The connected home subset of the Internet of Things (IoT) is poised for explosive growth. This is a natural fit for HVAC contractors.


What is the Connected Home?
The connected home is an eco-system of devices, services, and apps in a residential building that are networked together to enhance the homeowner experience.  This includes devices as simple as a sensor that notifies the homeowner when it’s opened.  For example, a homeowner might have one of these sensors attached to a gun safe or a liquor cabinet.

Devices can also be more sophisticated such as high definition cameras that respond to certain types of movement in certain zones, video doorbells, thermostats, flood alarms, and so on.  Devices can respond based on a variety of conditions, including the proximity of occupants based on their mobile phones (i.e., geofencing).

Why HVAC Trumps Everyone Else
Today, connected home products are either DIY or installed by cable and home security companies. DIY is not a popular option for the vast majority of consumers, who struggle to get their Outlook calendars to sync with their Android phones and who need different remotes for their TV, cable box, and Blue Ray players.  People do not want multiple hubs and apps for an array of products that do not work together.  They want someone to make everything work for them.

Cable and security companies can integrate parts of the connected home, but they cannot offer end-to end solutions. They are not qualified to touch the HVAC. In fact, they are afraid of it.

For HVAC, it’s more than the ubiquity of the service and installation work contractors can offer, it’s the existing relationships.  The current connected home turnkey offerings sold by cable and security companies involve heavy marketing and door-to-door canvasing to people who lack a relationship with them.  Contractors can market and sell to people where there is an existing relationship and degree of trust.  If a security company can successfully offer connected home solutions by sending pure salespeople door-to-door, how much more successful can a contractor be, offering options through technicians, already at the home solving problems.

What’s In It For Contractors?

Connected home solutions offer significant revenue opportunities through cloud (WiFi) or cellular data services.  The connected home doesn’t work without the ability to store video and connect with mobile phones, tablets, and/or computers.  Without the cloud or cellular connectivity, a homeowner may be able to see who is at the door from a phone while at home, but not while away, which is uninteresting to most people.  The data service necessitates a monthly charge.

Because they bundle financing for installed equipment with the data services, cable and security companies charge as much as $70 per month. Contractors can give people the option to finance installed connected home equipment or pay for it outright, while separating the data service. The cost of the data service under this approach can range from $20 to $30 per month or be combined with an HVAC service agreement for more.

1000 connected home service agreements X  $20 gross profit per month per agreement X 12 months = $240,000 gross profit

That is $240,000 free and clear of the maintenance portion of a service agreement for every thousand agreements put in place.  While there is some additional overhead that will be needed, almost all of this will fall to the bottom line.  Moreover, this will add around $1 million to the value of the business!  Add a thousand connected home customers and add a million dollars to the exit strategy.

Selling a thousand connected home data plans is far easier than selling maintenance agreements.  Maintenance agreements are like trips to the dentist.  You go because you need to and you know it will eventually get painful if you skip it.  Yet, contractors successfully sell them. The connected home agreements are easier sales because people want them.

A home’s connected home network is not static.  It can grow every year, giving contractors an ability to go back to the well again and again, offering other devices and expanded data services.

When bundled with equipment as an option, the connected home offering can make a contractor stand out from the competition, giving his company an edge in desirability.  As a standalone offering, connected home products carry demand independent of the weather, giving contractors another off-season sales opportunity.

Hurdles Contractors Face
Before contractors can offer connected home solutions, they must overcome a number of hurdles.  First, they need to choose the products they will offer.  This is the very thing that’s stymied so many consumers.  It is the job of the contractor to select products that will make up the eco-system he will offer, to ensure everything communicates, to know what will not work with it, and to communicate this with consumers.  This will take research and experimentation.

Contractors need a partner who can provide cloud based data services and/or cellular services, which can then be resold.  This is another research effort and an important one because the recurring monthly revenue is the real prize.

Contractors should decide if they want to engage in home security, or not.  Offering security services requires licensing and other hurdles, which vary state-by-state.  The contractor can partner with a security company, but the security company with want the recurring monthly revenue.  Alternatively, the contractor can take a home awareness approach, where there is no third party monitoring.  Alerts are sent to the homeowner’s phone or other devices and the homeowner decides how to respond.  The latter approach can save consumers considerable money.  If sirens and cameras are in place, consumers may feel comfortable skipping third party monitoring (and fines from the police department for false alarms).

