4 Megatrends in HVAC


I’m going to boldly declare myself the first HVAC Futurist. Not because I’m some Nostradamus who can see the future, but because I’ve spent significant time looking at the HVAC trends that are impacting our industry and trying to predict what they mean for our jobs and lives.


So, without further adieu, here are the HVAC industry trends I think will reshape our industry, and how.


HVAC Industry Trend #1: The Talent Gap Grows


According to a HVACR Workforce Development Foundation report, 115,000 additional HVAC technical jobs will be needed by 2022 to fill demand for install and service. But as the experienced Baby Boomers retire, too few young workers take their place creating a shortage of techs and that is only going to get worse in years to come. This is a well-documented issue and many are speculating as to what will come of it.


I foresee companies changing their culture to attract the Millennials and Gen Z, the latest generations hitting the workforce. Companies will adopt more, and more advanced, technology. Gen Z is the first generation of digital natives. They are always connected and online. They expect their companies to be the same so HVAC companies will have to stay abreast of HVAC technology trends and implement it in their office. They’ll need to think more like Google and less like ACME Heating & Cooling. That will be a hard change for many to make.


I also foresee HVAC companies having to pay higher wages and offer better benefits to techs. It’s basic supply and demand at work. Techs will have a choice of several companies to work for, so they will choose the ones that offer the best overall package. Pay, benefits, training and culture will all impact whether a company can attract and retain techs, so they will invest in those areas out of necessity.


But a bigger outcome of the talent gap I see is HVAC trend #2.


HVAC Industry Trend #2: A Move to the Gig Economy


As the talent gap widens, I foresee many technicians moving to the Gig Economy. Already 53 million freelancers contribute over $700 Billion to the US economy according to Fabio Rosati, CEO of Upwork.


As demand for technicians outpaces supply, good techs will realize the way to maximize their earning potential is not with one HVAC employer, but by freelancing. That way they can charge a higher rate and they get all the other flexibility and benefits of a gig worker.


At some point, a platform for the HVAC gig worker will arrive on the scene. The Uber of the service world, if you will. The platform will make it easy for these freelance techs to find jobs, collaborate with clients, and get paid on time. Homeowners and techs will be directly connected.


Even with HVAC trends leaning towards the gig economy, I don’t foresee HVAC companies going away. There will still be a large number of end consumers who will want to deal with a company and not a freelancer. They will want a company that stands behind its work and has a solid reputation. Just like Uber hasn’t killed off taxis, gig techs won’t kill of HVAC companies, but they will change the landscape.


HVAC Industry Trend #3: Solar Means More Electric Heat, Less Forced Air


Solar energy is growing. It’s a fact. Ignore it if you choose but that won’t change the fact that utility-scale solar is soaring and residential solar continues it’s slow-but-steady headway. I won’t get into the details about the increases in efficiency and lower costs per kwh, or that many states are pushing a solar agenda. Instead let me prognosticate on what it means to HVAC companies.


The real impact is going to come from utility-scale solar. It’s already 31 times higher than a decade ago and still growing. When costs drop below natural gas (in some areas they already have), people will turn to electric heating and cooling options. I predict that natural gas (and oil) forced-air systems will be replaced by electric heat. Maybe designer heater wall panels or back-to-the-future baseboard heaters. If big box systems go the way of the dodo bird, it will have a large impact on your install and service work.


HVAC Industry Trend #4: Artificial Intelligence & IoT


IHS forecasts that the number of IoT (Internet of Things) devices will double by 2022 and quintuple by 2025, jumping from 15.4 billion devices to over 75 billion. That’s a lot of devices! And it’s not far fetched. In my house alone I have 16 connected devices that I can think of (4 iPhones, 4 iPads, 2 Hue smart lightbulbs, 1 Fitbit, 1 Samsung Smart TV, Google Home, Google Chromecast, an xBox and a Playstation 3). And I’m looking to add a wifi thermostat soon. Count up your connected devices and I’m sure you have more than you thought. 


That’s a lot of data flying around the air. Data that will be turned into revenue. 


Successful HVAC contractors will be the ones to offer services around a consumer’s data. Monitoring and acting on data coming from consumer devices will be big. Contractors will charge an ongoing fee for this “data & service” package.  After initial resistance, the idea of recurring revenue from data and service will become the norm for HVAC companies. 


I also predict that Artificial Intelligence (AI) will be baked into most future energy equipment. These systems will be able to predict a breakdown before it happens and recommend steps to rectify issues before they escalate. As the AI capabilities grow, systems-techs-consumers will carry on three-way conversations about what is needed to keep homes safe and efficient. Conversations will be natural and ongoing, perhaps aided by personal assistants like Google Home, Amazon Echo, or others. 


With IoT and AI playing a big role in the industry, HVAC will suddenly become a “cool” market… pun intended. 


So there you have it. I gazed into my crystal ball and outlined a future for the HVAC industry that will be scary for some, exciting for others. Of course this is only my perspective. I’m sure other HVAC Futurists would disagree or have different takes.


Are you an HVAC Futurist? I’d love to hear your take on what these HVAC trends mean to our industry. Email me at paul@coolfront.com and let’s chat.


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