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HVAC or Electrical; Increasing importance of the allround installer

A lot of legislation has been created towards a low carbon economy.

A lot of legislation has been created towards a low carbon economy. In the EU energy 2050 roadmap, a huge cut in carbon emissions is a centrepiece of this plan.

Electricity will play a central role in the low carbon economy. Partially replacing fossil fuels for heating will be a necessity, because heating & cooling is responsible for a big share of the carbon emissions.

In order to facilitate this transition, many HVAC manufactures are now diversifying their product portfolio or investing more in their existing Electrical heating solutions. One only has to look at the products on display at the ISH earlier this year to see this trend. Companies like Viessmann presented decentralized electrical heating solutions, with a combination of heat pumps, PV and storage capacity.

This trend will also affect the installers. Traditionally, the HVAC business was the realm of the HVAC installer and the Electrical installation the realm of the Electrical installers.

Throughout the last years though, we have seen a trend (in some countries) towards all-round installation companies. These companies perform both HVAC and Electrical installation jobs. These could be HVAC installation companies who also started doing Electrical jobs or vice versa. Instead of the 2 traditional target groups (HVAC and Electrical) we now can identify 3.

  There are a number of drivers for this trend. First of all, there is a trend towards a lean construction processes where fewer parties are involved in a project. Stakeholders prefer working with total solution providers, in this case working with one installation company for all installation jobs (both HVAC and Electrical). Furthermore, building installations are becoming more complex and ‘smarter’, which increases the complexity and requires a higher knowledge level from the installers not only for their part of the installation, but of the total installation (HVAC and Electrical). Finally, the push towards all electric is an important driver as well.

  For manufacturers of HVAC products and manufacturers of Electrical products, this will be an important trend to monitor. It creates opportunities, but only if this ‘new’ target group is understood well.

As a first step, USP Marketing Consultancy is tracking the share of HVAC installers who also conduct electrical installation jobs and the share of Electrical installers who also do HVAC jobs. We are able to do so via our multi-client studies targeting the HVAC installers (4,800 telephone interviews with installers each year in 6 countries) and the Electrical installers (also 4,800 telephone interviews with installers each year in 7 countries).

At this moment we have data about this development among the HVAC installation companies. We started to monitor this among the Electrical installation companies as well. We expect to be able to report about this trend amongst Electrical installers near the end of this year.

In the picture above, the share and trend of HVAC installers also doing electrical jobs is portrait. Again, there are significant differences per country. In Germany, only 13% of the HVAC installers also conduct electrical installation jobs. This has been stable over the last couple of years. One of the reasons is the protected and well defined profession of the HVAC installers (Meister specialization). In the Netherlands, almost half of all HVAC installers also do electrical jobs. Over a 2 year time period this has grown from 36% to 44%. In France, the highest growth of HVAC installers doing electrical jobs can be seen. Over a 2 year time period the share of HVAC installers also doing electrical jobs has risen from 9% Q4 2014 to 23% in Q4 2016.

So why is this important for both manufactures of HVAC products and manufactures of Electrical products? First of all, this means that the traditional target group (HVAC or Electrical) is changing and more overlap can be seen. The focus and market intelligence should now include (to some degree) the hybrid group as well. Furthermore, this can be valuable information for product development and the overall product portfolio. Finally, this trend will have consequences in terms of distribution of the products. If a company was traditionally doing HVAC jobs only, but are now also doing Electrical jobs, where will they buy their Electrical products? At Rexel or at Cedeo?

We will continue to measure this trend and more (i.e in-depth analysis of the view of installers towards Electrification: hurdles, opportunities and needs).

  For more information feel free to contact me @ hoogenboom@usp-mc