Navigant Research Blog

Is HVAC Disruption Possible?

Tom Machinchick — December 7, 2017

HVAC is ripe for disruption in global buildings of all kinds. Why? It is one of the highest energy consuming components installed in any building. Additionally, the chemical substances that HVAC equipment uses to cool a space are highly polluting and even dangerous to handle. Space heating and cooling, along with water heating, are estimated to account for nearly 60% of global energy consumption in buildings. The global building stock accounts for over one-third of final energy consumption, with an equally large amount of greenhouse gas emissions attributed to the space. Reducing the energy consumption and emissions of buildings is a necessity, or at least a significant opportunity, if the world hopes to meet its sustainability and emissions goals.

If It Ain’t Broke, Don’t Fix It?

So why is disruption of the heating and air cooling of buildings necessary? It’s not. Using today’s technologies, buildings can achieve net zero energy consumption. But this requires the implementation of renewable generation sources to offset consumption demand from heating, cooling, and other electrical loads. Demand can be reduced through the use of intelligent building management software and efficient technologies such as high performance insulation and building envelope materials, high performance windows, proper building siting, efficient lighting, and others. Even HVAC has improved in efficiency over time with advanced controls, ductless systems, variable refrigerant flow, and outside air handlers, for example. Intelligent building management tools such as building energy management systems tie these components together to optimize energy demand and consumption.

The above are optimizations of existing technologies, but they are not truly disruptive. Disruptive technologies make existing technologies irrelevant, changing the model of how a technology or process is used. Companies that fail to recognize the market adoption of the new disruptive technology will be left behind.

If It Ain’t Broke … Disrupt It!

Let’s look at a few examples. Smartphones existed before the iPhone, but Apple created a transition in how people use these devices. Trains reduced the time necessary to travel west from weeks or months to several days. SpaceX reduced the cost of access to space by a factor of 10 through reusability. Elon Musk’s new company, Boring, will reduce the cost of digging subterranean tunnels by around the same factor. In all these instances, the efficiency gained is measured in factors, not increments. If the HVAC operational model can be disrupted by similar factors, the global building stock drag on energy demand and emissions will be reduced significantly.

So let’s disrupt HVAC! That’s always easier said than done. It may be impossible to disrupt this industry if governed by, for example, the immutable laws of thermodynamics. But it is an area ripe for disruption mainly due to the significance of savings that can be achieved. Are there technologies that exist or that are being researched that can achieve this disruption, like solid-state heating and cooling? Maybe so. Disruptive technologies sometimes hide in plain sight for long periods of time.

Other headwinds to HVAC disruption also exist. Large incumbent HVAC vendors have the resources to maintain their market positions. There are high barriers to entry and large capital costs in this industry, making it more difficult for startups to innovate. It is a highly regulated industry. However, it is also in high and increasing demand in certain parts of the world, and building tenants are requiring more and more with regard to air quality, comfort, and individualized space conditioning.

The thing about disruption is that the naysayers win until they don’t. That was the case with the iPhone. In the case of HVAC, let’s hope someone’s collective vision gets blurred enough to capitalize on this huge opportunity.

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