While I’m not even close to being an economist, or even an accountant, it takes only basic understanding of our National Debt to see where our economy is headed – rapidly over a very high cliff, and to know who the drivers are who are sending us over it.

These 3 sites will help you see the cliff straight ahead:

USA debt in 3-D

USA Debt Clock

USA Credit Rating Downgrading

As you can see from previous blog posts, I often preach the virtues of recognizing how to be profitable in the trades, the essence of which is knowing one’s costs of doing business so one can mark up those costs to affect a reasonable profit margin. The only other alternative to not knowing one’s costs is to stick one’s head in the sand and hope everything will turn out okay. This is exactly what our federal and local governments have done while “serving the people.”

Folks, our elected officials are so bought and sold (by the banking industry) that they no longer represent the people – they represent special interest and are hamstrung to do anything meaningful to save our economy and once great nation. Our system of government – once the envy of the free world, and capitalism itself, have been corrupted and there are terrible times ahead – just look at the US Debt Clock (link above).

I’m afraid the only thing that will save us is to participate in a silent revolution – Send Washington a Stern Message: Nobody Vote!

When nobody votes, nobody gets elected. Then we can start our grass roots democracy all over again!

Okay, back to reality…

I really don’t know what it will take to correct the course our country is on, which means the course everyone of us are on, short of not taking part in the Ponzi scheme we call the banking system, but I do know that (on a grass roots level) if we as tradesmen don’t start to understand our costs of doing business, we are no different than the so-called leaders we elect who are screwing up our country and doing a massive money-grab as they do it.

To calculate your costs, I offer you free Excel workbooks to do just that.

http://www.thehvacguru.com/free-apps/

Register today and post your questions or comments on the forum.

Could it be the term “Time & Materials” is the real spectre that haunts the trade, year after year, generation after generation?  Are we to believe there are no other significant costs worthy of consideration other than T&M? It’s obvious to me that tradesmen are predisposed to believing this – I’ve been competing against them for 23 years! In reality, there are a lot more costs beyond time and materials that must be included in most estimates in any of the dozens of building trades. Vehicle and burden costs and the costs generated through the insidious process of disorganization are a few examples. SEJES keeps track of these.

To reiterate, the outcome of profitability is often determined by consumers’ expectations, which in large part is determined by what the spectrum of tradesmen charge. What tradesmen should charge is based on what tradesmen should see in terms of their total costs, and if they don’t see them then they don’t pass them on in their sell price. This, of course, can only collectively lead to unrealistic rates across the entire spectrum. These rates are mistakenly seen as “competitive.” (The competition is really one bidding against oneself!) For the most part, they aren’t really competitive inasmuch as they are baseless and dangerous to millions of livelihoods in the trades and they constitute nothing more than practice-in-place-of-profit!

It’s bad enough that our system has taken a dangerous turn in the direction of believing that “low prices” are something to always be strived for. Thanks, Big-Box-Stores! Thank you economic slaves of the developing Third World! Tradesmen are playing pin-the-tail-on-the-donkey with pricing. We have to lose the blindfold, very soon, or there won’t be tradesmen and craftsmen.

This is exactly why PEX tubing, CSST gas piping, pre-fab copper and steel manifolds and the like are supplying the demand by a less talented and competent group of tradesmen. Anyone can run PEX; not anyone can craft systems together with talent and skill developed under a seasoned master. Manufacturers are making systems with self-diagnostics, in part to squeeze out more efficiency, but to make troubleshooting easier for a less committed trade. Tradesmen have contributed to this situation with trying to get jobs done quicker to be more competitive, using products that reduce one’s labor cost. Meanwhile, the increased materials costs means that a bigger piece of the same sized pie comes out of the tradesman’s pocket and goes into the manufacturers. CSST will never demonstrate the same craftsmanship of the installer like a steel job can do, nor will PEX potable water systems ever be nearly as nice looking as a new copper system. When I started in the business at Tenney Fuels, Inc. (Concord, NH), installers used to paint steel steam pipes and cast fittings with coal tar epoxy so they wouldn’t rust and look bad, and every pipe ended up plumb and level. We painted fuel tanks! Who does that? Point: our time was how the company made money and how we got paid. There was no rush to ever get a job done for sake of speed if quality would suffer. Quality was the company’s stock in trade. Why would anyone want to give that away by compromising one’s work quality, or by giving up more of one’s pie to the profit objective of a manufacturer? I think because consumers’ better judgment has eluded them while they were searching for low prices, and tradesmen fell in line. SEJES turns that around. The print outs of SEJES are so impressive that the user can justify charging for it!