Finally, contractors must decide how to package and market their offering.  Do they want to charge normal margins for installed connected home products or cut the margins for greater adoption and more recurring monthly revenue streams?

If these and other hurdles can be cleared, a connected home offering can transform a contracting business into a highly profitable, highly saleable, money machine.



Contractors, homeowners are finding whole-home comfort in ductless technologies


Ductless technology continues to be one of the fastest-growing HVAC market segments, racking up double-digit sales increases in the U.S. every year for the last several years.

In fact, the global ductless HVAC market is projected to reach $78.62 billion by 2021 at a compound annual growth rate (CAGR) of 8.18 percent from 2016 to 2021, according to a report from Research and Markets. Per the report, increasing demand from the residential buildings application is the major driver for the market segment.

“Historically, ductless was a very niche market; however, there is not a market in North America today that is not using ductless in some way, shape, or form,” said Tai McKinney, ductless portfolio leader, Trane, an Ingersoll Rand brand.

According to McKinney, ductless comprises about 10 percent market share of the total industry, and the numbers vary state by state.

“Ductless is being applied to new construction in single- and multi-family applications,” he said. “High altitude, cold environment, or hot desert regions — traditional central air conditioning environments — are now seeing additional opportunities for ductless products. Contractors are seeing these solutions as part of their everyday product offerings.”



One emerging trend impacting the residential ductless market is greater consumer awareness for mini splits, according to Ryan Cross, product manager, mini splits, Lennox.

“Mini-spilt systems offer a unique heating/cooling solution when accessing or installing ductwork is not a feasible option,” he said. “Consumer acceptance of mini splits has significantly increased over the last few years as consumers realize the benefits they offer. Additionally, there is an increase in mini-split applications for multiple spaces throughout a home. Historically, mini splits would be installed to heat and cool a single room or space, such as a furnished basement or room additions. Today, there are more multi-zone applications for ductless systems, such as multiple rooms or spaces and even whole-home solutions, where mini splits can be the main source of heating/cooling for the home. This trend is expected to continue as the mini-split market continues to expand.

“Another factor driving growth in the market is more consumers are making purchasing decisions based on how environmentally friendly products and companies are,” Cross continued. “Mini-split heat pumps align nicely with these trends. They are extremely efficient and use electricity versus combustion-type fossil fuels. All of these factors, coupled with the flexibility and ease of installation, have driven the growth of mini splits in North America.”

Bosch Thermotechnology Corp. is seeing a trend toward multi-zone systems, especially 4-ton units, which can be used as whole-house heating and cooling solutions, according to Shilai Xie, manager, product management group, Bosch Thermotechnology Corp.

“Because of climate change, hot summers start earlier and last longer, so geographic areas where air conditioning was not mandatory traditionally are now becoming a core market for first-time installations. Multi-split units are the perfect solution for first-time installations as well as retrofits where installing ductwork would be difficult, because multi splits require no ductwork,” Xie said. “‘Window-shakers used to be popular air conditioning options, but they’re loud, uncomfortable, and inefficient. People started to move from window units to single-zone systems, but now, more residential applications use ductless units as whole-house solutions with the percentage of multi-split usage increasing across the ductless market. A multi-split system gives users the option to have one outdoor condensing unit with multiple indoor units, which allows consumers to control temperatures in multiple zones of their homes.”

Xie noted that ductless products are increasingly being used as primary heat sources in cold climates with these purchases motivated by utility rebate programs.

“New ductless technologies can deliver high heating capacities, even in low ambient temperatures,” he said. “The improvement of product features, like low-temperature heating, are driving market growth because now the system is more robust and applicable to heating and cooling. Additionally, more contractors are familiarizing themselves with ductless residential systems, so there’s a much larger base of contractors who have experience properly installing this technology. The internet is also a key driver of market growth and awareness because it gives homeowners the opportunity to educate themselves on the technology. There are also more choices available as more competitors are joining the market, which drives down the unit price and makes systems more affordable.”



