SCE/ACCA Market Conditions & Consumer Considerations

A significant market opportunity for improving the quality of HVAC equipment installations and service involves raising the awareness of consumers and building owners / operators about the benefits provided by professional contractors following industry-recognized quality installation practices (e.g., correct equipment selection, installation, and commissioning). Building owners / operators and residential consumers need to be informed of the links between comfort, humidity levels, utility bills, and indoor air quality with a proper HVAC system design and installation. Once aware, consumers will better understand the value of a high performance standard from their HVAC contractor. This understanding will also help position consumers and building owners / operators to consider the complete value-to-cost equation, not merely the "first price," when making HVAC equipment purchasing decisions. Customers who select contractors that promote high performance HVAC equipment - and their proper installation ¬enjoy enhanced comfort, reduced energy usage, improved occupant productivity, and enhanced occupant safety.

Of the 7.1 million unitary shipments reported by the Air Conditioning and Refrigeration Institute (ARI) for 2006, approximately 60% were for replacements. Many of these installations were the result of equipment failures during peak periods (i.e., winter for furnaces and summer for air conditioners). During times of unanticipated equipment failures, consumers often demand service attention that cannot be fully met by normal contractor staffing levels. This issue is compounded by a shortage of qualified technicians, especially experienced during seasonal crunch times. Furthermore, consumers generally tend to request only the level of comfort and efficiency delivered by their previous system. Given that consumers want the heating or cooling to be restored, and that contractors feel pressure to replace the equipment quickly, technicians have an incentive to focus more on the turn-around time of the jobs rather than on the quality of the jobs. Exacerbating this situation is the fact that few consumers plan for such emergencies. This results in a financial crisis in which the "first cost" of equipment is considered more important than full "life-cycle costs." The building owner's/operator's failure to link comfort and operating costs with substandard design and installation can be tied to the industry's general lack of performance in raising awareness. The market currently provides no signal to the contractor or the building owner / operator that system performance is poor until the system fails.

Due to poor understanding by building owners / operators of the value that professional contractors and quality installations offer, there is a consumer market for an unlicensed, or poorly trained, or otherwise unqualified individual or business to install HVAC systems. Unlicensed, unskilled, unscrupulous, or no caring contractors are inclined to cut corners and to offer prices and performance promises that are difficult for professional, qualified contractors to match. Uninformed consumers are left to experience the inevitable inconveniences and expenses of a poorly designed and poorly functioning HVAC system. Manufacturers experience higher warranty costs, and utilities face escalating demand for power. Additionally, many of these under-qualified/non-professional contractors will often provide valueless warranties, have little or no insurance, and create poor perceptions of the industry in the consumer's eyes.

Industry Need

There is a need to establish a raised bar to improve the core competencies of contractors to ensure that quality installations ensue. This is beneficial not only as a process improvement for contracting businesses, but, more importantly, for fulfilling the needs of building owners/operators in quality installations - comfortable, healthy, safe, energy-efficient indoor environments. Yet, until now, across the broad spectrum of the industry (manufacturers, distributors, contractors, user groups, customers, utilities, environmental groups, associations/professional societies, governmental agencies, etc.), there has been no universally accepted definition of a quality contractor or a quality installation.

HVAC QI Specification

Full observance of the quality installation elements may increase the initial "cost" to the residential or commercial building owner/operator. However, the increased "value" - resulting from improved energy efficiency, better comfort, enhanced IAQ, improved equipment reliability, longer equipment life, etc. - is expected to far exceed any added upfront price. Additionally, adherence to the elements in this specification provides intangible societal benefits in the form of reduced power grid energy demand that aids in reducing pollution and dependence on foreign oil.