HVAC


Bad Mouthing the Competition

Should you ever badmouth your competitor?  Of course, everyone says no, and this is backed by virtually all of the business research on the subject.  Okay then, done deal.  Wait, not so fast.  It’s not that easy.  Anyone who has been in sales for any length of time will tell you that there is always a particular competitor or two that just gets under their skin.  Perhaps that competitor is cheaper, perhaps they are larger and seem to have so many more advantages, and perhaps they even badmouth you.  So, how should you handle these situations and what disciplines do you need to bring to the task?

 

Bad Mouthing the Competition

 

First, the disciplines.  Bad mouthing the competition arises from frustration, an emotion that, while understandable, is under your control.  You have to decide who is going to be the adult in the room.  If you decide that you are only going to talk about your competition in a professional manner, you have to communicate that to everyone of your sales people, service people, office staff… in essence, everyone in your company who talks to the public.  Now for the hard part.  You have to demonstrate that in your behavior every single day.  As we said above, it’s not that easy, but you can establish a culture to this effect as long as you demonstrate leadership, fortitude and persistence – even in the face of potentially outrageous behavior by your competitor and their salespeople.  “That’s fine,” you say… perhaps a bit sarcastically.  So just how do you do this?

 

First, realize that this consumer has contacted you because they have a problem that is, as of yet, unresolved in their mind.  If they had full faith in the competitor that was bad mouthing you, they would have already made the purchase.  That sets the table for you to show the consumer how you have solved this/similar problems for other customers in the past.  Second, don’t merely be dismissive of your competitor.  If you are, you are being dismissive of this customer.…  which does not help to build trust in their mind with your organization.  In addition, you are losing a great opportunity to create an image of your competitor built in the likeness of your choosing.  Your company’s marketing people, with the involvement and approval of senior management, should put together and regularly update a narrative about each of your major competitors that helps potential customers better understand the differences in a way that clearly differentiates your company.  Anyone in your firm who touches the public in any way needs to be thoroughly familiar with these narratives.  What are the elements of this narrative?

  • When your customer tells you about your competition and/or about what they have said about you, first take a deep breath. Then, instead of responding directly, talk about your company on a philosophical level.  Tell the customer why your organization went into business and how you view customers in general.  For example, you could tell a customer that the owners of your firm were frustrated by what they saw as a lack of problem-solving/professionalism/whatever it might be in the geography served, and they went into business in order to understand every single customer’s needs so they could respond professionally and appropriately to those needs.  This is a critical step.  It is much more important for all your customers to understand what your organization stands for, rather than see how you will respond to a tit-for-tat bad mouthing game.  In a manner that is as honest as you understand it, explain how this contrasts with what you understand to be your competitors focus.  For example, your philosophy might be to first understand your customer’s situation in its entirety before you begin to apply solutions.  That would include understanding the health of their duct system, the integrity of the building envelope, the operating effectiveness and efficiency of all mechanical equipment, the health of the indoor environment etc.  Explain how your philosophy is to keep a customer for life, working with them over time to make their home as efficient and comfortable as possible.  Your competitors focus for example, might be to respond to demand service calls, fix the customer’s immediate problem and move on.  There is nothing inherently wrong with either approach, but it sets the table for you to differentiate your firm.
  • Next, provide general examples of why your approach is superior. For example, talk about customers whom you first came into contact with because of a problem they were having, and how your relationship over the years has benefited this customer by solving problems the customer never knew they had, which led to a big improvement in their overall satisfaction.
  • Finally, pivot to this customer situation. Demonstrate not only how you can solve the immediate problem, (which is likely the only one your competitor talked about) but also show the customer some things they can do to improve their environment/efficiency etc. now as well as some things you can work with them on over time to mitigate future problems/improve their indoor environment/reduce their operating costs etc. down the road.  Done correctly, your customer likely won’t even be thinking about your competitor at this point.

 

In the end, all the consumer really wants is to have their problem solved at a price they can afford, (notice I did not say the cheapest price) by a company they feel they can trust.


