Category: Thoughts on

The Truth About R-454B

In Thoughts on By Jay Torres On

As of January 1st of this year, all new HVAC equipment 5 Tons and smaller must use a refrigerant with a GWP (Global Warming Potential) lower than 700. Almost all the other manufacturers are using R–32. Why are we using R454B?

First let’s ask why almost every other manufacturer is using R–32. The reason why is because they are already using it in other markets. And it makes sense! You already have equipment using this refrigerant, just bring those over to the US market.

So why did we go with R–454B? First let’s take a look at the GWP of other refrigerants, including R–32. R–32 has a GWP of 675 and R–454B has a GWP of 466. The reason we went with R–454B is that we expect the EPA to further lower the GWP limit to 500 in the next 5–10 years. If and when this happens, we will not have to make another change to our equipment to comply.

While it does mean our installers will have to deal with two or more types of refrigerants, it also means they will not have to deal with another refrigerant change, model number change, or familiarize themselves with new model numbers in the foreseeable future.

Thoughts on acquisitions

In Thoughts on By Jay Torres On

Over the last few months, I’ve seen some acquisition news in the HVAC industry and I have some thoughts.

Acquisitions are not new. When a business or start up launches, the goal is either sustaining their business long term, going public, or getting acquired.

In the HVAC industry, acquisitions happen but they usually don’t make the news. Tech companies such as Microsoft and Facebook, now Meta, have acquired a few companies over the years and they always make the news due to their size. See Mojang, LinkedIn, Instagram, and WhatsApp.

But large HVAC acquisitions do make the news in our little corner of the world. I remember hearing the news when Daikin acquired McQuay in the mid–2000s. Maybe because we’re all increasingly connected on the Internet, more and more acquisitions are making the news. Daikin acquiring McQuay, Goodman, Alliance Air, and many smaller firms hits my LinkedIn feed. DMG acquiring Toro Aire for their distribution network. And now Ambient, a company I’d never heard of, bought a controlling stake in DMG, DMG North, and Toro Aire.

All these acquisitions got me thinking: is further consolidation in the HVAC industry a good thing or a bad thing?

I would say yes and no.

My argument for acquisitions is that it lets the acquired company use the resources of the acquiring company. They can use it expand or build new facilities. We saw this with Alliance Air breaking ground on a new manufacturing facility just over a year after being acquired by Daikin. Companies also acquire other companies to expand their market reach. Back in 90s USACD, known as SCAD back then, acquired EB Ward to expand their operations into Northern CA. Ambient, which is an unknown in the West Coast, acquired DMG to get into the West Coast HVAC market.

My argument against acquisitions is that it reduces the number of players in a given market. Less choice means less competition and generally means higher prices for customers. Before we ended up with 3 national cellular carriers (AT&T, Verizon, and T-Mobile) we had numerous national and regional carriers, including Cingular, Sprint, GTE, and others.

It also can lead to stagnation. Using the same cellular example, the only differentiation would be coverage and a few differentiating features. Can you name one feature from a carrier that distinguishes it from the other?

I concede that the HVAC market is not the same as the US cellular market, but it is hard not to envision a future where only a few large companies make the same basic product with only a few differences.