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HYDRONICS LEFT BEHIND,
Can The Trend Be Reversed?

Lawrence Drake
Teal International Corporation
09/02/2011

Hydronics is on the endangered species list of space heating.  According to the US Government Census Bureau, hydronic heating systems (hot water and steam) had a 2% share of the new single-family housing market in 2010.  That is only one third of the market share held in 1973. The hydronic industry’s share in spec homes faired even worse, it is down 80% from 1973. There has been a steady decline in hydronic market share over the last forty years, with the exception of three years in the mid-1980’s when solar tax credits boosted the industry. 


On the other hand, 49% of new single-family homes had central air in 1973, yet by 2010 that figure had jumped to 88%.  The average house size grew from 1,500 square feet to 2,200 square feet.  Obviously, Americans liked their comfort and could afford it.

market share chart

Why did hydronics get left behind?
This, of course, begs the question, “why did hydronic heat get left behind?”  And an even more important question, “can this trend be reversed?”
The obvious and most often touted answer to why hydronics got left behind is, “the rise in popularity of central air conditioning.”  Well, that is until it is revealed that 74% of new homes had warm-air furnaces in 1973 and only 56% had them in 2010.  So who was the big winner?  Heat pumps.  The heat pump came out of obscurity to capture 38% of the market by 2010.  Why?  Because, it could offer both heating and cooling from the same unit cheaper than anything else.  Never mind that heat pumps blew tepid air around and caused chilly drafts in the winter, or that they were noisy and unsightly; they were cheap and easy to install.  Comfort became secondary to cost.


So what happened to the hydronics industry? 
It seemed to lie there and take it.  It continued to crank out the same old ancient cast iron boilers that had morphed out of the steam days when a boiler really did boil water.  Their market was primarily one of replacing old dinosaurs with new dinosaurs. They seemed hell bent on resisting change.  After all, there was a lot of money tied up in foundries and stamping machines.  It would be costly to reinvent and retrain the industry to keep up.


The Spark
Then, a spark of light began to emerge.  It wasn’t a new spark, but one that had been rekindled by the solar industry, propped up by the government.  That spark was radiant floor heating, and it began to gain some momentum in the mid-80’s after having laid dormant since a brief run of popularity after WWII.  The staid hydronics industry leaders staunchly resisted this hippy generation mutation of hydronic heating.  They spread charges that radiant heating systems would cause boilers to disintegrate in months. After all, it used cheap plastic pipe instead of good ol’ copper or black iron.  In their official meetings they scoffed at presentations made by radiant floor heating enthusiasts and shunned the new emerging radiant tubing and equipment manufacturers. Radiant floor heating did not fit with their high-mass, high temperature, cast iron boilers and they just wanted it to go away.  But, go away it did not.
As the 1980’s passed, it became obvious that radiant floor heating just might be the saving grace for the dying hydronics industry.  After the tubing wars were somewhat settled and radiant pipe manufacturers addressed the oxygen diffusion issue that seemed death to cast iron boilers, the boiler manufacturers began to warm up to the idea that this new trendy hydronic system just might improve boiler sales.  The radiant heating folks went from being the bastard stepchild to the golden boy.


Mechanical Wonders
What started out as a simple water heater-pump-embedded tubing system began to sprout all kinds of appendages.  The developing radiant heating industry became the playground for the mechanical artist who found a canvas for his expression in radiant heat.  Soon walls of pumps, mixing valves, zone controls and all sorts of control boxes with digital readouts and sensors strung here and there began to emerge.  High honors were given to the mechanical contractors with the most elaborate display of liquid pumping and controlling component arrays, spread out in artistic style over the wall of a mechanical room in someone’s mansion.


Of course, these mechanical wonders were out of reach for 95% of home buyers and only a few of those who could afford them would put up with such a complex display of mechanical wizardry in their mechanical rooms.  But that didn’t matter.  There was a rich niche market segment out there that wanted the latest and greatest when it came to technology and comfort.  The industry seemed oblivious to the fact that, even with this renewed interest in radiant heating, the overall hydronic market share was shrinking.


Invasion from Europe
And then came the invasion of low mass boilers from Europe.  Now, there was a real assault on US boiler manufacture sensibility.  Cast iron was the way they did things and here comes these European upstarts with new fangled technology that seemed an ideal match with radiant floor heating, not to mention coming close to claiming the golden goose of efficiency.  Not only that, but the mechanical contractors, particularly those high profile radiant guys, were in awe of this new, high tech approach to generating warm water for their highly complex, multi-temperature systems.  Faced with extinction, the US boiler manufactures had no alternative but to dig in and invest in their own version of complex, highly efficient, small footprint, technology to the max, boilers.  All the stops where pulled when it came to squeezing out that last 5 or 10% of heat from those nasty flue gases.


