The Smart Bet is on Smart Systems

The industry has been talking about smart systems for several years, but in 2014, a number of factors come together to make this the year that smart systems see widespread adoption.

When we look at the overall HVAC market, we see our growing cloud-based infrastructure, the demand for high-end controls, sales of high-efficiency heating and cooling systems and growing interest from homeowners and facility managers all driving the adoption of smart systems.

Smart Market. Coming off good growth in 2013 with unitary, furnace, water heater and appliance markets up high single or low double digits, 2014 should continue to strengthen in the mid-single digits. U.S. residential fixed investment is forecast to grow again for the third straight year and single family housing starts should be at roughly a 1 million unit rate this year. As I write this article, the first strong winter front is rolling through the Midwest and with a normal weather year, we should also see some increase over prior years on the service side of our industry. From a market standpoint, our industry should have overall underlying strength in 2014, which is a key foundation to ensuring the growth and development of smart systems.

Smart Infrastructure. In the past few years, there have been some important steps made in technology that we believe are going to drive faster adoption of connected homes and increase the ability to remotely manage a residential home or a retail facility. Certainly, Wi-Fi capability and reliability have driven a lot of that. But another key factor is the ability to now build very cost-effective cloud architectures by which we can remotely manage lots of data, which allows us to optimize the reliability and efficiency of all types of facilities. This capability is generating more focus on enabling technologies such as distributed controls, wireless thermostats and remote monitoring capabilities.

Smart Controls. The ability to remotely control an HVACR system has been around for many years, but the cost to do it is dropping, and the number of companies offering connected solutions is increasing dramatically. This year, we are going to see more sophisticated ways to integrate energy efficiency, demand response or variable rate energy costs and system control into personal devices like phones and tablets.

The limit to what a thermostat will become is not a factor of the hardware on the wall, but the cloud solution behind it. Thermostats and controls don’t need to become much smarter, but the way we use data from the thermostat and the system to engage the homeowner or facility manager will define the smart system of the future.

Smart Efficiency. As the construction market improves and home values are returning, we are starting to see the rise in communicating systems and high-efficiency residential systems at 16-18 SEER and beyond. With both homeowners and businesses investing in efficiency, we are starting to see business models that allow both contractors and owners to remotely track the performance of the HVACR systems and dispatch contractors if there is an issue.

Smart Business Models. As we move forward with smart systems in 2014, contractors are going to need to be comfortable working with consumers and facility managers to connect and use these technologies. For manufacturers, creating simple step-by-step instruction, using mobile apps and video, will be important to support contractors and ensure the confidence of smart system owners.

Homeowners and facility managers need to be informed on both the availability and benefit of information coming from their HVACR systems. Contractors need to help their customers understand that smart systems can help notify them of the warning signs of system failure.

Contractors are used to fixing systems or selling service contracts for potential issues. This year, they will need to move to a model where they can show their customers that real, actionable information can be available from their system to save them money and keep them comfortable.

Geoff Godwin is vice president of Marketing, White-Rodgers. Visit www.emersonclimate.com.