Welcome to the future, technologies and innovations that sculpt our industry.
This episode brought to you by Johnson Controls and their redesigned residential HVAC portfolio
utilizing R454B.
Learn more at johnsoncontrols.com.
All right, everyone.
Thank you so much for joining Did You Know?
The ESCO HVAC Podcast.
So today we're spending some time with David Budzinski, the president of global products
at Johnson Controls.
How are you doing, sir?
I'm very good.
Thank you.
How are you?
I'm doing very well.
We're very excited to talk to our OEMs about the transitions that we're seeing in equipment.
So by now, hopefully everyone is familiar with the technology transition as well as
our refrigerant transitions.
So we're going to see a variety of new things in our product lines.
And so we're here to spend some time talking about new product lines from Johnson Controls.
So when we start talking about the A2L transition, could you give us some specific features or
enhancements about the new product lines and how we're going to see different efficiencies
and serviceability in new equipment?
Of course.
So I want to talk a little bit about some of the new portfolios that we have recently
launched and are going to continue to be launching here through the rest of the calendar year
in 2024.
So specifically in our residential HVAC portfolio, we've spent a lot of time in the last multiple
years refreshing our portfolio based on new regulation changes.
So if you look at the transition we did in 2023 with the DOE specific, we really raised
our energy efficiency standards to essentially the C02 rating for the North America markets.
As we head into 2024 and up to 2025, we're obviously focusing on really two types of
portfolio refreshes.
One is largely on the move to a low GWP refrigerant.
So Johnson Controls has selected our 454B as our new refrigerant for our residential and
light commercial HVAC portfolio.
And simultaneously, we're also taking the opportunity to really focus on not just the
transition to new logic GWP refrigerants, but also focusing on feature enhancements
that really help our contractors.
We've gotten a lot of feedback and done a significant amount of voice of customer relative
to things that not only improve the performance of the unit for homeowners, relative to things
like improving the energy efficiency in their homes and lowering their electric utility
bills, but also things that are important for our contractor base around serviceability
of the units and most importantly, on decreasing the amount of time it takes for the units
to be installed.
So things like placement of where the valves are located to call it charging and charging
specifics around the amount of charge in the unit that help essentially get our contractors
in and out in a much faster and more efficient way so that they can complete more installs
in one day than they have with some of our previous generation product or some of the
product of our competitors.
So we've done a significant amount of tear down analysis between our units and those
of our peers in the industry so that we could really understand what's most important for
our contractors and what's most important for our end users and we've incorporated tens
and twenties of different types of features and things in each of the models that are
coming out in our new generation products that we know are going to be very, very much
welcome for our contractors and consumers alike.
Yeah, absolutely.
We're going to move into an age of new generations of technologies.
As the technological advancement of our age advances, it's inevitable that we're going
to see more advanced technologies in our equipment and I love it.
I'm a controls and automations guy so I think it's fantastic that we're starting to get
a little bit more advanced in our residential sector as we should and so we're very grateful
that Johnson Controls is doing this.
When we look at refrigerants, we're primarily going to see two refrigerants in the residential
and light commercial sector, R32 and R454B.
Do you know, were there some determining factors for Johnson Controls going with R454B over
R32?
So we're actually going to use both.
So we're using R454B in our residential ducted portfolio and we're using R32 in our ductless
portfolio.
And the reason we chose R454B in our residential ducted and light commercial ducted portfolio,
I should say, was really because there's a couple of reasons.
One is it had a lower GWP number and so as we work really closely with the EPA and what
the next lowering threshold will be for greenhouse gases, we wanted to stay ahead of the game
and we wanted to make sure that when contractors and homeowners were putting in our new generation
portfolio, that as well as our distributors, frankly, that there's a healthy level of inventory
and product going out to the consumers that essentially would be ahead of the game if
and when I should say the EPA takes their next step down.
So very, very important for us to really be ahead and make sure that we have a sustainable
path, not just for the environment, but for us from a product line perspective as well.
And most of our peer sets have followed that suit relative to choosing 454B.
On the ductless side of the house for North America, we moved to R32.
That was largely being driven by most of our Asia-based populations where our peer sets
that are largely based in Asia have chosen to go to R32.
It's a little bit of an easier drop in from our 410A to go to that.
And so we know that there's another change that's going to need to happen.
But because of how large our overall installed base is in Asia, as well as how much product
we have from the ductless side going to Asia, it was more driven by the market demand to
move to R32.
And so we wanted to make sure that we're in line, not just with our installers and contractors
overseas outside of the domestic United States, but also with our distributors and the regulatory
bodies outside of North America.
So that's the reason we went to R32 for the ductless portfolio.
And we chose to go to R454B for the North America portfolio.
No, I appreciate you explaining that.
It makes a lot of sense.
And when we start talking about both refrigerants, R32 and R454B, those are both A2L classified
refrigerants.
And we spent a lot of time here at Esco talking about the different ASHRAE flammability classifications.
And A2L really doesn't have much flammability to it.
A lot of people don't realize that even R410A and all refrigerants have a flammability to
it.
Just so significantly low that we didn't utilize any type of refrigerant leak detection in
the past for A1s.