The Ultimate in Indoor Comfort

When your business receives a call for service, what does your technician do?  Do they just go out and make the repair that the homeowner needs, or do they also make note of conditions needing attention?  Do you see your company as being in the HVAC business or the indoor climate business?  If you’re in the HVAC business, you typically make the required repairs during the service call and check out the system to make sure it is operating correctly in all other areas.  If you’re in the indoor climate business you do this as well, and you also take note of conditions relating to filtration, energy efficiency, temperature, control systems and humidity.  Note that this involves more than just the heating and cooling system, it also involves the building itself.  An acronym to remind yourself of this is FETCH.  (Filtration; Energy efficiency; Temperature; Control Systems; Humidity)  “But I don’t want my service technician to be a salesperson,” you say.  Well, that’s the thing.  They don’t need to be.  All they need to be is observant, and make note of all of the items contained in the acronym.  Let’s look at each of these in a little detail.

 

Indoor Comfort Involves A Lot More Than Just HVAC

Indoor Comfort Involves A Lot More Than Just HVAC

 

Filtration: Ask the homeowner if they have allergies.  Note if they have any animals, if there are lingering odors or if it looks dusty in the home.  Make note of what type of filter they have on their system, and what condition it is in.  Also make note of the condition of their evaporator and condenser coil, to make sure they are not blocked by debris.

 

Energy Efficiency: Capture the model and serial number of the furnace, evaporator coil and condensing unit.  From that you can determine equipment size and age, matching compatibility and energy efficiency ratings.  Also make note of basic envelope issues affecting thermal efficiency such as the amount of insulation in the walls and attic, whether or not a radiant barrier is present, general condition of the windows, the square footage of the home’s footprint and the home’s age and geographic orientation.  (North/South/East/West)

 

Temperature: Ask the homeowner if there are any areas of the house which are hot or cold during winter or summer.  Also asked them if they are typically comfortable where the thermostat is currently set, and make note of that temperature setting.  If they complain of inadequate cooling, make note of the load conditions that might be causing that.

 

Control Systems: Make note of the brand and model of thermostat they have in their home.  If it is a setback type thermostat, ask the homeowners if they make use of the program in the thermostat to save energy.  Also asked them about their general occupancy schedules.  Keep in mind that according to one recent study, only 30% of the people who have a programmable thermostat actually use them and 23% don’t have a programmable thermostat at all.

 

Humidity: Take a humidity reading in the home, and make sure that the device you’re using is regularly calibrated.  Ask the homeowner if they feel comfortable when the air conditioner is running or if they get shocked during the winter, knowing that humidity levels can be a factor in home comfort during both winter and summer weather.

 

Just think of the powerful information you can gather about a homeowners needs just by making notes and asking a few basic questions.  This only takes a few minutes of the technicians time, but the information gathered is invaluable in helping your company build a relationship with that consumer based upon their specific situation and needs.  In the future when you contact the consumer through your marketing efforts, you will be helping them open their eyes about targeted solutions for needs they may not have consciously recognized.  The consistent application of this process will help you FETCH more lifelong consumers for your business, and all of it starts with the technician simply paying attention during a routine service call.


Does Your Business Stand out?

Does Your Business Stand out?

 

Stop me if any of this represents a shocking revelation.

1. People are not overjoyed to spend money on HVAC systems or repairs

2. Oftentimes, consumers focus on price because they don’t value this purchase

3. Most people don’t know who to call or trust for HVAC related purchases

 

These three facts can make life as an HVAC contractor difficult, especially if your business does not stand out from dozens of others in your trade area.  “We have great people,” you say.  Get in line, everyone else says that as well, whether it is true or not.  When is the last time you heard a contractor say, “Our people are iffy?”  Most likely, never.  This article is not about marketing channels.  You know you need to market your business through your website, through social media, through your service department, through targeted media etc.  This article is more about the message.  If you were to ask 100 consumers to name an HVAC contractor and state in one sentence what they stand for, I’ll bet less than 5% can do so.  Consumers are not tuned in to messages from our industry, so you need to find, for lack of a better word, a “hook” for your message.

