It helps every industry when top executives get elbow room to talk about the larger issues of the day. We extended that opportunity to executives at six major companies to share their opinions. What could be better than seeing what top executives involved in hydronics are mulling over as they contemplate the industry?
Richard A. Soper, chief executive officer, Bosch Thermotechnology North America
The expansion of the nation’s natural gas distribution network is driving conversion from other fuels, especially oil. Bosch offers heating equipment fueled by multiple sources, and the market is driving us to develop more efficient hydronic heating systems. We believe the trend toward residential new construction or retrofit of multi-housing developments lends itself to the variety of configurations of heating and cooling equipment Bosch delivers. For example, the trend toward smaller, denser housing options requires more efficient, compact environmental systems, such as wall-hung boilers, combination boilers for space heating and DHW, geothermal heat pumps and solar thermal water heaters. Condensing boilers and water heaters offer high efficiencies and compact size (often requiring minimal or no floor space), and may be vented directly through walls or ceilings with lightweight PVC or polypropylene pipe. We are noticing that in areas that have been affected by flooding (such as from Superstorm Sandy on the East Coast), consumers or their insurers are insisting on replacing old heating units with fuel-efficient, wall-mounted boilers and water heaters.
Geothermal heat pumps offer efficient heating and cooling comfort utilizing the Earth’s thermal energy. Driven by federal, state or utility-sponsored subsidies, these systems are viable alternatives to traditional air-to-air heat pumps while providing significantly higher efficiencies. This year, Bosch introduced a new Buderus SB Series of commercial condensing boilers in two stainless steel models. The high mass SB Series can be used with multiple fuels – natural gas, propane or heating oil – and can attain a maximum efficiency of 98 percent to help lower operating costs in commercial buildings.
As we continue to innovate new technologies, the challenge for wholesalers is to balance inventory with growing customer demand for more efficient equipment, supplanting traditional hydronic heating systems. These new systems require knowledge of managing condensate and employ updated venting and control strategies. Bosch is committed to working with our professional contractors and installers – we’re investing in modern live-fire training facilities staffed by experienced professional trainers. We’ve outfitted mobile trailers with the latest “Bosch Complete” line of gas and oil-fired hydronic products, geothermal systems and accessories for improved air quality, to transport our training staff to our contractors’ locations.
This year, we’ve opened the Bosch Experience Center in an eco-conscious and sustainable housing community south of Atlanta. Inside the Bosch Experience Center, visitors find a broad array of Bosch products including heating and cooling equipment and energy-efficient appliances. This unique center functions as both a showplace for consumers and an educational facility for installers, contractors, builders and developers across the country who are interested in replicating the successful implementation of sustainable community housing.
Today, professional installers and specifiers face numerous decisions when recommending heating/cooling systems to their customers. They need to select and specify products that provide comfort, affordability, low operating costs and reliability over a long term. They also want to partner with a company offering technically advanced products supported with hands-on training, a strong warranty, technical support and outstanding customer service. Bosch Thermotechnology strives to meet those demands, while offering the most innovative, efficient and reliable products available for hydronic heating and geothermal systems.
Chris Drew, vice president, chief marketing & strategy officer, Burnham Holdings, Inc.
The last several years have seen the hydronics industry begin to morph from one stuck in time and slow to change, to one inundated by a variety of new technologies all expected to reduce consumers heating/ water heating costs.
Nowhere is this shift more evident than the hydronic markets along the East Coast where consumers are rapidly embracing natural gas as the fuel of choice. Where available, homeowners are taking advantage of the significant cost disparity and switching over their heating equipment to natural gas fired products; natural gas is roughly a 12th of the price per Btu, versus heating oil. The consumer’s quest for lower heating bills also carries over to their choices in heating equipment. The market for high efficiency gas fired equipment has grown rapidly over the last several years as homeowners look to wring as much energy as they can from their fuel. State and utility subsidies also are continuing to impact this market as the cost of high efficiency equipment is driven down by various incentives. As a result, the industry has seen a variety of new high efficiency technologies enter the market either as complete units from offshore manufacturers or as components incorporated into new boiler products by North American companies.
The challenge, however, is that as boilers hit the limits of what physics allows in regards to combustion efficiency, the hydronics industry needs to look more closely at how systems are retrofitted. The vast majority of boiler installations are done as replacements, and people are adding new high efficiency equipment to systems that are 30 or more years old. Much like putting a new engine in an old car, this can create a completely new set of problems and isn’t a guarantee that homeowners will save on their heating costs. The problem is that boilers themselves are more sophisticated and efficient than ever but the systems they are attached to have not changed much. Saving on heating costs has to go beyond just the boiler. Homeowners, contractors and distributors have to be educated as to how a variety of technologies working together will provide the best return on the investment in a new heating system. Retrofitted systems need to be made more efficient using technologies such as ECM motors on circulating pumps, variable speed circulators, outdoor reset technologies, piping insulation, the usage of buffer tanks to reduce boiler cycling and improving zone control technologies.