The Flat Rate billing method was devised to avoid the deathtrap it sees T&M as being. Even so, Flat Raters don’t seem to concern themselves with counting all their costs, because they pad their charges so heavily that they are destined to be profitable…and infamous for making between $125 and $400 per hour. One can see the allure of jumping on that band wagon, but if you’ve been paying attention you’ve noticed that flat rate-pricing is not the panacea that it often claims to be. Most importantly, the Flat Rate method does not require its users to actually know all of their costs – they simply need to turn to the appropriate page in the handy price book for the sell price for the part in question. From my grab-the-bull-by-the-horns perspective, this misses the critical point one should be aware of: knowing one’s costs so one can know what to charge so one can be reasonably profitable. The Flat Rate approach, I believe, is akin to increasing one’s pain-killer dosage without ever looking at the cause of the pain. All this does is keep the patient hooked on the treatment of the symptoms rather than eradicating the illness. I know GPS is great for many, too, but I prefer to use my own brain and a map to get me to where I want to go. I’m not going on a night raid on my enemy; I’m going to the supply house! To use one more metaphor, Flat Rate and T&M aids and abets the ‘criminal’ (bad financial management by tradesmen) responsible for defrauding many an otherwise skilled and/or talented building tradesman of a reasonably profitable career and a more comfortable life.

SEJES, The Anti-Budget and Business Financial Workbook; not social media, are designed to solve the inherent problems with T&M and Flat Rate.

I know, this subject goes well beyond the scope of the presenter’s demonstration, and that, ideally, tradesmen should be getting jobs through social media networking. But what’s more important to me is that we put the horse (knowing one’s numbers) before the cart (social media) and the best way to do that is to download SEJES, The Anti-Budget and the free book keeping system. Then, I’m willing to bet that a tradesman can learn how to be profitable quicker than he can learn how to Tweet!

During those years I was developing a system I started in Lotus 123, and switched to Microsoft Excel, for calculating job estimates. Each year I became better at producing increasingly accurate estimates and had a materials database thousands of rows deep, and growing. As I discovered more and more costs associated with a given job and had defined labor by task, I included the structure in the Excel system to calculate them automatically the next time I did an estimate. My system freed up so much time by avoiding re-inventing the wheel every time I did an estimate.

I spent a couple of years in the capacity of Sales Engineer for other companies, all the while perfecting my system that I used in parallel with theirs. This was exactly the outside perspective I needed to round out my awareness of costs for design/build and plan/spec jobs, as I saw their profit margin percentages and learned which ones were reasonable and those that were not and lead to lost bids. I got so good at doing estimates in my system that I could do the estimate, then dump my system’s numbers into their system and still produce 2-3 times more estimates than their other sales engineers. Soon, I gave my system a name: “SEJES” (Sales Engineer Job Estimating System). Anyone can be a “sales engineer” with this system, even tradesmen with few computer skills!

As an accessory to SEJES, I created “The Anti-Budget” (more on this later, but suffice to say, my opinion is budgets are often like diets and New Year’s resolutions – they’re hard to stick to) for the express purpose of calculating my personal financial break-even point. With the pair of user-friendly cost calculators in hand, I can easily total all costs for any job type. It’s actually fun to create what-if scenarios using differing mark-up rates and seeing how they affect gross profit percentages, just by entering a simple value each time. This is the easiest job estimating system that I have ever seen, as I built it with not-so-computer-savvy tradesmen in mind.

With the advent of SEJES and The Anti-Budget, I am now able to eliminate the things responsible for my past unprofitability: not including all costs for me to do a job and not knowing what constitutes a reasonable gross profit for it.