 

Like many people, I have the TV on in the background as I am getting ready for work in the morning.  I normally have it programmed for the CBS morning news in order to try and keep up with what’s going on in the world.  There are two HVAC contractors who regularly advertise on this program.  The only reason I even pay attention to this is because I work in the industry.  One of the contractors makes it very clear that their business is all about good service.  The theme of the commercial, the visual images and their tagline all emphasize the same thing – that they deliver great service.  In all honesty, I cannot tell you what the other contractor stands for.  I see pictures of their warehouse with rows of furnaces and air conditioners stacked high, but that’s really the only take away I have from this commercial.  Perhaps their message is that they can respond to your needs very quickly because of their inventory, or perhaps that’s an image trying to reinforce some other message.  The point is, I don’t really know.  I catch these ads like other typical consumers, in bits and pieces, and I do not stop to watch more intently when they come on.  If that is the quick take away from someone who is in the business, imagine the impact on the typical consumer who is not really interested in spending money on our products in the first place.

 

The point here is to consciously think about whether or not your business stands out from all the other choices available to consumers.  What is your vision, your passion for your business?  How can you clearly and succinctly communicate that through the various channels your message travels in?  Solicit ideas from people in your company, your service techs, your installers, your office staff.  Look at other consumer related businesses for ideas, it is not necessary that you reinvent the wheel here.  Once you have defined that hook, make sure everyone in your business is aware of it – and delivers on it.  Every single time.


A Crisis of Trust

Source: supportforstepdads.com

The Annual Edelman Trust Barometer shows an overall reduction of trust in the four institutions it measures; the government, media, business and nongovernmental institutions.  In addition, the credibility of  “a person like yourself” – often a source of news and information on social media, has dipped to an all-time low in the studies history.  The survey shows trust falling more steeply in the United States than in any of the 28 countries surveyed, despite the robust economy and booming stock market.  The survey also showed that Americans’ trust in their own companies fell more steeply than in any other country.  Richard Edelman, head of the communications marketing firm that commissioned the research, said “The United States is enduring an unprecedented crisis of trust.”  Why is that, and could it be happening in your business?

 

The survey sites a number of reasons for this discord.  The past year has been one of exceptional public opinion volatility, and concerns about issues ranging from stagnant wage growth to mass shootings along with a number of others are juxtaposed against the buoyancy of a strong economy.  According to the survey, the result is an unsettled and unnerved public at large.  Particularly for business leaders, the survey suggests that this is not the time for inaction or staying silent.  Getting employees and customers to trust you can be complicated, but it is imperative to your success.  If lost, it may be impossible to recover.

 

According to Chelsea Berler of the Entrepreneurial Network, the following seven concrete actions build trust in a business environment.

  1. Demonstrate That You Trust Others. One way to do this is to be generous and forgiving when someone else makes a mistake or disappoints you in some way.
  2. Create Relationships That Are Mutually Beneficial. Customers and employees all want to believe they are making the right decision to work with you, and trust is about showing people you care about them.
  3. Directly Address Issues. How you deal with concerns and problems is what instills trust and loyalty.
  4. Tell the Truth. If you get caught in a lie, no one will trust you.
  5. Be Flexible and Patient. Trust is built over time, especially when you are dealing with someone who isn’t fortunate enough to have experienced trust in their own life.
  6. Respect Others Time. To earn others trust, raise your awareness of their time, personal schedule and needs.
  7. Deliver the Unexpected. The best way to deliver trust is to delight clients and customers.

 

Click Here, For more information on this topic from this article.

 

Sources: The Edelman Trust Barometer; Chelsea Berler, Entrepreneurial Network


The Amazon Effect

Howard Schultz, Starbucks’ longtime CEO and current Chairman, says the retail industry is facing critical challenges.  “For every consumer brand that exists today, especially a brick-and-mortar retailer like Starbucks, there are very unique challenges because there is such a seismic change in consumer behavior – the Amazon effect,” he said.  That’s not really news, anyone who has been paying attention knows that Amazon is reshaping the retail landscape.  But beyond vague awareness, what are the numbers?  What is really happening?