The pace of change in hydronics is creating a variety of new challenges for wholesalers. Contractors come to the counter requesting the latest boiler technology as the arms race among manufacturers intensifies. Wholesalers have to juggle relationships with their longterm suppliers with trying to provide their contractor base with the hydronic technologies they want to buy. This in turn may create a proliferation in boiler lines being carried, which of course leads to a huge investment in inventory and potentially poor inventory turns.
Of course, this is in addition to the challenges of educating and training sales and counter people so they can provide the proper levels of support on all these new technologies. And finally, what happens when homeowners complain that the high efficiency heating system that they just spent multiple thousands of dollars on, doesn’t actually reduce their heating costs significantly, requires more maintenance than the old system and has an expected life half as long as the system it replaced.
As a manufacturing partner, we share many of these challenges with our customers. We focus on designing new products that will be in demand and offer fantastic value. We continue to try to cut through the clutter on training, and separate fact from fiction on product performance. We even deal with our share of homeowners. The evolving hydronics industry can be complicated and challenging, yet strongly symbiotic in the need for all stakeholders to work together for mutual success.
Burnham Holdings’ portfolio of boiler companies represents the best of what the industry embodies. We strive continually to develop safe, rich, commercially viable products that are in demand by homeowners, contractors and wholesalers. Our boiler products span all segments of the hydronics industry, from high value products meeting homeowners basic heating needs to highly sophisticated, high efficiency boilers that embrace the latest control and heat exchanger technologies. Burnham Holdings Inc. is the parent company of the following residential brands: Burnham by U.S. Boiler Co., New Yorker Boiler, Crown Boiler, Governale, Thermo Pride – and for commercial products – Burnham Commercial, Thermal Solutions and Bryan Boilers.
Moving beyond product, we continue to focus on having strong relationships with our wholesalers, and to provide them and their customers with the support and materials required to help be successful with our products in the marketplace.
Mike Lahti, vice president, Sales & Marketing Lochinvar
The hydronic industry is evolving rapidly due to the introduction of progressive hydronic heat sources and control strategies. This is evident with the recent product introductions that feature new content and thinking. At Lochinvar, we believe control technologies and electronics will continue to be the new frontier. Homeowners and building operators are expecting us to deliver energy efficient designs with control versatility that perform reliably in modern hybrid multi-temperature hydronic systems. It’s vital that manufacturers continue to enhance boiler performance with new control features, innovative functionality, system integration and efficiency. Innovation will come from use of advanced controls and system interfaces that intuitively respond to changes in heating load. Recent milestones have been attained with new performance standards in load matching burner modulation capabilities and touch screen interfaces. Manufacturers will continue to boost consumer excitement with electronics that will enable energy savings that can deliver a tangible return on investment.
One challenge we see has to do with keeping up with the rate of technological changes. It’s vital that distributors’ staff become brand loyalists that command a presence and become known as the “go-to source” for product and hydronic system expertise. Moving away from a “general” knowledge of a wide array of products into brand specialists will provide a significant competitive advantage. Balancing time for product training and other responsibilities of their job will always be a challenge.
We see the answer in training and education. We believe distributors must create value and differentiate themselves with intangibles such as product information and troubleshooting skills for the brand they promote. Becoming brand specialists by offering their customer base superior service, product knowledge and system know-how will allow them to more effectively outperform their competition and provide a competitive advantage.
To meet this challenge, distributors and manufacturers must partner in a manner in which they have not in the past. A key future determinant for the successful wholesale distributor will be the company that makes education and training a priority – not in a general sense, but with a committed and prioritized focus. Manufacturers are refining their approach to product training by offering web-based videos, webinars, onsite training, mobile product showcases and their own product universities.
Two of the most important assets to a distributor are the level of value-added service they provide and employing high quality, knowledgeable staff. The future success of their business is largely determined by these elements. The ability to differentiate their services with knowledgeable staff, training and education as well as continuous improvement will always be a challenge for any business. Customers will always seek out those distributors that can provide the best service, value, knowledge and expertise.
The Department of Energy and the Environmental Protection Agency have become more active in recent years as they look at alternate energy sources and seek improvements in efficiency and reductions in emissions from fossil fuel-burning appliances.
The EPA is considering changes, effective in 2014, to the minimum AFUE level for Energy Star-rated boilers. The Energy Star minimum is currently 85 percent AFUE and has not changed since the program’s inception. EPA is proposing to raise the level to 90 percent AFUE for gas boilers and 87 percent AFUE for oil boilers. This is a significant change and will effectively set the Energy Star minimum level as a condensing boiler.