But industry-wide, we're going to start utilizing some refrigerant leak detection.
And it really kind of comes down to the installation, the design, and the refrigerant charge.
So some systems are going to see some refrigerant leak detection.
And can you tell us a little bit about what we're going to see?
What kind of product lines will we be utilizing that in?
So I think it's important to understand that A2Ls are mildly flammable.
They're not necessarily...
There's a bit of an education that still needs to happen relative to understanding the flammability
itself of these types of A2Ls.
And also as well as when we move to naturals.
So I think there's a transition that's going to be happening here over the next decade,
I would say, as we continue to advance as an industry here.
And so we are going to start to see, obviously, safety precautions on the units themselves
relative to the leak detection sensors that we have.
All of our new generation product line has the leak detection sensing both in our ducted
as well as ductless technologies.
So all of that's going to be already installed within the unit itself.
And so I think it gives consumers essentially a sense of comfort to know that if there is
a leak, it will be detected by the sensing technologies that we're embedding within the
mechanical equipment itself.
And obviously will generate the necessary shut off precautions to make sure that there's
no issue relative to from a safety perspective in the home or the commercial space.
So I think it's very, very important for us.
We're also spending a lot of time educating not just our contractor base, but also our
distributors and to a certain extent our end users on quite the flammability that is there
and really how flammable it really is versus is not.
So frequently we have quite a bit of demonstrations on the fact that H2Ls are not quite as flammable
as people think they are.
So the word mildly is very important.
And so I think it really comes down to still making sure we have the appropriate level
of safety precautions in the detection systems, but we're not necessarily over pivoting to
something as flammable as per se propane, right?
Which is a lot more flammable.
So we're doing that education continuously and all of our new lines have the appropriate
amount of detection equipment in it to make sure and integrating that into making sure
the units are safe for contractors and homeowners alike.
Yeah, I would say you've actually went above and beyond the expectations.
When we start talking about M1 classifications for H2L refrigerants, we're talking around
4.1 pounds or so for R454B before we start requiring mitigation.
So the fact that you're going to be implementing those into ductless systems for a product
line, that's just showing that you're stepping up that expectation and exceeding what those
industry standards are going to be.
So that's really cool.
I'm glad to see that.
Some manufacturers have not, and I've been wondering who is going to be able to really
step up that bar and set a new standard across the entire product line.
So thank you very much for doing that.
That's a very important move in the industry and I'm glad to see that.
It's a good difference.
I think we're really integrating that with some of our digital technology.
So if you think about in our ductless systems, we have for both our VRF technologies, we
have AirCloud Pro, which is our digital connectivity technology that not only helps installers
to determine the right amount of refrigerant charge, but make sure that the installation
is up to speed.
We're integrating that sensing technologies into that digital platform that's helping
our contractors guide them through our new generation, our 32 technologies.
And then we also have our AirCloud Home, which is more consumer based, but that's really
more for our ductless rack platforms and making sure that they are up to speed and can control
and do some command and control of the units themselves.
So all available in our new generation products, both from a rack pack and our new generation
top flow VRF.
So I'm pretty excited about those coming out.
Yeah, that's a lot of really good technology into a consumer market that hasn't really
been given those tools.
Now that homeowners are starting to utilize applications for monitoring refrigerators
and appliances, water conditions in their home, they're actually being more aware of
their built environment.
And so being able to have a connected system where they have a little bit more interface
with their comfort cooling and comfort heating products is a really nice add on.
One of the things that we do get questions about when we start talking about A2L equipment,
is there any common identifiers with your new product lines that will be utilizing A2L
refrigerants?
Yeah, so we're making sure that all of the appropriate equipment we have that is A2L.
So there is a couple of things.
Obviously, we're following the safety regulations and all of the necessary regulatory protocols
on labeling the units, making sure that they're very clearly identifiable when it comes to
which ones have our legacy refrigerant, as well as our new A2L refrigerant.
So those units will have the appropriate call it signage and labeling attached to the units
themselves.
But also one very easily identifiable will be we've launched a brand new color scheme
for our residential equipment.
And so we're very excited that our entire residential line is absolutely refreshed,
not just from the refrigerant and all the feature sets that I mentioned earlier, really
focused around ease of install and call it making sure that we have mechanical pressure
switches and clarified wiring diagrams and simplified wiring.
And as I mentioned, foul placements and all these different features we put into our residential
equipment, but also making sure that they look modern and refreshed for the consumers
themselves.
And so we're going to have a brand new color palette for our new lines of residential equipment.
So you will be able to easily identify that way as well as with the appropriate labeling
that we have coming out.
Now do we have an anticipation of when we're going to start seeing the residential line
of A2L equipment?
Yeah.
So we've released most of our new residential line already or are to be able to be ordered
for sale through our distribution partners.
And so the factories themselves are ready to go.
And so production's actually starting this month for our new A2Ls and all of our residential
and light commercial factories.
So we're absolutely ready to go.
We actually pulled in the launch of these new A2Ls because originally there was a little
bit of a later schedule for the launches so that our channel partners could liquidate
some of the legacy refrigerant inventory that they had.