 

Amazon started with books, then went to selling virtually… Everything.  Sales of electronics and general merchandise have have increased in the range of 2-3% year-over-year since 2007, while e-commerce sales of these items have increased in the range of 14-17% during this time.  That means more and more sales in this category are happening online than in a brick and mortar store.  Sales at Amazon however in this category have increased 28-74% year-over-year during this timeframe, which means an increasing number of these online sales are happening through Amazon.  According to a 2017 Forbes article, “Amazon’s entry into a market segment reshapes shopping dynamics, upsets the supply chain and exerts tremendous pricing and margin pressure.  Store closings are followed by bankruptcies and once proud and dominant retailers are teetering on the brink.”  Amazon now accounts for approximately 43% of all e-commerce sales.  Can this go on forever?  Maybe, and while the Amazon Effect may be good for consumers today, there may be a reckoning in the long-term.  According to Forbes, Amazon isn’t required by its investors to make any real money.  Amazon shareholders provide huge subsidies to its delivery operation, and according to one analysis, Amazon lost $7.2 billion on shipping costs last year alone.  That’s billion, with a B.

 

Source: Marketingsherpa

Source: Marketingsherpa

 

What does that mean for the HVAC industry?  Certainly, the industry is not immune from this phenomena.  A recent ACHR article cited research by an HVAC manufacturer that showed 43 websites selling HVAC equipment direct to consumers, and these websites collected more than 40 million hits.  The article points out that as ominous as these figures might seem, the closing rate for these Internet resellers was only around 3%.  That suggests that consumers were using these websites more for education than for purchasing.  Part of their education however includes obtaining better information about the price of equipment.  That has implications for every contractor, because today’s consumers want to know what things are going to cost before they buy.  They (read millennial’s) are much less likely to be okay with time and material estimates or convoluted explanations of what things cost.

 

When big-box retailers first came on the scene, there were predictions of the demise of traditional contractors that didn’t come true.  Do not confuse the Internet phenomena however with the advent of big-box retailers.  Internet information and sales are here to stay.  The above-mentioned news article asks contractors what they will do if they are approached by consumers asking them to install equipment purchased online.  Predictably, many contractors will stiffen their back and say they will never bow to such transactions.  The question is however, is that the smart move?  When your labor is fully productive and you have more sales than you can handle, perhaps that is the smart move.  But that is not always the case, is it?  Does it make sense to ignore ways of productively engaging your labor when you are otherwise keeping people employed by having them clean the shop or the trucks?  So what should you do?

 

The first thing you should consider is to go to flat rate pricing if you are not on it already.  This allows you to be upfront with consumers about what things will cost without going into mumbo-jumbo.  It also allows you the opportunity to properly price your payable hours as billable hours.  Secondly, you have an advantage over a retailer who is selling widgets over the Internet.  You have an applied product, not something that is plug-and-play.  The Internet can’t (at least yet) replace your technical skills and your ability to diagnose all of the thermal characteristics that have impact on a consumers energy consumption and comfort.  With that in mind, you can create a complete menu of flat rate priced services for the consumer who wants you to install equipment purchased on the Internet.  For example, you can have a fee for examining the structure to make sure it is properly matched to the purchased equipment.  The examination of the home required for that transaction allows you to examine the condition of the thermal envelope, ductwork and commensurate leakage.  It also allows you to investigate the presence of other items of potential interest to the consumer, such as areas of insufficient comfort, smart thermostats and IAQ options.

 

The point is, you can either treat Internet buyers and inquiries as hostile to your business or as leads for your business.  As the ACHR news article says, “What is your strategy?”


Are You Going to Get Your Fair Share?

We have heard the term “fair share” a lot in recent years, most of it has to do with if you are paying it.  Unless you have been living under a rock however, you know these are good times for the economy.  How good?  Consider these statistics.

 

According To the Joint Center for Housing Studies at Harvard University, homeowner expenditures on improvements and repairs will rise 7.5% in 2018 to approach $340 billion.  According to Freddie Mac, 3 trends will drive the mortgage market in 2018.  They expect increases in new home mortgages, they expect a cooling of refinancing to lower interest rates, and they expect an increase in homeowners tapping home-equity for home improvements.  Existing home sales are unlikely to increase due to limited inventory, so there is an expectation in longer-term treads toward aging in place – all of which point to an increase in expenditures for home improvements.  Of course, those home improvements include many things other than HVAC, but according to Appliance Design magazine, shipments of central air conditioners in the United States increased 6% in 2017 and are expected to increase another 5.4% in 2018.  The shipment of forced air furnaces are expected to increase 4.7%.  You get the point, things are booming.

Are You Going to Get Your Fair Share?

