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Thanks to boilers, the industry is heating up. The U.S. commercial boiler market is on track to reach the $1 billion benchmark and the residential boiler market is set to exceed an annual installation of 10 million units, all by 2024. According to a report conducted by Global Market Insights, “Rising demand for energy efficient systems to curb carbon footprints along with growing measures toward replacement of existing heating units will drive the commercial boiler market … And the introduction of standards and codes toward adoption of efficient heating technologies will fuel the residential boiler market share.”
So, what’s bringing everything to a boil?
It’s actually no secret that the growing use of smart thermostats; integration of IoT with boilers, and building automation systems (BAS) have all played a key role in fueling the demand and production of boilers in the U.S.
Smart thermostats — which are gaining popularity in both residential and commercial spaces — can save energy costs, provide insightful information and convenience.
The integration of IoT with boilers allows consumers, installers and manufacturers the ability to use information in a meaningful way. It connects components or systems to the internet and allows them to send and receive data over the network, which allows real-time remote monitoring and actionable analytics.
And finally, a building automation system, which is a computer-based control system installed in buildings that controls and monitors its mechanical and electrical equipment, can lead to energy efficiency. The enhanced interaction and operability among all of a building’s equipment allows for effective monitoring and targeting of energy consumption, which in turn allows manufacturers to improve the boilers they manufacture.
So, what does all of this mean for the boiler industry?
In keeping with tradition, we spoke to a number of manufacturers — AERCO, Bosch, Bradford White Corp., ECR International, Energy Kinetics, Navien, Noritz, NTI Boilers, Raypak, Riello, Rinnai, U.S. Boiler Co. and Weil-McLain — to get a better understanding of what the industry is doing and where it aims to go in the future.
We started by asking about the most recent news as it relates to regulations, and how that will likely impact the boiler industry in 2018 and beyond?
Like last year, most manufacturers addressed the Annual Fuel Utilization Efficiency (AFUE) regulations that will go into effect in 2021.
In 2016, the U.S. Department of Energy (DOE) finalized new standards for residential boilers that will raise the minimum efficiency levels from 82 percent to 84 percent for gas-fired boilers and 84 percent to 86 percent for oil-fired hot water boilers.
A second regulation, which is not finalized and has been put on hold by the current administration, is to potentially raise the new minimum efficiency levels for commercial boilers as well. The new DOE federal regulations related to commercial packaged boilers are expected to be published soon and will require that all boilers larger than 300,000 BTU/hr meet 84 percent or higher thermal efficiency, also by 2021.
Bradford White Corp., ECR International, Raypak, U.S. Boiler Co. and Weil-McLain are all keeping an eye on the new regulations and their impact on the boiler industry.
“Presently, there are two rulemakings that are likely to impact boilers in 2018,” says Carl Pinto, director of marketing at Bradford White Corp. “One in the U.S. and the other in Canada.” The U.S. rules, as we know, are set to go into effect in 2021, at least for residential. Canada has a similar rule proposed (Amendment 15) that would impact energy efficiency requirements for both residential and commercial boilers.
“Bradford White is working with industry trade associations and other stakeholders to ensure that both rules accomplish their goals of driving energy efficiency while also being technologically feasible and economically justified for both consumers and boiler manufacturers,” Pinto adds.
“What these higher efficiency standards mean,” says Peachie Maher Hytowitz, product manager, Commercial Products at Raypak, “is that atmospheric boilers are becoming virtually obsolete. In order to meet the new high efficiency standards, manufacturers continue focusing on improved efficiencies with fan-assisted or condensing boilers. At Raypak, we are laser focused on higher efficiencies.”
In addition to the minimum efficiency regulations, Michael Boyd, product manager at Weil-McLain says there is a third impact looming, and it includes new testing procedures. “As a manufacturer with one of the broadest lines of products in the industry, it is a challenging endeavor that requires additional resources to properly balance the implementation of our future product roadmap innovations, while addressing the compliance needs of our existing legacy products.”
The minimum efficiency and new testing procedures have been on manufacturers’ radars for a while now. But there are other considerations that need to be taken into account.
“The Massachusetts Plumbing Board is looking to ban PVC as an exhaust material, which would have an impact on Bosch’s products,” says Justin Stephens, product manager at Bosch Thermotechnology.
Also, there is California’s Proposition 65, a warning label requirement that will impact the boiler industry as well. It states that in California, you need to list all the chemicals, found in or produced by your products, on a new warning label, as opposed to a generic label.
This new regulation requires companies to be more specific and inform the public of hazardous chemicals found in or produced by its products.
“In preparation for the Massachusetts Plumbing Board’s potential ban on PVC,” Stephens adds, “Bosch is ensuring none of its products contain PVC and updating its manuals to reflect this change. Bosch is also revising its warning labels, so they meet the requirements stated in California’s Proposition 65.”
John Kopf, boiler product manager at Navien also brings up venting materials as a talking point, in addition to net zero energy homes, Energy Star, federal tax credits and incentives, and low NOx.
“Some jurisdictions started disallowing PVC for boiler exhaust systems and this trend will most likely continue in the future,” Kopf says.
As for net zero and Energy Star-certified homes, builders are allowed to choose a prescriptive or performance path. The DOE Zero Energy Ready Home prescriptive path requires builders to meet or exceed the minimum HVAC efficiencies such as 80 percent AFUE in hot climates, 90 percent AFUE in mixed climates and 94 percent AFUE in cold climates. “Since 2013 onward,” Kopf says, “some building codes in the Southeast where electricity was the main source of heat started to encourage the use of heat pump water heaters. This trend is going to continue past 2020 with the support from local utilities. By 2030, all new homes in Canada will be built as net zero with its main focus on integration with renewables such as solar, wind and heat pumps.”
Federal tax credits and incentives are slowly drying out with the exception of the 30 percent tax credit for solar thermal systems that were extended to the end of 2019 and are predicted to decrease to 26 percent in 2020 and 22 percent in 2021. “Local utilities provide additional rebates for qualified boilers, combi units and water heaters,” Kopf says. “In lack of federal incentives, local utilities will continue providing rebates in the coming years.”
Last, but not least, Kopf says the South Coast Air Quality Management District (SCAQMD) is the leading organization when it comes to new code developments. “Other states look to the SCAQMD regarding this subject and tend to adopt similar rules. It is forecasted that most of California’s SCAQMD rules will eventually be implemented in other states. Currently, most counties in California require NOx levels to be below 20ppm.”
Joe Langlois, marketing manager for ECR International mentions that most localities are requiring some type of device to prevent the boiler from operating in a low water condition. “Utica Boilers has been adding low water cut off protection on the majority of our boilers,” he says. “This feature reduces potential failures and makes it easy for the installer to comply with codes.”
Codes and regulations are in constant change and manufacturers have to remain cognizant of all of it to stay competitive. But it’s not just codes and regulations that keep product developers up at night. A lot of consideration needs to go into trends. What are they? Who’s setting them? What’s next?
We asked which trends from last year are still around, and what do you predict will be the five biggest trends of 2018? Click here to keep reading.
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