But with some, call it uncertainty relative to sell through and other things, we wanted
our distributors to really be equipped and be ready significantly ahead of the January
1st, 2025 changeover.
So we've accelerated our launch schedule by about three months.
And so we're really excited to be one of the first to launch the A2L equipment into the
market for our partners, our contractors, and of course for consumers that want to be
sustainable and have a low GWP refrigerant system in their homes.
I hear a lot of investment.
Everything that I hear from you is how much Johnson Controls has invested into the industry
as a whole.
I've been to a lot of our equipment manufacturers and the amount of time that it takes to retool
a facility, the engineering that is involved.
Like you're talking about just going through wiring diagrams and changing color schemes
and re-engineering.
That is a huge investment from a manufacturer to be ahead of the January 1st, 2025 schedule.
That's a lot for a manufacturer to do and to be able to release an entire product line.
So how was Johnson Controls able to launch this entire product line way ahead of schedule?
Because there's going to be a lot of manufacturers that are going to be tugging at the shirt
tails because they're months and months and months behind Johnson Controls.
So I think it comes down to our commitment to our partners and to our contractors.
As we look at the commitment to the residential and commercial HVAC businesses and really
where the biggest impact of the regulatory transition is happening, Johnson Controls
has been at the forefront of making sure that we're working very closely with our distribution
partners and our installer contractors for them to be ready.
And so what that means is that requires us to be significantly ahead of that timeline
relative to the investments in engineering.
So we've dramatically increased the amount of engineering talent that we have from a
headcount perspective.
We've invested in new labs.
So we've expanded our labs in our Wichita, Kansas residential facility and our Norman,
Oklahoma commercial facility.
And so we've been retrofitting all of our factories to be, call it A2L production ready,
investing in new refrigerant charging systems, refreshing a lot of our assembly lines.
We've actually expanded our commercial HVAC facility in Norman, Oklahoma and doubled the
amount of output we have from that plant in order to keep up with the demand while simultaneously
being able to really retrofit some of our legacy assembly lines to be ready for A2L.
And most importantly, and something we're really committed to around decarbonization
and general sustainability efforts, we're really, really proud to have gotten a grant
from the government of the US in order to expand our Wichita facility on the production
of residential heat pumps.
So something really, really important and the team is incredibly busy working on new
production lines, which several of which are underway, one of which has just recently started
rolling units off the line here.
And so we're adding more heat pump lines in the United States.
So design engineered and manufactured in the US and we're really, really proud of that.
And we're going to continue to make that investment in the factory and add more and more domestic
heat pump capability for our Wichita, Kansas facility here.
Yeah, I do believe that that is the future of HVAC, that we're going to be leaning heavily
on heat pump technology.
I'm actually working on a curriculum right now for co-climate heat pump installations
and best practices from a educator perspective, doing introductory into what the next generations
of equipment are going to look like, because now we're starting to utilize technology to
expand the capability of our heat pumps.
And I really look forward to see some of these new products that are coming out.
I know you've been very active in the co-climate heat pump challenge and really pushing equipment
to new levels of not just efficiency, but comfort and capability and serviceability.
So the new products are really starting to head into a nice direction for the contractor
and for the installation service technicians.
Yeah, and we're really proud to be a part of the DOE's cold climate heat pump challenge
on the residential side, among some of our peer sets in the industry.
And so our unit has surpassed kind of the testing standards that we had set for ourselves.
And so we're really proud of that.
And the teams work very hard to get there.
And we're also one of the pioneers as well with the DOE on the commercial side for our
rooftops.
And we've been working very, very closely to launch the cold climate heat pump for our
rooftop segment.
And so Johnson Controls is really proud to be a leader in that space as well.
Excellent.
All right.
That is a lot of great information.
Any other topics you'd like to cover before we hop out of here?
I would say we're really excited to be a leader in the industry relative to our HVAC segment
at Johnson Controls.
We've been making a lot of investments around really the importance of low GWP refrigerants
and making sure that we have really strong engineering capabilities and our factories
are ready and our labs are ready.
But also we're working really, really closely with our distribution partners and our training
centers around the world to make sure that we have the availability of education and
communication to our contractor base.
And so we see that as something that is so incredibly important is to make sure that
our contractors feel confident in working with Johnson Controls and our residential
and commercial HVAC products.
So we're doing a lot of efforts there, both directly with our partners, but also through
our distributors and other types of avenues to make sure that we're ready for this transition,
where our partners are comfortable and call it confident in making sure that we're step
by step with them so that we can make the transition fluid and continue to provide best
in class products for homeowners and commercial building owners alike.
Excellent.
So for anyone wanting to follow up with this conversation and learn more about Johnson
Controls, resources for education, as well as new product lines, what is a good landing
place for them to go to?
So we provide you with the right Johnson Controls address from an IP perspective, and you can
definitely check us out at www.johnsoncontrols.com.
And there we do have learning resources for contractors specifically in the residential
space, but also for commercial.
We also have a residential light commercial training academy that's available for contractors
to sign up for and we'll get you these details to post along with the podcast.
All right, David Budzinski, president of Global Products.
I appreciate your time today.
Thank you.
Good night.