Rethinking Radiant: A Forecast for 2008

Editor's Note: This month, we're pleased to present an article by the Radiant Panel Association's executive director Larry Drake on his views of the radiant heating market in 2008. Bob "Hot Rod" Rohr will return next month for his regularly scheduled column.

If you listen to the mainstream media you could easily conclude that there are dark days ahead for the U.S. economy. Of course the press seems to feel it is their job to alarm the population. After all, good news doesn't sell newspapers. But, put down the paper and turn off the six o'clock news, and you will find that the economy is cruising along quite nicely. We are not only the most affluent country in the world; we are the most affluent society in the history of the world. That doesn't seem likely to change any time soon.

That being said, it cannot be ignored that the deterioration of lending practices resulted in an inflated balloon of home building, which has come to an abrupt halt. The pendulum that carried a lot of people into homes they could not afford has started to swing the other way. As would be expected, this had an impact on radiant heating sales in 2007 and will carry on into the next few years. The industry can no longer depend on growth due to the sheer number of housing starts.

Although 2007 was a lackluster year for most of the radiant heating industry, a good number of businesses reported a forth quarter bounce back. Some even said the forth quarter made up for the slow year. Whether or not this trend will carry into 2008 remains to be seen, but indicators are that it is a short lived rebound at best.

The fact is radiant heating is only a small fraction of the heating market. Some estimates put it under 3%. The future of radiant heating isn't maintaining a 3% share of a declining market. If that were the case, the future of radiant heating would look pretty grim. The future of radiant heating is the other 97% that is opportunity. If the radiant heating industry can increase its market share faster than the market declines, its future can be bright.

And why shouldn't we expect that? After all, there are markets around the world where radiant heating is the dominant force in space heating. Not only are there countries where radiant heating is a significant player, there are a wide variety of socioeconomic situations as well. Not all countries where radiant heating is a popular choice are dominated by wealth. Take a country like the Republic of Kazakhstan with the second largest population in central Asia. It is estimated that more than half of the new development single-family row houses are totally or partially equipped with a floor heating system. China and Korea have embraced radiant floor heating and are exporting their technology in big numbers. There are many examples where living standards are far below what we enjoy here in the U.S., but they are enjoying the comfort of radiant heating.

Too often we look to highly sophisticated, technologically advanced countries like Germany, to provide us with a model of how we should develop our equipment. We tend to use complex technology that only the rich can afford. We spend a lot of time and money squeezing that last bit of efficiency out of our radiant heating systems to make less than 3% of the homes comfortable and energy efficient. The truth be told, we could save a lot more energy if we sacrificed some of that efficiency and made radiant heating more affordable so that it would see wide spread use.

That brings us to the point of this article, my forecast for the coming year concerning radiant heating. First, electric radiant heating systems will continue to see a growth in popularity and market share. People are naturally drawn to the concept of warm floors, invisible heat and comfort. One of the areas where this is particularly attractive is the bathroom. When people can't afford to build a new home, they remodel. The electric systems are ideal for this market. They are becoming readily available from box stores, the Internet, floor-covering dealers, and even electricians. For the most part, they are easily installed and maintenance free. Most importantly, the average consumer can afford them for their bathroom, kitchen or converted porch.

Hydronic systems, on the other hand, are generally used as the primary or only heating system for the entire building. With new construction on the decline, hydronic contractors will need to focus on two areas if they want to grow their business. First is finding ways to become more competitive in new building construction. Second is to develop the retrofit market as homeowners remodel instead of build. Both of these markets will demand cooperation from the suppliers and manufacturers. The high-end market will not go away, but neither is it a growth area. Contractors who are satisfied with putting in a few high-end systems a year will likely continue to find takers, but that market will remain small and exclusive.

The hydronic radiant industry has historically played to the exclusive high-end, custom homebuyer. At the same time, there has been a relatively quiet movement to provide more cost efficient systems to the average consumer through the Internet and direct selling. Unfortunately, the quality of equipment and support provided by many of these companies has been sadly lacking. What they have proven is that there is a large demand.

The commercial market is virtually untapped by the radiant industry, the biggest obstacle being the engineers and the design process. Through participation in organizations like ashrae and other regulatory bodies, the slow process of education will continue. The current surge in "green" thinking will open some doors that have been closed in the past. The commercial arena is one area where radiant heating can be truly competitive if given the chance.

The future will require a rethinking within the hydronic radiant industry, a paradigm shift, if you will. If the industry is to remain viable in a shrinking building market it must refocus its efforts and technology on more user-friendly and affordable systems. While there will always be a place for the custom system, where each component is hand selected and assembled on the job, that market has little or no growth potential. Growth will come when the industry provides a product where all the components are pre-assembled, easily installed and easily serviced by average heating contractors. All this at an affordable price, a la forced air.

Imagine installing a residential forced air heating system if the blower, filter, burner, heat exchanger, and controls all had to be individually sized, selected, assembled and mounted separately on a wall mounted board and interconnected with field fabricated duct work. Throw in some extra controls to provide different air temperatures to various parts of the home and provide thermostatically controlled zone heating and the price would be astronomical.

The required skill of the field technician would also be far greater. Yet this is how the hydronic radiant heating industry is operating. It is no wonder we find it difficult to compete.

Some say an affordable, cost effective hydronic radiant system is not possible, but I say we have the knowledge and the technical skills to make it happen. In 1947 William Levitt began a construction project that resulted in over 10,000 radiantly heated starter homes for returning GIs. The systems were simple and inexpensive. They were mass produced and all pretty much identical. They were easy to service and reliable. Yes, there were failures, but they were primarily due to the materials available and the construction standards of the day. You would think that with sixty years of experience and technological advancements, we should be able to at least duplicate this concept. And if we don't, we will stay a very small industry servicing the upper echelon of society.

I believe the industry is beginning to wake up to what it will take to access the 97% market opportunity that it is currently missing. 2008 will be a year of repositioning and adjusting. It won't happen overnight, but a change in thinking has begun. That is the first step. The future may still be bright for radiant heating.