Contractors are increasingly leading homeowners toward whole-home solutions using ductless technology, noted Andy Armstrong, vice president of sales & marketing, Fujitsu General America Inc.

“This solution offers homeowners very high efficiency, better zoning, simpler controls, better energy utilization through the zoning advantages, and lack of duct loss,” he said. “With ductless HVAC being only 10 percent of the entire residential market, growth is still mostly tied to the learning curve of contractors and their willingness to adopt the technology.

“As more contractors get comfortable with ductless solutions, they are quickly applying these valuable homeowner benefits to their offerings,” Armstrong continued. “This trend is amplified by regional differences in adoption rates. Some markets are more saturated than others, but we’re seeing growth in markets that were previously very slow to adopt the technology. Also, colder markets that previously weren’t fit for mini splits are now able to use this technology as the sole source of heating with models that go down to minus 15°F.”

Chris Magee, ductless split system product manager, Friedrich Air Conditioning, agreed that ductless systems are enjoying increased marketplace acceptance.

“Friedrich is seeing more opportunities beyond the typical replacement business, including more whole-home multi-zone applications,” he said. “Ductless is taking the place of the more inefficient and expensive to replace central air conditioners.”

According to Magee, efficiency is the primary driver of ductless acceptance.

“Continual rebates from power companies and ease of installation are motivating factors for many of our customers,” he said. “A major advantage of ductless systems is flexibility. In areas with no ductwork, such as attics, basements, or commercial properties with zones where the central air conditioning system may not be able to reach effectively, ductless systems are great solutions. With the surge in popularity of tiny homes, retrofitted lofts, and row houses, where space is at a premium, ductless systems offer efficient cooling designed to match the needs of the space. Overall, ductless systems operate quietly, can cool rooms quickly, maintain an accurate temperature, and reduce energy costs.”



Trends in the residential ductless market skew largely toward energy efficiency and connectivity, according to Michelle Robb, director, residential marketing, Mitsubishi Electric US Inc. Cooling & Heating Division.

“We often see our ductless systems being specified for net-zero energy homes, tiny homes, and passive homes,” Robb said. “The high SEER levels, ability to handle smaller application loads, and minimal disruption during installation make these systems a perfect match for highly efficient houses. Our kumo cloud™ controller app is a functional solution for connectivity and gives users the ability to divide homes by zones, program cooling and heating events, monitor systems, and give each unit individual remote control.”

Robb also noted that many state-funded programs incentivize homeowners to switch to cleaner, more energy-efficient options through rebates.

“With green building trends continuing to grow, efficiency remains a huge factor for homeowners,” she said. “After learning that switching to a ductless system can save them 30-40 percent on their energy costs, the sell is easy.”



According to Bill Holder, U.S. western region senior manager for LG Air Conditioning Technologies, there is a huge focus in the ductless industry on design aesthetics, interoperability, and performance.

“Due to the traditional HVAC infrastructure of the U.S., some consumers have been reluctant to go duct-free because of the look of the indoor units,” he said. “With the availability of more stylish indoor units, like the LG Art Cool Gallery and Art Cool Mirror, that resistance is waning quickly. Similarly, in homes where the traditional infrastructure already exists, there are options to do a hybrid system with both ducted and duct-free options. This allows consumers to take advantage of the infrastructure they already have in place while capitalizing on the energy efficiency and superior indoor comfort benefits of inverter technology.

“In terms of interoperability, consumers want the ability to control their entire homes from their mobile devices, and this includes their air conditioning,” Holder continued. “For this reason, all of our Wi-Fi-enabled indoor units may be controlled via the LG SmartThinQ app. For homeowners who already have other LG Wi-Fi-enabled appliances in their homes, it’s easy to control their entire environments from a single point. Additionally, consumers want systems that will not only work, but be incredibly efficient doing it. Our LG RED line of products delivers 100 percent heating capacity at 5°F and continuous operation down to minus 13°F.”

While conventional systems still have the lion’s share of the residential air conditioning market, the tide is changing with more and more installations incorporating duct-free or hybrid solutions, Holder noted.



While ductless continues to gain acceptance across the country, the technology still faces several hurdles in the industry.