After showing these systems to my accountant who is well versed in financial accounting for the construction trades, she concurs with me that most tradesmen are very poor at calculating all job costs, including relevant numbers for their tax return. She regularly sees contractors with the same handicaps I once had. She said that 95% of her clients in the trade don’t organize their numbers at all and are constantly behind the 8-ball with knowing their financial standing at any given moment. This made me think I was definitely onto something extremely important with SEJES, The Anti-Budget and my Business Financial Workbook (also in Excel). She thinks my systems are just what the trades need to help them with an otherwise mysterious and seemingly daunting task that the majority have no specific training in for overcoming.

I’ve come to believe the monetary spectre haunting the trade as a whole is rooted in the reckless throwing about of meaningless numbers. But this is what a lot of tradesmen do when they do job estimates and simply base their service and install rates on the local prevailing rates so to be “competitive.” Tradesmen also avoid effective book keeping and instead throw a pile of papers into a shoebox and then drop it off in the beginning of April at their accountant’s office. How can this help the tradesman to know his financial standing during the year? Crazy! Like base jumping and forgetting to strap a parachute on one’s back. And for many, their first leap into the business of plumbing and HVACR will prove to be their last for the same reason: lack of preparedness. If adhoc cost consideration by the masses is not how the trade came to be in the sorry financial state that it is in, then I am convinced it is what keeps it there. Consequently, this causes young career-seekers to look away from the building trades and instead look to technology based fields for training and employment and the greater promise of a more rewarding career, one that is less physically demanding, too. Besides, who wants to be a martyr to a false cause? The causes and effects that this problem has had on the trade have been plain to see, but most turn their heads for lack of a solution to offer. My Excel calculators do exactly this, offer a solution; social media does not.

Does the looming shadow that I speak to create a precedent for consumers of building trades services to expect unreasonably low prices? (In the mind of the unwitting consumer, you are gouging if you charge $135 per hour when your ‘competitor’ charges $85.) If it does, then the converse is true too. I predict contractors will need to be the first to change in order for the industry as a whole to become profitable enough to turn the status quo on its head. Of course, there are other economic contributors, but let’s take one thing at a time, the most important thing that building trades businesses are responsible for.

(Is Not Social Media?)

Part I

I attended a wholesaler-sponsored presentation on ‘social media for the trades’ the other day, and the non-tradesman speaker opened with the assertion that trades businesses need to develop their brand on the top social media platforms like, Facebook and LinkedIn. Using her fiancé and carpenter as an example, she explained that he wasn’t profitable using traditional advertising resources, so she helped him learn the top 3 or 4 social networking platforms, and that soon most of his business came from this new resource. As she spoke, I wondered how the other 10 tradesmen in the room perceived the speaker’s assertions that they need to get online and Tweet their way to sales. Several spoke up during the Q&A that followed. ‘How much time will I need to spend on social media to make it work for me?’ This was the most important question asked and the one that ran through my head as I sat in this old-school-meets-new-technology gathering. The speaker answered, “1-1/2 to 2 hours a day.” That translates to 10–14 hours per week. The 2^nd question I had was one that I knew the speaker wouldn’t be able to answer, so I didn’t ask it. “Where is a tradesman going to find that kind of time to create, what, “greater profits” or just greater sales?” Often the 2 are mutually exclusive, as I demonstrate in this article.

It used to be in the trades that a business owner only needed to pay a monthly fee for Yellow Page advertising, then sit back and watch business come in. Not so with social media – you only get out of it that which you put into the networking effort necessary for that to happen. I know, as I’ve been online in search of HVACR customers for 6 years. I have social media accounts, but find it very demanding of my time – too demanding. Besides, I get most new customers by word-of-mouth.

