Does the VRF market in the US deserve the buzz?
Over the past five years, variable refrigerant flow (VRF) technology has received increased interest in the heating, ventilation and air conditioning (HVAC) industry due to its highly touted energy efficiency over traditional split system-ducted air conditioners commonly used in the United States, as Omar Talpur, analyst for Security and Building Technologies at IHS Inc., states in his research note. Due to this interest, numerous changes in the competitive landscape have occurred through acquisitions and new partnerships.
For example, Daikin, a leading Japanese manufacturer of VRF systems, acquired Goodman Global in 2012, six years after purchasing McQuay International. These moves were seen as a way for Daikin to acquire an installer network in the US rather than develop their own. In response to this, several US manufacturers formed partnerships with other Japanese VRF manufacturers including Trane and Samsung; Carrier and Toshiba; and Johnson Controls and Hitachi. Rather than build a new VRF product, partnerships were seen as the most effective way to bring this technology to market.
The question is though, does the VRF market offer the most opportunity to US manufacturers? In its report titled The World Market for HVAC Equipment, IHS found the current installed base of VRF systems in US commercial applications to be 275 thousand in 2014, only 3 percent of the total installed base of split system air conditioners. Furthermore, this is only forecast to increase to 5 percent in 2019. While VRF will start to replace some older split system air conditioners, many end-users will continue to want, and installers will continue to sell, traditional equipment.
Multiple forces are working against a more rapid shift to ductless VRF. Primarily, installers and integrators have a long history with ducted systems and are very hesitant to switch to another product which has a steep learning curve. Also, it is unlikely manufacturers will ever solely push VRF products, since they will have to share more revenue with their Japanese partners.
With these barriers, it remains to be seen if VRF can sustain the current momentum into the future or if relevant parties will lose interest in pushing the technology in favor of products more traditionally used in the market. If this uphill battle proves too costly for manufacturers and energy efficiency is not a strong enough selling feature for consumers, the US market may remain content in its use of the less-efficient ducted system and VRF technology may be relegated to niche applications.
by the Editorial Staff
