Navigating the Challenges Ahead

What keeps water heater manufacturers up at night? We asked the following question:

• What’s the biggest challenge facing your business or the industry right now (supply chain, tariffs, labor, code adoption, etc.), and how are you addressing it?

Here are the verbatim responses we received and, more importantly, how these manufacturers are helping PHCPPros adapt to a changing market.

A. O. Smith

“One of the biggest challenges facing the water heating industry today is managing the transition to higher-efficiency technologies while balancing customer expectations around cost, installation requirements and product availability. Regulatory changes, labor shortages and economic uncertainty all add complexity for contractors, engineers and building owners. At A. O. Smith, we’re addressing these challenges through early planning, product innovation and strong customer engagement. We work closely with channel partners to understand market needs, invest in training and education, and develop solutions that make compliance easier while minimizing disruption. The focus is on helping customers adapt with confidence.”

—Matt Baranuk, portfolio director

AERCO, a Watts Brand

“A major industry challenge today is helping customers balance decarbonization goals with real-world infrastructure constraints. Many facilities are interested in electrification, but may face limitations related to available power, building design or project budgets. At AERCO, we help customers evaluate multiple technology pathways and right-size systems based on actual demand rather than historical assumptions. By combining application expertise with a broad portfolio of solutions, we can help reduce complexity and identify practical approaches that improve performance while meeting efficiency and sustainability objectives.”

—Mark Croce, senior product manager

Chronomite Laboratories

“Chronomite is committed to customer satisfaction and on-time delivery. We have the ability and financial resources to make sure our incoming raw materials and finished goods meet the minimum safety stock levels required to meet the customers’ fluctuating demand.”

—Edward Fabrizio, vice president and general manager 

Diversified Heat Transfer, Inc. 

“The industry faces two major challenges right now: tariff volatility (such as steep duties on raw materials like copper and steel) and strained manufacturing capacity driven by the massive surge in data center construction, which is causing industry-wide lead-time bottlenecks. We address these challenges through proactive supply chain management, careful material forecasting, and optimized factory production. By maintaining efficient pre-packaged assembly processes, we mitigate external delays and ensure our manufacturer reps and customers continue to receive reliable equipment with competitive lead times.”

—Christopher Bove, national sales manager

ECR International, Inc. 

“The uncertainty in the market related to tariffs has been an ongoing concern. ECR continues to monitor tariffs closely and adjust accordingly.”

—Bob Shea, executive director of sales

Essency

“Global shipping and raw material volatility are affecting all of us, but our biggest hurdle is simply exposure — we’re still the new kids on the block. To tackle that, we’ve been scaling our footprint nationwide by growing the team with experienced pros and onboarding elite rep agencies that are a good fit for our products and partners to help us grow. We’re also pouring resources into field-level training and product knowledge to drive demand and grow wholesaler and installer confidence in Essency and the EXR.”

—Scott Isaksen, national sales director

GE Appliances Air & Water Solutions 

“The industry’s biggest challenge is workforce and market readiness for the shift toward heat pump water heaters. Product availability alone is not enough: Contractors, wholesalers and homeowners need clear guidance on applications, installation, service and performance. We are addressing that readiness gap through hands-on trade training and education designed to build contractor confidence. We are also developing products around real-world installation and service needs, including convertible 120V-to-240V models and serviceable systems, so professionals can recommend and support the technology with confidence.”

—Dan Capelle, director, product management

Lochinvar

“The biggest challenge we see the industry and our customers facing right now is navigating efficiency standards and decarbonization requirements. Lochinvar is committed to engineering and supplying units to commercial applications that are practical and efficient while also highlighting serviceability, reliability and the capability to handle changing demands. As we look ahead to new innovations and features in our products, customer feedback and industry guidelines shape our roadmap for products that are efficient, flexible, supportable and easier to apply in real-world systems.”

—Dustin Wiggins, portfolio director

Lync by Watts

“One of the most significant challenges facing the industry is the combination of electrification goals and workforce development. Heat pump systems are becoming more common, but many contractors and technicians are still building experience with heat pump technology. At Lync, we address that challenge through training, startup support, technical resources and a dedicated team that works closely with representatives and customers. When needed, our team will travel to the jobsite to assist with system startup, commissioning, troubleshooting, and optimization. Our objective is to reduce barriers to adoption and help ensure projects are successful from design through long-term operation.”

—Jacob Bucklin, product manager

Navien Inc.

“One of the bigger challenges facing Navien’s NWP500 and heat pump water heaters in general is getting the traditional contractors to adopt, recommend and properly install HPWH, as many are accustomed to emergency “like-for-like” gas or standard electric tank replacements completed in relatively quick time. HPWH systems require different spacing, condensate drainage and specific airflow, driving up complexity in installation. The NWP500 addresses this with a full stainless steel tank that eliminates the anode rod (removing a common corrosion point and simplifies long-term maintenance), a Startup Wizard that helps guide installers through setup, and flexible top/side connections for tight spaces.”

—Chia Lin, product manager

PVI, a Watts brand

“The industry continues to face a combination of rising costs, evolving regulations, workforce challenges and increasing project complexity. At the same time, building owners are looking for solutions that deliver efficiency, reliability and long-term value. We believe manufacturers play an important role in helping customers navigate those challenges through education, training, application expertise and flexible product offerings. By maintaining a broad portfolio of customizable solutions and investing in our training facilities, PVI emphasizes helping customers address changing requirements without sacrificing performance or reliability.”

—Helen Ringle, product manager

Rinnai America Corp.

“One of the industry’s biggest challenges is keeping pace with evolving technologies while addressing the ongoing skilled labor shortage. Rinnai is responding through continued investment in education, technical support and hands-on training for PROs. This includes expanding training resources, launching a new mobile training unit in Canada and developing tools that help PROs install, commission and service products more efficiently. By investing in the success of the trades, we’re helping build a stronger workforce while ensuring customers receive the best possible experience with Rinnai products.”

—David Federico, senior director of marketing

Steibel Eltron Inc.

“One of the biggest challenges is increasing awareness of what modern electric tankless water heaters can do. Many specifiers, builders and some plumbing professionals still associate electric tankless products with point-of-use applications and remain skeptical of their ability to support whole-house demands. We’re addressing this through education, training, and real-world project examples that demonstrate successful residential and multifamily installations. Also, contrary to what many assume, electric tankless is generally less susceptible to scaling than gas tankless, which can experience mineral buildup on heat exchangers. Direct Coil is engineered to be self-cleaning, helping maintain reliable performance even in hard water conditions.”

—Jonathan Walsh, president