A contractor since 1988, Tech School graduate with a business degree, some engineering experience and lots of computer experience, I can attest to the steep and ever-changing learning curve associated with the digital revolution. I bought my 1^st computer – an IBM 286 – in 1990 for $4,000, a time on the digital-evolution ladder when you had to know things like DOS (Digital Operating System) and writing macros (programs written in specific code). Soon thereafter, you could dial up the Internet and expend hours waiting for pages to load so you could surf the Web. Computers and Internet technologies have come a long way since then, and running parallel to those changes is a learning curve that you never really get over. It takes years of training and hands-on experience to get good at it – just like learning a trade and mastering it. First, one must learn how to type and develop good communicative grammar, so you come across as smart and intelligent to the Twitter followers you want to attract. I can’t speak for you, but I think most tradesmen are better plumbers, technicians, carpenters and electricians than they are typists, or bloggers, for example. Plus, I’ve witnessed much disdain for computers among tradesmen and counter guys, alike. Many have little to no digital technology skills, so how will they learn how to “Tweet?” For these tradesmen, isn’t social media networking the cart before the horse? And define “horse”.

I believe that eventually tradesmen will recognize that they have to come up to speed with computers, unless they are nearing retirement and can’t see the value in trading their dwindling time for updating their skills set. The “horse” that I am staring in the mouth is the bigger decision that tradesmen must make and that lies in the answer to the question, “What is my plan for becoming more profitable so I can free up the time I’ll need to do things like live well and be comfortable in retirement, and, oh yeah, learn how to Tweet?” Time-is-money and tradesmen need more of both for the things that help them get ahead at a pace fast enough for profits to stay neck-and-neck with one’s needs, or to pull ahead and reach one’s desires. This includes online marketing means.

To me it’s a no-brainer: The greatest challenge to tradesmen is in realizing and accepting how to accurately calculate personal and business costs. Next is learning how to turn those costs into a sell price that returns a level of profit necessary to provide a reasonable standard of living. When this standard of living is reached, tradesmen can then choose to spend their time on things like social media networking.

The problem with this new age way to advertise a business is it requires us to come up with ‘14 hours a week’ for online social interaction. The Yellow Pages didn’t demand that! For this time to come available we will need to subtract 14 hours from the field. Before we can do that, don’t we need to go up on our rates to accommodate our new pursuit, social media? I think you’ll agree, that’s easier said than done. It is, especially if a contractor doesn’t know how to base his rate increase on something tangible and smart and justifiable. If he doesn’t do his math (calculate break-even so he can know what he needs to charge) because he lacks computer skills, and the manual method is too time-consuming, then he probably wings it and charges something near the going rate in the area, or sells a job at a price “he can live with.” Besides, who’s got time for math, he’s too busy in the field building stuff – the way he makes money (or does he?). If he’s on this road of just winging it, I can attest it will only lead to financial disaster.

After 12 years in the HVAC trade, and 4 years in business I was a decent technician and installer, but a “hack” at making money. One crisp fall morning, at a supply house loading dock, a successful plumbing & heating company – the highest priced one in the area – owner asked me, “How’s business?” I answered, “Very busy!” He said, “Yeah, but are you making any money?” “Not as much as I’d like.” He fired back, “Then you need to go up on your rates!” I thought I knew what I was doing and demonstrated by saying, “If I do that, then I will lose customers.” Before disappearing into the supply house he finished with his advice. “That’s exactly what you want. You’ll work less and make more money!” The meaning of his seemingly contradictory statements wouldn’t be revealed to me until I finally got around to “doing the math” and realized I wasn’t even making as much money as I did in my previous job as an employee. And now I work far more hours! I took the owner’s advice and exactly what he said would happen, did, when I went up on my rates – I lost customers, worked less and made more money than ever before, but it still was not enough to keep me out of the dog house, financially. I acted too late by not charging enough to overcome the reasonable overhead that I had to carry out my business of servicing and installing HVAC systems: a new van, a new truck, 2 employees, insurances, answering service, etc., and went bankrupt in the mid 1990s, like so many others around me. Fortunately, I only discharged out-of-state credit card debt (my “line of credit”) and didn’t burn any bridges with my suppliers. I remained in business and years later I was still better at losing money than making it. It would take 16 more years – a period I call, practice-in-place-of-profit – before I would finally ‘get it.’