“One of the greatest barriers for residential ductless is adoption,” Xie explained. “While contractors are expanding their knowledge of the residential ductless market and homeowners are becoming more aware, the technology is still not widely used. Mini-split systems are still considered an emerging technology. When people think of air conditioners, the first thought that comes to mind is forced air, but over time, awareness of and appreciation for the technology will continue to grow among manufacturers, contractors, developers, and homeowners.”

According to McKinney, the challenge is applying the right technology to the correct applications.

“If ductless technology is applied incorrectly, both the contractor and the homeowner find the product frustrating because it’s not performing the way it should and that’s because it’s not applied correctly,” he said. “That, of course, comes back to training and education.”

Magee agreed, saying the main challenge is “finding contractors who have become well-versed in installation best practices.”

“Education continues to be a major industry challenge — from proper installation of equipment to limited focus in vocational schools on duct-free technology in their curriculum,” Holder added. “That’s why we are focusing on supporting education and training opportunities for our contractors, from participation in advocate organizations, such as ACCA and MCAA [Mechanical Contractors Association of America], to investing in our own training academies and 27 partner facilities.”

Armstrong also noted finding good, quality technicians is a challenge.

“The most pressing challenge has not changed and is consistent across other technologies as well,” he said. “And that is finding good, quality technicians and getting them the needed training to ensure quality, trouble-free installations and service. Additionally, consumers often prefer not to have an indoor wall mount in their homes, but the introduction of cassettes, slim ducts, and floor mounts has helped to dispel those concerns.

“The other issue that comes up most often is how we, as a channel, will manage new refrigerants and all the changes that will ripple-out from those decisions,” he added.

Robb also cited refrigerant standards as a potential impact on the industry.

“Due to the recently announced phaseout of hydrofluorocarbons [HFCs], the HVAC market will see changes in the next five to 10 years, but we also see opportunity in continuing to create highly efficient HVAC systems for homes and buildings,” she said. “On the contractor side, challenges include a shortage of skilled labor, responding to changing codes and regulations, and adjusting to a market that is becoming increasingly efficiency-focused. For example, the challenge that contractors specializing in traditional HVAC equipment will face is a push into more efficient equipment and a need to learn about new technologies.”



In spite of the challenges, the future remains promising for ductless technology.

“The growth potential for ductless technology over the next five years and beyond continues to be strong in the U.S. market with no slowing down in sight,” Robb said. “We anticipate the demand for energy-efficient and easy-to-operate HVAC systems along with a growing expectation for connectivity to continue its upward trajectory.”

Holder agreed, saying demand for ductless systems will continue to grow.

“We’ll continue to see a greater emphasis on interoperability, design, and performance,” he said. “Duct-free is a growing trend in the U.S. and contractors who currently don’t offer these solutions should really consider doing so to grow their businesses.”

Armstrong also predicts the continued growth of the ductless segment in the overall market.

“Expansion of ductless in the residential new construction market is already growing and will continue to be a larger factor,” he said. “Contractors are finding more and more reasons to offer homeowners whole-home solutions, which will also continue to grow. Finally, slow-to-develop markets will catch up and see significantly more ductless as we move forward. There is a tremendous opportunity for contractors to be on the leading edge of ductless as a whole-home solution. Continually, research on the product life cycle teaches us that early adopters stand to earn the most profits. Now is the time to join the ductless revolution.”


Publication date: 8/7/2017


What a triangle and air conditioning have in common?

That’s what Samsung has done on their current residential and single-zone light commercial wall-mounted indoor units.


Samsung HVAC has combine the triangle shape and achieve a great design. This “out-of-the box” (get it) thinking allows for increased efficiency and capacity. Here are the achievements, based on Samsung promo:


  • Bigger return and supply openings, an increase of 139% and 154% respectively; thanks to wider openings.
  • Increase in airflow of to 122% by been able to fit a bigger, more efficient fan turbine.
  • Further throw on angled blade positions, do to a different angle in the position of the supply outlet.
  • More vertical directional blades, again due to wider opening.
  • Faster cooling, since it has more cabinet space and bigger turbine, more air changes per hour.


This design is the staple of the Pearl, Whisper and Wind-Free families of product.

Video was produced by Samsung HVAC.