How is your company positioned to take advantage of these trends?  Do you have a business plan that you are working in order to achieve purposeful, sustained growth, or are you one of those firms that will experience “accidental growth”?  What is accidental growth?  That is the type of growth you experience because of the swell of market demand – and the type that disappears when the inevitable pendulum of the business cycle swings the other way.  If you are a medium to large sized firm, you are operating by plan, and not by accident.  But according to SICcode.com, there are 141,922 total companies in SIC code 1711, and these companies employ a total of 1,435,932 people.  What is SIC code 1711?  A Standard Industrial Classification (SIC) is a four digit numerical code assigned by the US government to business establishments to identify the primary business of the establishment.  SIC 1711 is the code assigned to special trade contractors primarily engaged in plumbing, heating, air-conditioning and similar work like sheet metal.  According to these numbers then, the average size of a company in SIC 1711 is 10 people.  While there is a significant deviation to this average, this effectively means there are a lot of small contractors in the heating and air-conditioning industry, and amongst this group are a lot of firms poised for “accidental growth”.  If you are one of those companies and accidental growth is okay with you, read no further.  If you are one of those companies however that desire purposeful, sustained growth, how do you go about achieving it?  In essence, the answer is to develop a sound business plan.

 

The term business plan is an anathema to many small firms, but such a plan need not be long or complex.  It needs to be what is effective and usable for your firm.  While this topic merits a discussion by itself, the key elements of a business plan include:

  • Strategic Discussion ~in other words, what kind of business do you want to develop into and what are your strengths and weaknesses relative to that strategy?
  • Market Analysis ~in other words, what are the opportunities in your locale and where do they exist?
  • Sales & Marketing Goals ~what are your top line revenue, gross margin and net profit goals, by major department? (I.e. new construction, replacement, service etc.) How many leads are you going to need to reach these goals, what are your closing ratios on these leads and what kinds of marketing/advertising will be required to generate these leads?
  • Production/Organization ~what is your current staffing by department, and what will be required in order to achieve your sales goals? What is the productivity of your service department (billable versus paid hours) and what are your strategies to meet commensurate goals?
  • Financial Requirements ~what is your current cash flow position and how will you fund future growth?

 

The above isn’t intended to be a template for a business plan, rather it provides a discussion framework for the major elements that need to be included in such a plan.  There are many places you can go to get help building a business plan.  There are online forums and tools for this purpose, you can tap into the expertise of other company owners you know or meet through associations such as the Air Conditioning Contractors of America, you can talk with the manufacturer whose products you represent and/or their distributors – there is literally a wealth of information out there for you to take advantage of.  If you want to grow your business however and you have not put together some type of business plan, now is the time – because time is a wastin!

 

 

 


The Other Side of the ASHRAE Show

When one thinks of the annual AHR Expo, a.k.a. ASHRAE Show, one thinks of the giant product exposition that showcases thousands of exhibitors showcasing new products, technologies and ideas.  All of that certainly is true, and this year’s Expo is no exception.  The ASHRAE Show this year will be at McCormick Place in Chicago, from January 22-24.  If you have never been to McCormick Place and are planning to attend this year’s event, bring your most comfortable pair of walking shoes!  McCormick Place is the nation’s largest convention center with over 2,600,000 ft.² of exhibit space.  Fortunately for your tired feet however, the AHR exhibition will only consume 500,000 ft.² of that.

 

The Product Expo – ½ Of the Show

The Product Expo – ½ Of the Show

What many contractors may not realize however is that the product Expo, massive as it is, is not the only reason to attend the ASHRAE Show.  There are a lot of educational opportunities at the show which one should not miss.  These educational opportunities are not just for engineers, there are many seminars of interest for contractors as well.  In all, there are 201 separate seminars being offered at this year’s show, and they typically fall into one of four categories.  These include, New Product and Technology Theater seminars, Free Seminars, ASHRAE Learning Institute Courses and Certifications & Other Exams.  Each of these segments is examined briefly below.

 

New Product & Technology Theater

Learning Opportunities – The Other Side

Learning Opportunities – The Other Side

No advance registration is necessary for these sessions, all of which are held in either Theater A,B or C.  These are not just for commercial contractors either, these are presentations by exhibitors at the show, each lasting approximately 20 minutes.  Diverse topics range from Dramatically Improved Flaring of Copper and Aluminum Tubing to Motor Solutions for Low-Speed Direct Drive HVAC Systems to The Latest Innovation in Home/Building Thermostats and much, much more.