Judging by the rates I witness tradesmen charge, I’d say, strictly from my own perspective, whether HVACR contractors realize it or not, most are in the trade for the practice. Why would I say this? I say practice because given the rates non-Flat-Raters charge would seem to indicate most HVACR contractors do not have an end-game in mind. In other words, they do not charge enough to provide themselves with a retirement plan, health insurance, paid holidays, vacation time and all the other perks that are typically handed out to employees working for someone else.

To be fair to the self-employed in HVACR, market pressures account for a lot of the reluctance by HVACR contractors to charge what they are worth.

So what is an HVACR contractor really worth, anyway? That depends directly on what that individual or company has of true value for which he can set a price, or an “offer” to which his potential customer can “accept.” The short list includes: troubleshooting and installation expertise; customer service skills; warranty and price. Of course, there are many attributes that competent HVACR tradesmen possess that are sought by consumers of HVACR goods and services. And there is definitely a goods and services spectrum that all contractors and all consumers fall somewhere upon. The trick is to figure out where we fit on that spectrum – I’ll give an example.

I prefer to create top-of-the-line systems for consumers who know they want the best they can reasonably find and have money to afford. This usually requires that my potential customer knows the difference between price and quality and the axiom, “you get what you pay for.” I’ve been in HVACR for over 30 years and have a pretty good handle on my abilities and limitations – this skills/talent assessment directs me to the source of jobs/customers that I want and can reasonably expect to get (my “target”). I am driven and challenged by providing the best work that I can realistically accomplish, without exceeding my customer’s expectations or budget. I’ve been hired by those who are seeking “museum-quality” jobs, but also do service for typical restaurants, chain motels and run-of-the-mill residential customers, even though I’ve been cautioned to avoid the 3 Rs: Residential, Retail and Restaurants. If people are willing to pay me what I feel I am worth (and need to charge), then I work for them.

So you think you already charge enough for your time and materials? Yes, perhaps you do, but what about all of your other costs? Costs like, vehicle expenses, freight, time preparing to work for your customer, permits, disposal costs and anything associated with completing a service or installation project for your customer. After all, you weren’t getting ready for your camping and fishing trip when you picked up the supplies for your job at the supply house, right? Bottom line is, “time and materials” is a hugely misleading term that can predispose an HVACR contractor into believing that is the limit of what he can charge his customer for.

Very soon (June 30th) you can download my custom-designed Sales Engineer Job Estimating System (SEJES) for free and learn about all those non-time and materials expenses associated with any HVACR job that you should be charging. You just may be shocked at what you have not been charging for, when these charges are perfectly legitimate. Did you know that you should be charging about $14 per hour just for your vehicle? That’s on top of your normal hourly rate. So if you charge $90/hour for your labor your total sell price should be at least $104/hour. I know what you may be thinking: “How can I charge $20 more per hour than my competition? I’d never get any business!” The answer goes back to self-analysis. What are you worth? Never mind trying to figure out what you are worth juxtaposed to your competition. If you really believe you are worth $104/hour, then you need to convince yourself before you can ever convince your prospect/customer.

So what if you are charging too little? The end result probably will be disastrous for you economically. You will create mounds of internal stress worrying about how to pay your bills and you may even file for bankruptcy. You may never have health benefits, vacations, uniforms, holidays, enough money to retire on and may always drive a beater van that no company wishing to project a positive and professional image would ever be caught driving. This, my fellow tradesmen, is exactly what I call working for practice. You are practicing because you really do not know if you will succeed or fail.

Working for profit includes: knowing your skill/talent set, knowing your costs and knowing what to charge. Working for profit implies that you are always in the black to the degree that your going concern is realized and that you have an end game in your sights and everything you do in business is related to the outcome you wish to reach. Working for profit entails setting your price for the value that you offer to those seeking value. Working for profit means that you are in control of your price and you do not let your competition or your customer dictate whether or not you make it to your end game. You must forgo the “tire-kickers” and low-bidders, as they will put you back in practice mode.

In order to continue forward as a for-profit organization, we all must realize the value of opportunity cost – that which we forgo in pursuit of another option. If we are bogged down on a not-so-profitable project, then we can’t possibly search for, find and execute a more profitable alternative.

