Industry at a Crossroads: Step-up or Be Stepped On!

September 9th, 2016 | Posted by Dominick Guarino in Dominick Guarino | Home
Performance-based contracting guru Dominick Guarino, CEO, NCI

Dominick Guarino, CEO, National Comfort Institute, an organization dedicated to HVAC system performance

Twenty-two years ago NCI set out on a mission to help the HVAC industry move towards measured performance. At the time, we envisioned a future where most systems would perform at over 90% delivered efficiency.

We believed the industry would fix most of the HVAC systems in  homes and buildings once the issue was recognized. Well, here we are, two decades later, and more than 90% of systems nationwide are still under-performing.

Our industry is truly at a crossroads. We’ve had ample time to step up and deliver proven, measured performance, and now time is running out. What does this crossroads look like? On one hand, we must quickly begin to demonstrate significant energy efficiency progress to government agencies like DOE and EPA. We must do the same for state agencies including Public Utility and Energy Commissions.

And most importantly, we must demonstrate this to our customers. We must prove we are capable of providing measured performance in the HVAC systems we service and replace.

HVAC Industry at a Performance Crossroads

The HVAC Industry faces a performance crossroad: the decisions faced today will impact which path they find themselves on.

The Government is NOT our Friend

On the other hand, if we don’t move quickly in this direction, the government will interfere. We’d likely see regulation and government overreach into our industry, up and down the distribution channel, as we’ve never seen before. This includes equipment manufacturers, wholesale distributors, and service and installation contractors.

Among others, one of the biggest problems with deeper government involvement is they will likely get it wrong. They will typically proscribe a one-size-fits-all or a measure-based approach solution (which is already going on in numerous state-mandated utility incentive programs).

Performance Means Testing and Diagnosing Every HVAC System

This means instead of actually testing and diagnosing individual HVAC systems, and making precise corrections, there would be mandates to perform “improvements” and install certain products — whether needed or not.

The last time this happened, every “black box” and snake oil salesman came out of the woodwork, pitching inexperienced legislators and program managers on silver-bullet products promising to fix all. The problem with these “fixes” is they often aren’t proven to be ineffective until the damage is done. In many cases, not only do these products NOT improve energy efficiency or comfort, they often make things worse, wasting even more energy and reducing equipment reliability.

The best way the industry can avoid government interference is for serious HVAC professionals to prove we can do this ourselves.

It Takes A Village

How do we get there? It’s up to our ENTIRE industry, not just the contractors, to step things up. We all must learn what it really takes to deliver true performance. This means everyone in the chain needs to quickly learn how to be part of the solution.

If you’re a manufacturer or wholesaler, it means looking beyond the condensing units, air handlers, furnaces, and package units that leave your factory or warehouse. It means focusing on gaining a strong understanding of measured field performance, and how it’s impacted by the entire HVAC system. This includes equipment, ducts, fittings, registers, and grilles.

Federal and state agencies are feeling pressure from their constituencies to get results. Either we start acting to clean this up, or it will be imposed on us

Manufacturers and distributors must step up and learn how this all works together, and then support their contractor/dealers with whatever means they can. This includes better training and support. It also means providing carrots, in terms of incentives for proving installed systems actually work as designed. It means also swinging sticks, such as raising the bar for purchasing their brands, and cutting off the bad actors.

Contractors of course need to step up and get serious about learning how to test and measure the performance of their installed systems, and the systems they service.

It’s Time to Step UP

Contractors of course need to step up and get serious about learning how to test and measure the performance of their installed systems, and those they service. Good training is key. I’m not  just talking about basic training on installing and servicing a box. I’m talking about truly understanding the whole system — how to test, diagnose, and provide solutions to their customers.

Those who have been following my Last Word column over the years have heard some of this before. The main difference is today the clock is running down. Federal and state agencies are feeling pressure from their constituencies to get results. Either we start acting to clean this up, or it will be imposed on us.

I guarantee we will not like this alternative. Ask any industry that has undergone stiff regulation how they like it. Compliance costs can be stifling. Fraud, waste, and abuse abound. The primary casualties are typically customers who end up paying a lot more for goods and services that still don’t perform correctly. Service companies see declining margins due to exorbitant compliance costs.

The choice is ours. If we can figure out how to unify our industry and prove we can do it ourselves, we may be able to fend off over-regulation. If we can’t get together on this, our industry could suffer yet another black eye, and the landscape will look very different over the next decade.

Dominick Guarino is CEO of National Comfort Institute (NCI) one of the nation’s premier Performance-Based™ training, certification, and membership organization, focused on helping contractors grow and become more profitable. His e-mail is For more info on Performance-Based Contracting™ go to  or call NCI at 800/633-7058.

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