This is important because it will not only increase the demand for condensing boilers but will increase the demand for knowledge of condensing boiler installation, application and operation. Wholesalers that are informed and knowledgeable about these products and their installation requirements will be poised and prepared for the future.
What’s more, industry sources have indicated that, in the next few years, a significant number of our current HVAC technicians will soon be moving into retirement. This may place a burden on the industry. This work force shift provides the proactive distributor, who chooses to perform differently from its competitor, with the opportunity to become known as the “go-to source” in their market by offering superior product knowledge and expertise for a whole new generation of HVAC technicians that will be coming into the industry.
Jan Andersson, general manager, MrPEX Systems, a Division of Safelink Systems, Inc.
My passion is floor heating, so of course I have to make a comment about that first. Floor heating is by no means a new technology, but it seems that it is getting more and more popular, much due to the new technologies and the emphasis on using more efficient heat sources. I look forward to more and more homeowners and building owners being able to utilize floor heating and cooling as a mainstream option. For hydronics, there are many areas where new technology will help in the future. For the more complex systems, I believe [we have] the opportunity to add more intelligent system controls to increase efficiency and comfort by coordinating HVAC, IAQ and Hydronic equipment to better target the occupants’ needs. This excites me the most. It opens many doors for renewable and green sources and makes it easier to incorporate radiant cooling. From an occupant standpoint, the goal of these new controls is to make the comfort system invisible or at least eliminate the need to have to manage multiple systems to stay comfortable. on top of that, they are connected to the web and allow remote access, as well as the monitoring of energy. Simply, a happier customer!
On the opposite end of this spectrum, new technology allows for better operating simple systems as well. This is mainly due to new generation modcon boilers and variable speed pump technology, keeping the systems simple while making them more efficient.
Hydronic systems can be quite a bit more complex and expensive when compared with standard HVAC systems. So, the biggest challenge as I see it is finding and keeping knowledgeable people. It is important to train and inform the contractor base about hydronics, and the features and benefits of the new technologies. only then can the contractor give the consumer enough information to make an educated decision of which system to buy. Also, the seemingly disappearing “heating department” at the wholesalers leaves a lot of contractors guessing and “winging it” too much and they may not even try hydronics because of it. The result can be varied and at its worst leaves the owner not satisfied and with a sour taste for hydronics. If you have a knowledgeable staff that can hold the contractor’s hand, they are more likely to try something new and be better at selling it.
Recent years have added challenges due to the economic downturn creating a greater need for maintaining positive margins. This has driven some wholesalers to look at reducing this heating department and looking at less costly product alternatives, adding an element of uncertainty and risk with regards to the level of competence and quality of the products offered.
Hydronics is here to stay, but do your homework when selecting products and partners. With hydronics still making up only around 10 percent of the heating market, there certainly are a lot of opportunities to grow this part of your business. But to do that, you need to make sure that you have the right products in stock, and the staff to adequately support and sell them.
John Hazen White, Jr. president and CEO, TACO Inc.
Quite clearly, there’s a huge move toward energy-efficient products or those that – when combined with other technologies – greatly enhance the performance of the systems they’re designed to interact with. All products and technology (HVAC and others) are being driven this way by customer demand and, more and more frequently, by government regulation as well.
We at TACO have found that energy efficiency on a product basis is much less beneficial than energy efficiency from a systems standpoint. Think of it: Smart building design comes together with products intended to work within that sort of context, when products and systems are integrated – that’s the sweet spot. Just a few years ago, hydronics and HVAC were seen as separate, often one to the exclusion of the other. Today, we see them – through conscious design – coming together to improve control, efficiency and comfort.
As an example, we developed Load- Match as a system consisting of products that, when installed together and as a system, are now one of the most energyefficient building system platforms available today. LoadMatch is an advanced hydronic heating and cooling system that delivers better comfort, lowers first costs, maintenance and energy costs. Building designers can expect reduced design, startup and commissioning time as well.
A LoadMatch system is the marriage of two old ideas wrapped around a new technology. The old ideas are single pipe distribution and primary-secondary pumping. The new technology consists of the use of maintenance-free wet rotor circulators.
Also, our new iWorx controls platform is now creating a wide wake. And our LOFlo injection mixing system is designed to dramatically increase the energy efficiency of chilled beam systems. And yet it’s rather simple in design – consisting of a mixing block, variable speed injection circulator and constantspeed zone circulator – and for that reason is easy for wholesalers to stock.
We’ve worked on many building projects that incorporate all of these. In fact, our new training center illustrates this nicely. We designed and built it to integrate systems, achieving LEED Gold status. It’s also a living, breathing, building systems laboratory – routinely feeding us information about equipment/ system operation and control.
Our relationship with wholesalers is incredibly important. Wholesalers will need to continue to provide important value-added services to the manufacturer’s distribution process, such as product training, and also to provide access to the latest products – especially at a time when new technology is being developed at a brisk pace, and as overall systems approaches become ever more important.
