As the HVAC industry gears up to descend upon Orlando for one of its biggest events, AHR has released its highly-anticipated 2025 Trend Report, which gives a glance into what challenges and opportunities some of the biggest associations foresee for the year ahead.
From the ongoing refrigeration transition, and all the challenges that will come along with it, to workforce development and keeping pace with regulatory compliance, this year’s report takes a deep dive into the changes and offers some insight into how the industry can remain resilient through the use of emerging technologies and opportunities to undergo training.
Below are excerpts from a few selection organizations.
AHRI
“Our industry around the world is strong and innovative,” said Steve Yurek, president and CEO. “Our member companies manufacture quality, reliable products and equipment that are essential to the health, wellbeing, and productivity of customers around the world.”
The industry devotes a tremendous amount of time, effort, and resources keeping abreast of changes across the globe, and the coming year will be no different. Here’s what AHRI foresees coming down the pike:
• The transition from HFC refrigerants to their successors that began in 2011 is nearing completion, and the industry is now working with regulators and NGOs to explore the feasibility and safety of moving to even lower-GWP refrigerants for some applications in the future. The HVAC industry is also heavily involved in decarbonization efforts, both in the United States and around the world, and is always focused on economic viability as well as technological feasibility. Other issues on AHRI’s radar include increasing state efforts to regulate PFAS chemicals and plastics and packaging, as well as to implement extended producer responsibility programs.
• Another hot topic is the implementation of the tax credits contained in the Inflation Reduction Act - we await final guidance from the Treasury Department on that (as of September 2024).
• The one major shift would likely be the discussion of A3 refrigerants in residential applications.
AHRI also will continue to stress in the media sphere that HVACR and water heating products are necessities, not luxuries, and that policies must take into account consumer access and affordability.
HARDI
For HARDI, 2024 looked a lot like 2023, with residential end-market demand remaining weak relative to recent years, and nonresidential end-markets continuing their strong performance.
“Residential demand in both ’23 and ’24 has been suppressed by a difficult mix of inflated prices and high interest rates, driving increases in service/repair demand and declines in replacement activity,” the report states. “Conversely, nonresidential market participants continue to benefit from the outsized performance of data centers and new investments in manufacturing facilities. Taken together, the HVACR addressable market has grown by more than 10% across 2023 and 2024.”
HARID is also keeping an eye on state-level regulations around environmental and energy standards evolve, as there’s an increasing need for distributors to stay ahead of diverse compliance requirements across the U.S. Staying informed and adaptive to these changes is crucial for long-term success.
“The transition to A2L products will stress HVACR businesses throughout the industry value chain, and new regulations intended to lessen the industry’s impact on the environment will continue to materialize on the state and local level,” the report states. “Our focus is on condensing the overwhelming flow of regulatory updates into straightforward, practical steps our members can take to ensure compliance and efficiency.”
Workforce development will also be at the forefront, and competitive companies must be prepared to offer robust training and a clear value proposition when it comes to culture, HARDI said.
“2025 should bring more opportunities for growth than 2024, however, the complexities around the A2L transition, various incentive programs and incentives qualifications, and the hard deadline for the expiration of expensive inventory at the end of the year will present plenty of challenges,” said Talbot Gee, CEO. “Distributors and contractors, in particular, who are unprepared or unaware of these complexities are likely to be exposed to their detriment, and at HARDI, we take very seriously our responsibility in not letting that happen to our members.”
PHCC
2025 will have its share of pressing issues, but PHCC also sees plenty of opportunity ahead, as demand for high-efficiency products being driven in part by federal and state government incentive programs has the potential to expand product offerings and services, modernize inventories, and provide an opportunity for contractors to get their technicians trained on new products and technologies.
The implementation of the HOMES and HEARS rebate programs, as well as the 179D tax incentives, still carry many unknowns, but PHCC plans to work diligently to keep the industry apprised of changes.
“As a national association, it requires a lot of bandwidth to keep track of each state’s program developments, and communicate those developments to our state chapters and members,” the report states. “Contractors are particularly concerned about how rebates will work and whether they will be fully compensated by the time work starts, how long they will have to wait to receive compensation, how long a homeowner will have to wait to have work performed, and whether the rebate will be sufficient to offset costs.”
PHCC anticipates decarbonization, the development of heat pumps, refrigerant and regulations updates, and workforce development, to be the top trends in the coming year.
“The HVACR industry is starting into a period of change that can offer significant opportunities for both consumers and contractors,” said Cindy Sheridan, CEO. “Energy efficiency will be key to the future with numerous federal and state programs emerging to help fund these transitions.”
NCI
As an industry, NCI is spreading the message that the days of “rules of thumb” and cheap testing instruments need to come to an end.
“We have to step up, and technicians need to get the right training and tools to do the job right,” the report states, adding that HVAC systems still perform at less than an average of 60% delivery of capacity to the conditioned space.
To right the ship, NCI wants to place a greater focus on testing and verification of newer systems, especially with inverter technology, and this can be accomplished through advanced training — not just through trade schools, but for all of the existing workforce.
“The HVAC industry is facing unique challenges with the transition to A2L refrigerants along with the focus on electrification and inverter technology,” said Dominick Guarino, president and CEO. “Much training is needed.”
NCI also is seeing a shrinking workforce, and not enough support for contractor training by manufacturers and distributors. The transition to zero GWP refrigerants, and everything that comes with that, will also be a challenge, but better testing software and instruments will help the industry.
ESCO Group
The ESCO Group said the industry is witnessing unprecedented change, fostered by technological innovations and the desire for environmental sustainability.
“There’s a strong shift towards innovative and energy-efficient solutions aimed at combating global warming and embracing alternative energy sources. Traditional heating methods using fossil fuels like oil and gas are being replaced by heat pumps and hybrid solutions,” the report states. “Simultaneously, the importance of air conditioning is growing globally. As a result of the technological explosion in our industry, the days of single-stage equipment — both fossil fuel systems and air conditioning — are coming to an end. Variable capacity fossil fuels and inverter-driven heat pumps have become the new kings and queens of the HVACR industry, leading the charge toward a more efficient and adaptive future.”
Low-GWP refrigerants are the big expected trend and, along with that, the next generation of leak detection systems.
As A2L equipment enters the market, training and certification must be at the forefront. Consumers are also increasingly expecting higher levels of professionalism from their technicians, especially as the price of goods rises and the need for skilled professionals grows
In its recent travels, the ESCO Group has gained insights into the latest advancements and educational needs of the workforce, noting that properly trained HVACR and plumbing professionals will have a unique opportunity to work on hybrid water heating solutions, such as heat pump water heaters, across residential, commercial, and industrial applications.
“In my opinion, residential air-to-water inverter heat pumps with ultra-low-GWP refrigerants will be the most significant innovation in our industry over the next decade,” said Clifton Beck, manager of digital media. “As the demand for precious metals like copper and aluminum continues to grow, it makes sense to transition to water and other heat transfer media distributed through low-cost tubing, such as PVC and recycled plastics. I also envision monoblock outdoor units becoming a new market model with simple leasing options due to their modular construction and ease of replacement.”
