Overheard in Orlando

I’m writing this editorial in the brief week I have just after the AHR Expo in Orlando (which is our top story on the cover, and we’ve also done an “AHR Takeover” of our New Products section starting on pg. 40) and just before the Kitchen and Bath Industry Show in Las Vegas (we will have a comprehensive write-up of KBIS in our April issue).

To find the time to put this issue together I had to talk my way out of attending the Water and Wastewater Equipment Treatment and Transport (WWETT) Show that is going on in Indianapolis even as I type this sentence. Nevertheless, thanks to some excellent resources provided by the show organizers, we have a write-up of the show in this issue starting on pg. 3.

The big buzz at AHR was the coming refrigerant changeover. EPA regulations that go into effect this year set a 750 global warming potential (GWP) limit for air conditioning. This means that R-410A (with a GWP of 2,088) is out, and the new A2L refrigerants are in.

This is a bigger deal for manufacturers than contractors, and a bigger deal for HVAC/R contractors than for plumbing contractors, although heat pump water heaters do use refrigerants. Every manufacturer I talked to said they were on top of the changes, and that end users should see little-to-no changes in their day-to-day.

Among water heater manufacturers—especially those with tankless or condensing products—the big talk was about the new efficiency standards from the Department of Energy (which we have been reporting on since they were formalized back in 2023). The standards are set to go into effect in 2029, but manufacturers have been busy designing, engineering, re-tooling and re-imagining their production processes to meet the coming standard. And again, everyone I talked to said they were on top of the coming changes.

Except… what if those changes weren’t coming? The new administration is very strongly anti-regulation (especially any regulation dating from the Biden administration). This created what I can only call a palpable sense of uncertainty. What if, after all this investment, all the money and manhours, the new standards simply never showed up?

Most people I talked to—contractors and manufacturers alike—were guardedly optimistic about the coming year. And in fact, it looks like it would just require a small drop in interest rates for this to be a very strong year. Yet uncertainty—around standards, regulations, tariffs, the supply chain and even taxes—was a common trend.

The response of the larger companies seems to be an “all of the above” strategy; a broad enough product offering to satisfy whatever their customers might demand, while still being able to satisfy whatever state or federal regulations they might need to meet.

The response of the small companies seems to be to wait and get bought up by a bigger company! There has been a wave of consolidation among manufacturers that, again, seems to be about having as broad a product offering as needed to face whatever the future may bring.

Just today comes news from the Department of Energy that indeed, the new appliance standards (which were required by Congress, but are referred to in the press release as “Biden-Harris administration mandates”) are being postponed. This includes gas-fired instantaneous water heaters. In addition, gas-fired tankless water heaters are going to receive a new energy efficiency category (which makes sense).

We’ll have to see how all this shakes out. CONTRACTOR will continue to report on the evolving situation—and hopefully help our readers manage whatever uncertainty they may have.