This has been happening over time; successful wholesalers are able to understand products and features and application as well as being able to carry inventory and products, so that manufacturers are able to supply customers in what is generally a very seasonal business. Wholesaler comfort and familiarity with product features and applications are also becoming more important, especially now as we begin to emerge from these tough economic times. Just as that’s happening, some of the most energy-efficient home and building designs are now beginning to take shape.
It’s becoming increasingly important to manufacturers that wholesalers become as closely aligned with us as possible. Something that’s very important to Taco: We’re looking for loyal partnerships with wholesalers who participate in and take advantage of our entire product and systems sales programs as opposed to those who’re purchasing products and technology in a bits n’ pieces fashion. Knowing this, we’ve developed some very enticing programs to encourage this “wholistic” approach (borrowing a health care term) to sourcing and selling products. It’s a better way of doing business, and it’s entirely win-win.
Bill Gray, president, Uponor North America
It is an interesting time to be involved in the hydronics business. Developments in heating and cooling source technologies, including high-efficiency/low-mass/condensing boilers, air and geo-exchange heat pumps and solar – to name a few – are all begging to be adopted by the industry.
The winning technologies will be those that effectively integrate multiple systems (air, radiant, radiators) in ways that are seamless and invisible to the owner. Increasingly, owners want remote access, programmability and operating data, but they are not overly interested in how the A/C works with the heating and humidification. They want (1) performance and simplicity in their interaction with the system; and (2) efficiency in the control and operation.
The challenge for hydronic distribution system manufacturers is to figure out how to incorporate these new developments into our offerings and to lead the industry into adopting them. We have traditionally been at the forefront in promoting new technologies and, in many ways, we will answer today’s challenge as we have in the past; namely, through training, support and partnership. What is different and exciting about today’s training and support is the multitude of ways they can be delivered and experienced.
Successful hydronics products in the future will be more like modular appliances, seamlessly integrating not only a heating and cooling source with distribution and control but also air handling and air quality in “indoor-climate boxes” for easy on-site installation.
The overarching challenge for wholesalers who embrace the hydronics challenge remains access to qualified people. Hydronics is under as much, or even more, demographic pressure as other trades, with experts in the field retiring or otherwise exiting and relatively few entrants stepping in to take the reins. Hydronics, by nature, requires unique training and experience that are not as conventional or abundant as they are for other trades.
My experience amongst wholesalers has been that expertise in hydronics is becoming increasingly scarce. Moreover, it is even more difficult for distributors to leverage the skills and experience of the few remaining valuable experts in the industry.
Next to the human resources challenge is the notion that the hydronics industry has generally not been very good at positioning its offerings in the best possible way for the majority of consumers. We have been inconsistent in our messaging and often overreaching in our claims. There is still a prevailing notion among consumers that basements will always be cold and that radiant heating is a luxury. We mistakenly think that homeowners want to know about the intricacies and technicalities of the systems, when what they really want is simply comfort.
When, as an industry, we can embrace and promote the notion that the best climate system is the one that embraces true human thermal comfort and indoor air quality, I believe we will start to make inroads and move the needle for hydronics.
As manufacturers, it is impossible to overstate how much we count on our wholesalers to be our most valuable conduit to the market. We rely on their relationships, as well as their financial and logistics expertise. We are making our knowledge, skills and experience in the hydronics industry available to our distribution partners in an effort both to bolster their credibility with contractors and to increase the penetration of hydronics and radiant technologies in the market.
Wholesalers should also know that we remain committed to the belief that hydronics – specifically, radiant based hydronics – is the best method of achieving thermal comfort. Emerging solar, air and geo-exchange heat pump technologies, with their predilection for low-temperature heating and hightemperature cooling, make radiant the natural choice when sustainable solutions are desired.
As systems manufacturers, we are committed to marketing solutions that are easy to integrate and install, thereby offering a solid value proposition to our wholesaler and contractor partners.
The team at HVACR/Hydronics Distribution Business is at its usual point position for our annual thematic September issue. After adding hydronics to our title, it’s not surprising that we felt it was the perfect topic for our yearly executive roundup. And that’s exactly what we did.
For some, there’s an affinity for these “roundups” if the questions are open-ended and reasonable. I am particularly fond of some open-ended questions because they allow the readers to judge even better what the interviewee believes are the best elements in their company vis-à-vis the industry. I’ve mentioned it before, but they allow our executives the greatest range in how they choose to answer, a telling indicator of focus and direction, in my opinion.
In the interest of fairness, we imposed a modest word length and asked the same questions of each executive:
1. What is the status of new technologies that we can anticipate in the near future? What excites you about upcoming hydronics products?
2. What are the challenges that you see for wholesalers who sell hydronics?
3. What else would you like to share with our North American wholesaler audience that you think would be of interest to them?