Upsell
All this complexity and “technology” demanded a price.  Professional radiant heating cheerleaders chanted to the mechanical contractor crowds, “You are wonderful, you are great, you are highly trained technicians, you deserve to earn as much as doctors and lawyers and highly paid executives.  Now get out there and upsell, upsell, upsell!”  And upsell they did, to doctors and lawyers and highly paid executives; they sold to the upper crust of society.  Meanwhile, average homeowners walked away by the tens of thousands with heads bowed low, disheartened by the fact that the comfort of radiant floor heating was beyond their reach.


Season of Change
Then, in 2007, all that changed.  It was the beginning of a sobering redefining of America and the world.  Our economy came crashing down and the housing bubble burst.  New home starts declined by 60% in three short years.  The hydronics industry not only fell to its lowest market share in fifty years, it dropped to its lowest annual sales in the memory of those currently working in the industry.  The hard hit industry shuttered and staggered with the impact.  Sure, there were still those pockets of wealthy that kept the niche going, but the vast majority of mechanical contractors were struggling to find a market for their highly complex, expensive, albeit comfortable heating systems.  The cheerleaders blamed poor sales technique for declining sales and shouted even louder, “If you would just learn how to sell the benefits, your problems would be over.”


For years there have been a few brave souls who have championed the theme, “Simplify,” but the roar of the hydronic crowds to “Technify” drowned them out.  The crowds seemed to say, “If we only add more controls, complexity and technology, then people will love us and buy our product.  See, look how efficient we are.”   But the fact remained, as systems became more complex and expensive, market share shrank. 


Those inside the industry love the “techy” factor, but homeowners balk at the price and the maze of pipes and gadgets that clutter their home.  Efficiency is a relative, overused and overrated word.  Customers want to be comfortable at a reasonable price.  They don’t necessarily want to know how it comes about or to see the inner workings spread out on their wall like a dissected frog pinned on a board in a high school lab.  They want a warm floor, a simple device on the wall to give them control, and a low utility bill. The rest is best out of sight and out of mind.


Today, an 80%+ efficient furnace costs under a thousand dollars.  A boiler will run at least twice as much.  To a furnace you add ductwork.  To a boiler you add pumps and zone controls and mixing devices and indoor/outdoor controls and expansion tanks and, and, and, and.  A typical furnace installation has one thermostat on the wall.  A hydronic system often has four or more thermostatically controlled zones, each one adding to the cost and to the ego of the contractor that installed them.


So let’s try and look at this whole situation logically.  Forget the mechanical room, the efficiency ratings, the myriad of controls, and try to live through the senses of the homeowner.  Given a single thermostat on the wall, which do you think a homeowner would prefer, warm air sporadically rushing from floor registers, or a warm floor gently radiating heat?  No doubt the later would prevail in most cases.


Can the Trend be Reversed?

Back to the question, can the trend of shrinking hydronic share be reversed?  Suppose the hydronic industry concentrated on giving the customer a warm floor rather than rushing warm air and nothing more, and at a similar or only slightly higher price.  Would that make a difference?  Forget the quest for the highest efficiency, the ultimate in control, the race to see who has the most tech-worthy product, and just concentrate on giving the consumer what they want; affordable warm floors.  Would we see an overall increase in hydronic sales?
“But wait,” the hydronic pundits say, “that is not possible.” 


“It would cheapen the systems, it would offend our professionalism, it would take away or independence and our artistic license, it would damage the planet, and we couldn’t make as much money selling less expensive systems.”


Henry Ford heard similar arguments when he took on the task of making an automobile for the average person.  At that time the state of the art automobiles were hand built, sophisticated works of art, affordable only by the well heeled.  Many of them still grace our museums as things of beauty both mechanically and esthetically.  But if it were not for Henry Ford and his cheap automobile, we might still be walking; watching the rich speed by in those high priced horseless carriages.


The radiant heating industry can continue on its quest for the ultimate high tech boiler and the consummate control, right into extinction.  Or, it can turn on its heels and get busy really listening to the consumer and developing simple, cost effective systems that compete head to head with forced air.  It is possible.  Think back to the water heater, pump and pipe that started it all.  There is a solution, and it is within our reach, but it would take a big helping of humble pie to grasp it.

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