 

Free Seminars

There are more than 50 free seminars on a range of topics, conducted by top industry experts lasting from 1 to 2 hours.  Again, the seminars are wide ranging and include diverse topics such as Solve Your Tech and Marketing Problems with One Metric to Global Trends in HVAC to Solve Hidden Maintenance Issues Using Testing and Balancing and much more.  Advance registration is not required for these courses.

 

ASHRAE Learning Institute Courses

The Institute will offer continuing education courses at the convention center, and these do require advance registration and payment.  Each full day course will earn attendees 6 Professional Development Hours/Learning Units, or 0.6 CEU’s, and half-day courses earn 3 professional development hours.  Topics include The Fundamentals of the Commissioning Process, Complying with Requirements of  ASHRAE Standards, Laboratory Design Basics And Beyond, Optimizing Indoor Environments and more.

 

Certifications & Other Exams

The following review sessions and exams will be available at the 2018 show.  These also require advance registration and payment.

  • NAFA Certified Air Filter Specialist testing & two hour tutorial
  • AABC Commissioning Group workshop and exam
  • HVAC review and NATE testing
  • Various ASHRAE certification exams

 

If you are going to the show, Do Not miss these terrific educational opportunities.  With a little advance planning, you can multiply tenfold the value of attending the exposition.  Please see this link for the full schedule of educational opportunities for each day of the show.


 


Christmas Marketing Tips for Your Business

Chances are that business is a little slower for you in December than at other timesof the year.  People typically focus their buying attention and dollars on Christmas gifts and holiday shopping, and not towards their HVAC and plumbing needs – except for emergencies, of course.  Therefore, your office staff is probably not quite as busy as they normally are, and the phones are not ringing as vibrantly as they usually do.  Similarly, you are likely to have some unbillable time on the part of your service technicians this month.  So how do you turn this investment of payroll into an advantage for your business?  There are lots of ways, this article is simply meant to start getting you thinking about what makes sense for your business.

 

Office Staff

  1. Launch a 12 Days of Christmas email marketing campaign to your customers. Gather your staff and brainstorm what this list might consist of, it doesn’t have to all be about your business.  You could offer specials on things like furnace filters or humidifier pads, even demand service or installation of accessories such as Wi-Fi thermostats.  You could also simply warm your customers hearts with the “best of” recipes for holiday treats from your staff.  The sky is the limit for ideas.
  2. Coordinate a Christmas theme on everything from your website to your social media to your blogs to mobile apps to your on hold messaging.
  3. Market things you are doing with your service technicians to your customer base. Send press releases to local news or trade publications regarding gratis services that your company is providing.
  4. Have your service staff decorate the office in a holiday theme.
  5. Tie your office staff into any charity related events that you are doing with your service technicians in #3 below.

 

Christmas Marketing Tips for Your Business

Image courtesy of Pinterest

Service Technicians

  1. Think of a product offering that is holiday themed. Think of the drinks offered by Starbucks only at this time of year – Peppermint Mocha etc.  If you are primarily in an air conditioning market that sometimes still needs heating, (i.e. North Texas) perhaps advertise a “shockingly good offer.”  No one in North Texas thinks about having a humidifier, yet at this time of year homes drop to unacceptable humidity levels.  Perhaps give the humidifier away for free if people will pay the labor to install.  Wrap it around a holiday theme such as, “Yule Not Be Shocked at How Comfortable This Can Make You.”.
  2. Offer incentives to your technicians if they sell items as part of the “12 Days of Christmas” promotion, while they are already on a paid service call.
  3. Offer holiday services, such as installing and taking down holiday lights for your customers.
  4. You could allow your technicians to participate in programs to help those in need, utilizing unbillable time.
  5. Make your technicians available to run service calls for elderly or low income homeowners at a reduced cost or free basis.

 

All Employees

  1. Don’t forget to show your employees your appreciation for all their hard work at Christmas as well. This can be done in innumerable ways, but if you don’t do something – you may well become the Grinch!