So free yourself from your business shackles, excessive opportunity cost, strict control by your customers and competitors and practice syndrome and start becoming profitable. Do that self-assessment and know your costs so you can start charging for all costs associated with every job and justify them to your customer and don’t worry about your competition – know yourself, your business, your costs and your customers. Jettison those tire-kickers and nickel and dimers and you will find that you will work less and make more $$$.

Finally, become a member of this site and download SEJES, for free, after June 30th, 2011!

When I started at my 1st HVAC job (oil burner service/installation technician), in 1980, I was given $3.75 per hour. After 3-1/2 years I was making $7.50 an hour. In 1987 I was making $10 an hour. In 2002, as a Sales Engineer, I was making $25 and hour. In 2008, as a Sales Engineer, I was making the equivalent of $36 an hour. In between those year and since 2009, I’ve been an employer. Since 1988 I’ve paid my employees between $7.50 (for a recent Tech School grad, in 1992) and $17.50 an hour for a guy with 5 years of mostly A/C and Refer experience, in 2007.

The following table spells out hourly vs. annual wage rates.

[Show as slideshow]

Today, I pay myself $36 an hour (based on a 40-hour week, but the reality is I work a lot more than that!) for my contribution to my present contracting business. I have 30 years experience and I make about $75,000 a year. There are 2080 work hours for a 40-hour per week employee, and 2 of those weeks are typically vacation weeks. In reality, I work about 50 hours per week, doing everything that is required to keep my business going. $75,000 divided by 2600 hours = $28.85 per hour worked. Of course, I don’t pay myself time and a half wages for the 10 hours “overtime” that I put in every week.

I don’t know about you, but there is something wrong with my equation, at its core. For nearly 5 years I have been charging $85 per hour for my service and installation work, but that is changing with my next service call. I will be raising my rates to $100 per hour. I’ve since learned that companies in central and Seacoast New Hampshire are billing out at $95 – $125 per hour…and they are companies with technicians with as little as 3 years experience! I’ve got 10 times that.

It is reported that there are nearly 20,000 skilled tradesmen leaving the trade every year, all over the U.S. and Canada and this is due to the aging Baby Boomers, and lack of interest in and promotion of the trade.

Here are 3 links worth reading:

HealthyHeating

HVACwebConnection

Plumbing&Mechanical

Did it take reading these articles for me to realize the decline in newbies to the trade, or that I needed to capitalize on this some how? No. In 2008, I gave up seeking skilled workers and changed my business model altogether. I now only take the jobs I want, don’t have to work hard to get and will make reasonable money doing. Even with this approach I can’t save for ‘the future.’ All this to me suggests that others in my age range around 50, are figuring this out as well. They, too, are seeking an exit plan.

In a matter of days I will be uploading an Excel sheet that determines one’s break-even wage required based on their present economic lifestyle. This is what I use to calculate my base hourly need that goes into every job estimate I calculate. This worksheet is very easy to use and will be free-of-charge!

Post your comments here and/or continue the discussion on Aging HVACR Technicians Forum.

The pictures that follow, and YouTube videos 1 and 2 of this system, depict the near-complete system. Each photo has a description and, of course, the 2 videos are narrated.

As the price of a barrel of oil steadily climbs into the future, so does the cost to heat, cool and power your residential or commercial building. This article deals with how you can prepare yourself to do your part in keeping your overall costs to the absolute minimum. This is the real deal from a 30-year HVACR master technician, installer, system designer and sales engineer.

“In virtually all states, public utility commissions set electric utility rates. The basic principle of utility rate regulation is to allow a fair return on investment, taking into account costs and risk levels.” - Duke Energy. How is electricity generated? Coil, Oil, Gas, Hydroelectric, Solar Photovoltaics, Wind, Nuclear and … fill in the blank. Most power is generated from the non-green on the list. Whether you heat and cool your building with electricity or fossil fuels is immaterial – you will pay more to heat, cool, or ventilate your building, or refrigerate product inside it, as the price of a barrel of oil rises. Ironically, though, oil has always been the greatest value, meaning that you get the greatest number of BTUs per dollar spent on energy to heat your building and potable water. The reason for this is the oil lobby has the greatest influence in Washington over all other industry lobby groups. This amounts to a subsidy on oil, and is precisely why “Green” energy never really gets off the ground.

