HVAC Boilers Continue to Find Their Niche | 2017-10-30

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The residential boiler market in the U.S. is somewhat small when compared to the rest of the world. In fact, according to some estimates, only about 9 million U.S. homes are heated with boilers, 60 percent of which are in the Northeast. Most single-family homes in the U.S. — about 35 million — are heated by forced air furnaces. The situation is exactly the opposite in Europe, where boilers heat the vast majority of homes.

Still, boiler service and installation keep a number of contractors very busy in the U.S., as homeowners who have experienced hydronic heat are often life-long fans of the technology. And as they have moved from the Northeast to other parts of the country, they have taken their love of hydronic heat with them, creating demand for service all over the U.S.

SOUTHWEST SERVICE

You wouldn’t expect to find a large residential boiler market in the Southwest, but Keefer Rader, owner, Outlaw Mechanical, Sandia Park, New Mexico, is trying to change that perception. Rader opened his business in 2008 as a full-service plumbing, heating, and cooling company, but he now specializes only in boiler service, repair, and replacement. He recently started offering ductless mini splits as well, but he has no plans to expand his product line any further.

“There are so many residential contractors out there installing equipment on the cheap, and I don’t want to compete with them anymore,” said Rader. “We offer a quality product, and our work is art. For 16 years, boilers have always been a passion of mine, and I get excited every day I get to wake up and work on them.”

He is particularly excited when faced with a challenge, such as when a homeowner asked him why his new electric boiler (which was installed by a different company) was costing him $800 a month to operate. The homeowner had installed a 16,000 kW solar array on his house and, frustrated with his high electric bills, asked Rader to replace the electric boiler with a gas-fired boiler. After taking a look at the system, Rader asked the homeowner for the opportunity to see if he could make the existing equipment work.

“I repiped the system, installed the right pumps, and told him that if he didn’t like it, I would credit that work towards the new boiler,” said Rader. “Three months later, he is super happy, and he’s getting a check from the power provider every month, even in the winter.”

Still, the hydronics market in the Albuquerque area is small, as furnaces are the most widely used heat source for homes, although the new inverter-driven heat pumps are starting to gain in popularity, noted Rader. “About 30 percent of the homes in New Mexico have some form of hydronic heating, and it’s a mix between in-floor and baseboard heaters. We very rarely have radiators in our area, and oil and steam boilers are pretty much nonexistent.”

Of those homeowners who do have boilers, most have a cast-iron atmospheric model, and they often look for a similar boiler when it comes to replacement. “Many people in our area are not educated about condensing boilers, so they’re just looking for an 80-percent atmospheric replacement,” said Rader. “Once we educate them about the benefits of a modulating condensing boiler, we can upgrade about 50 percent of them to that kind of system.”

After last year’s “miserably mild” winter, Rader is hoping for cold weather to boost boiler sales this year. “Last year, about 70 percent of our revenue was from repairs and 30 percent was replacement, which is super low. So far this year, we’re seeing about 50 percent replacement over repair, and we still haven’t hit our heating season. And thanks to better financing options, our customers have more incentives to replace rather than repair.”

CONSISTENT SALES

Boilers are also not a popular heating option in Michigan and comprise only about 5 percent of the sales at Boelcke Heating Co., Stevensville, Michigan. The company primarily focuses on service and replacement, although it also works in the high-end, residential, new construction market and offers commercial remodels and buildouts.

Sales of boilers have been consistent for the last few years, said Dave Boelcke, company president, with about a 50-50 split between cast-iron and condensing models. “Price is the main reason why customers do not purchase condensing boilers, but venting issues are another reason why some homeowners stick with cast iron.”

One of the trends Boelcke is currently seeing is that homeowners are choosing to replace their oil-fired boilers with gas- or propane-fired models. “Unless the chimney is still intact, and the oil tank is good, homeowners usually choose to switch fuels,” said Boelcke. “They are also looking for boilers that can heat domestic water. In fact, that’s our biggest add-on option.”

Rob Basnett, president, Basnett Plumbing, Heating and Air Conditioning, Littleton, Massachusetts, still installs a fair number of oil boilers but usually only when natural gas is unavailable. And even though he is located in the Northeast where hydronic heating is most popular, only about 25 percent of his business is comprised of residential boiler sales. “We primarily work  on homes, providing service, repair, installation, and replacement of all plumbing and HVAC equipment and systems,” he said. “We do not work with general contractors, and we do not work in new construction.”

Basnett said sales of residential boilers have increased lately, thanks to additional marketing efforts by his company, increased customer awareness, and utility rebates and incentives.

Customers are also becoming more interested in having a ductless mini-split heat pump installed along with their boiler.

Usually, that new boiler is a high-efficiency model, which most customers choose to install after Basnett explains its benefits. “Our bestselling model is a 95 percent-plus gas boiler with outdoor reset control. With today’s codes, the knowledge we have, and the rebates, the high-efficiency boilers make more sense.”

And given homeowners’ long-standing love affair with hydronic heat, contractors can be sure of having a loyal base of boiler customers just about anywhere in the U.S. 

Publication date: 10/30/2017

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