Everything You Wanted to Know about Integrated Energy Efficiency Ratios (IEER)

Old-timers in the HVAC industry remember the days when we rated the efficiency of equipment according to its EER (energy efficiency ratio) rating.  This was calculated by dividing the BTU capacity of a unit by the wattage consumed by it.  This was a steady-state rating however, and did not recognize a units seasonality or real-life consumption.  Therefore, AHRI (Air-Conditioning Heating & Refrigeration Institute) developed the rating we use today known as SEER.  This is calculated by taking the cooling output of a unit during a typical cooling season and dividing it by the total electrical energy input during that same time.  This rating is only applicable to units under 6 tons.

 

Larger capacity units than this were rated according to their IPLV or integrated part load value.  This was a single figure based on part load EER, designed to reflect the operating efficiency of equipment under real-world rather than ideal laboratory conditions.  On January 1, 2010 a new methodology was adopted and defined as integrated energy efficiency ratio.  (IEER) This rating methodology was developed by AHRI as an improvement for unitary equipment, and covers all units, even if single stage.  It takes into account constant fan usage in commercial applications and includes mechanical cooling operation only.  Economizer’s and energy recovery is not factored into this rating.  IEER is defined as the weighted average of a units efficiency at four load points – 100%, 75%, 50%, and 25% of full load capacity.  More specifically, this is determined as follows.

 

IEER = (.02*A) + (.617*B) + (.238*C) + (.125*D)

Where:

A = EER at 100% net capacity

B = EER at 75% net capacity

C = EER at 50% net capacity

D = EER at 25% net capacity

 

Weather modeling for cities representing 15 US climate zones was used in developing this calculation and included the percent of time operating in the four net capacity load bins listed above.  Three end use sectors were chosen, office buildings at 40%, schools at 30% and retail spaces at 30%.  The 15 cities defining US climate zones included Miami, Houston, Phoenix, Memphis, El Paso, San Francisco, Baltimore, Albuquerque, Salem, Oregon, Chicago, Boise, Burlington, Vermont, Helena, Duluth and Fairbanks.

 

This rating provides a comprehensive view of larger capacity systems, and a units IEER rating should never be compared to its EER rating.  For more information, please refer to AHRI Standard 340/360, Performance Rating Of Commercial And Industrial Unitary Air-Conditioning And Heat Pump Equipment.

 


Will We Need 92% Efficient Furnaces in Texas?

Infographic courtesy of American Public Gas AssociationIn March, 2015 the Department of Energy issued a proposed rule mandating that all furnaces will have to have a minimum efficiency rating of 92% beginning in January, 2021.   The Natural Resources Defense Council recommended that efficiencies should be even higher.   The current minimum efficiency rating required by law is 80%.  This ruling would apply to furnaces sold to distributors as of that date, the rule does not comment regarding status of lower efficiency product existing in distributor inventory.  The American Gas Association filed a freedom of information act request with the Department of Energy to find out how they justified this proposed ruling.   In addition, many industry groups and manufacturers petitioned the Department of Energy against this ruling, citing increased costs to consumers that wouldn’t be justified by energy savings, as well as existing building and energy codes and physical limitations in older or multi family structures that would make such installations virtually impossible.  The Department of Energy remained silent on all this until September, 2016 when they released a supplemental notice of proposed rulemaking.  The rule encompassed 488 pages, not including an 1198 page technical support document.  In that notice, the Department of Energy refused to back off its rule mandating minimum 92% efficient furnaces, granting only a small exemption to furnaces of 55,000 BTUH or less.  As we all know, the number of homes that would qualify for this exemption is quite small.  This ruling could even affect the manufactured housing market, as furnaces for this application are typically designed to fit in tight spaces.  In addition, this ruling will likely cause consumers to continue to repair aging equipment, which is even more inefficient than today’s standard, non-condensing furnace.

 

Many industry groups think this rule will ultimately undermine energy efficiency, because they believe many consumers, especially those in the South, will be compelled to change their natural gas furnaces to electric heat pumps.  The due date for final comments to the Department of Energy was January 6, 2017.  Nothing has been heard since.  At this point, the industry is waiting to see if the new administration vacates or mitigates this proposed rule.  If it does not, many major industry associations and manufacturers have publicly stated they will sue the Department of Energy to keep the rule from going into effect.  Stay tuned…

 

 

Infographic courtesy of American Public Gas Association