systems.
I'm looking at what, you know, on the commercial side of the business that I support, it's
really interesting because when you get out in the field, what gets asked for varies depending
upon where you're at.
Oh, yeah.
Absolutely.
Some place they want residential, you know, domestic hot water and some place they want
to be able to use it for, you know, for other heating, you know, domestic heating.
When you look on the commercial side, there's, I think we're in Cooling here, there's a
lot of BTUs we can grab and use in the facility.
So I think we're looking at the multiple different ways in which we could get into a platform
to be able to support that.
But like you said, if you go into an environment where they say we're going to decarbonize,
you can't put in gas.
So now I've got to heat my water with electric resistance and, you know, that really low
COP there.
Yes.
Right.
Sure.
Well, I personally see that as being a technology for us to be prepared for.
I think it's going to come faster than most people anticipate.
I anticipate that all of them will be inverter because those are very high performing systems.
So it just pushes that drive to understand what inverter technology is, to get comfortable
with it now, introduce it into the classroom, get our technicians, bring our existing technicians
into this new understanding of a technology.
Because I can be the best technician in the field, but if I've never walked up to an
inverter, I've got a lot of training and a lot of catch up to do because it's a different
animal.
It operates differently.
It runs at a internal control that is much like an automobile where it's measuring temperatures,
it's measuring pressures, it's trying to optimize itself.
And so it will run characteristically different than a traditional single stage or two stage,
you know, non-variable capacity system.
So a lot of new opportunities in our industry.
Absolutely.
We talk about contractors.
Contractors take advantage of these new opportunities.
What about a school?
If I'm a school, why wouldn't I be taking advantage of new opportunities to prepare
students to be able to have them ready for placement in the industry?
So as an entire industry, we have a lot of education to do.
We have a lot of new technologies.
Let's talk about ways that an industry can move forward together.
I know we're going to see Fujitsu, we're going to see Johnson Controls, we're going to see
Daikin moving into this.
Let's talk about continuing resources.
So I know within each of our training departments, with each of our manufacturers, we have training
that's available digitally.
We kind of talked about some of these resources.
Do you see manufacturers doing more training this year than in previously for contractors
on new equipment?
Yeah.
I mean, I think the answer is yes, it has to be.
Mainly because of all these transitions taking place, the technology is changing and as these
new products roll out, whether it's from JCI, Daikin, Fujitsu, whoever else, being able
to master that new technology and implement it in the field is ultimately going to make
you a lot of money.
That's a gap right now, but as we roll out some new programs, again, through us, through
our inductive systems academy and through others, through schools, et cetera, and the
partnerships that we have, that's going to fix that gap and get us ready for essentially
January 1st, 2025 and everything officially.
It's over.
Yeah.
That's what I was looking for.
What are we doing to prepare?
Yeah.
So we've already started, we've had a couple of big road shows where we've gone out regionally
and have done big classes.
Like I said, there's many things.
So it's sales and application, it's pricing, and then it's the installation and commissioning.
If you just kind of take those three buckets, we have a big transition to do as we're getting
the industry ready as we transition and move into it.
I think back, you took a look in the 1980s, there was a big push for heat pumps in the
1980s as well.
Guess what?
The technicians weren't ready.
Nope.
And what ended up happening was a lot of heat pumps were put in wrong.
And so then everybody said, guess what?
Heat pumps don't work.
I'm going back to the old safe space where I need to go.
And we can't as an industry afford to do that as we're trying to solve all of these different
challenges.
So we need to make sure that we're offering the training classes, but then also that we're
filling up these training classes.
And so that's the big challenge I have to every distributor, every territory sales manager
that's out there, making sure that they get their customers to attend as many of these
training events as possible because that's how we really move the needle in our industry.
Absolutely.
And I think even beyond the classroom is making sure that you're in the field with the contractors
so that they know they're supported, that as we introduce new products, that they know
that the manufacturer is there to support them and see through the transition.
The first steps to not be afraid of it.
That's it.
Right?
So at the end of the day, it's refrigeration.
So it's understand that maybe change and maybe some differences, maybe some things you have
to learn.
But at the end of the day, it's still air conditioning and the fear of it is the worst
thing you can have.
So we need to make sure that they're supported.
I had a contractor one time I was working with him and he's like, oh, this isn't like
regular air conditioning.
I said, that's all it is, is air conditioning.
A 20 sear inverter unitary system commissions and starts up different than a 13 sear straight
cool.
I said, they're different, but doesn't mean that that more difficult.
Your fear is what keeps you from wanting to invest the time and effort to learn.
So we've got to make sure we're hand in hand with our contractors to get past that fear
aspect of it so they can move forward with it.
Excellent.
All right.
Well, gentlemen, that's a lot of great stuff, a lot of inverter technology, a lot of refrigerant
technology.
So I encourage all of you to join us every week.
We bring different trainers from the industry on our, did you know the ESPO HVAC show where
we talk about this firsthand because so many things are happening.
We have a presence from all of our manufacturers at the National HVAC, our education conference.
We have trained the trainer events by the manufacturers at the conference.
We look forward to growing together as an industry.
We all have our parts to do in this industry and it's so great to be able to sit down with
manufacturers at the AHR Expo.
I'm looking forward to stopping by everybody's booth and see some new technologies and any
last parting thoughts before we hop out of here?
Yeah, I mean, thank you, Clifton, again, for having us.
This topic is so important and it's so timely.
It is.
We have essentially one year runway to make the best of this time period and get ready
for the future.
And as manufacturers, I think we have a responsibility in both the training aspect and Derek, you
mentioned this earlier, making sure we're reducing those regulatory barriers, getting
those building codes in place so that we're positioned for a transition where we're on
the leading edge rather than trying to follow and stay behind.
Love it.
Yep.
The biggest thing I can say is embrace the change.
I mean, all of the early adopters, that's where you're going to find the most profitability.
That's where you're going to find the biggest opportunities for your business to grow.
That's where you're going to attract the best talent as they see that you truly are that
innovator in your space.
So make sure that you're embracing this change.
You're not resisting it.
Lean into it as hard as you possibly can.
And like I said, appreciate you giving us this opportunity to come and be a part of
this today.
And to that point, let's move forward without fear and understand that we've got the knowledge
and the ability and we can handle this.
Absolutely, we can.
All right.
Well, thank you all so much for joining us this year at the 2024 AHR Expo.
I encourage all of you to stop by each of our manufacturers.
Form a partnership.
Say, hey, I want to learn more about what you're doing.
How can we work together?
How can we move this industry forward together?
And let me catch you all again sometime soon on one of my shows.
Thank you so much.
It's been a pleasure.