There has been so much emphasis on development of equipment for the fossil fuel industry, but proportionally very little on all other energy sources. Take gas-burning equipment for example. Since I began my career in the HVACR business some 30 years ago, gas-fired heating equipment has gone from atmospheric combustion with high carbon steel and cast iron equipment, to stainless steel and cast aluminum systems. Though these new systems are appreciably more “fuel-efficient” they lack the longevity that their relatives enjoy, many of which are still around to this day. Really, none of the new systems equate in value what the older technology has achieved, in terms of life cycle cost. This is because the more we push the envelope, the more is likely to go wrong and shorten the life of, and increase the service cost of HVACR systems. I know what you may be thinking: “But what about all the hullabaloo of tax credits for LEED certified systems and the tax credits by the IRS?” Frankly, it’s all a bunch of hype that has mostly been propagated by the construction industry trying to overcome the economic blows dealt it in the last round of man-made financial destruction to the building trades. Yes, it’s a good idea to upgrade windows and doors and improve insulation – the primary source of infiltration – but all of these products consume energy to be mined, manufactured, transported, installed and serviced. What’s more is the hard fact that when a building is “tightened up” the higher indoor air pollution levels rise. This is why indoor ventilation systems – HRVs and ERVs – have become popular over the years. HRVs run on electricity, require energy to manufacture, distribute, install and service. The moral is there is a point of diminishing returns and there is no such thing as free energy or a perpetual motion machine – there’s no free lunch!

Until lobbies for the solar industry exceed the power of the oil industry and others that promote false economic hope, there will be no end to expensive energy costs, no matter what type of fuel you use. The only limitless supply of clean energy that we have available to us is that which comes from the sun. In the opinion of one who has never installed a single solar system, our only hope of ever getting a grip on energy costs is that which accompanies the development of solar technology – to me it’s a no-brainer. Ever wonder why China is the largest solar energy developer in the world? They know what’s coming down the pike with rising energy costs due to increasingly scarce fossil fuels.

That said, until solar energy liberates our species from higher and higher energy costs, destruction to the planet, cultures and society, the best you can do is properly maintain your existing equipment, or if it’s really the end of the road for your HVACR equipment, then acquire new equipment sensibly and don’t fall for the 90% of high-tech gadgetry that will ultimately cost you more in cradle-to-grave dollars. I’ve seen enough new technology to know that most of it is a ruse as compared to the stuff we used to build as a great manufacturing nation – built to last used to be the credo in this country, now it’s built to be replaced, usually in China and other 3rd World nations.

So how can you stem the rising costs to the best of your ability? With the 3 Es:

1. Evaluation – You need a competent evaluation of the Heating, Ventilating, Air Conditioning and Refrigeration (HVACR) systems that you own. This evaluation will reveal ways that can increase efficiency and decrease fuel/electricity consumption.
2. Eradication – Once obstacles to efficiency are found, they can then be replaced with steps to maximize efficiency for the long haul.
3. Efficiency – It’s all about efficiency, but there are different paths to reach it, and they should be identified and considered.

Actually, minimizing fuel and electricity consumption has to do with one thing that you may have already noticed – efficiency. Many things affect efficiency in HVAC, which deals with the transfer of heat from one mass (primarily water, air or refrigerant) to another mass, water, air or refrigerant. When anything blocks that heat transfer, like soot, sulfur, dirt, impurities, atmosphere and other contaminants, that is when efficiency becomes reduced. Let’s see some examples.

In summation, it takes an unmistakably qualified technician, designer, installer and consultant to effectively assure that your HVACR equipment and systems are designed, installed and serviced correctly to ensure that maximum efficiency is achieved and your energy/fuel costs are at a minimum. As previously stated and not overly so, energy costs are not just related to fuel usage, but also belong to mining, manufacturing, distributing, installing, servicing and operating. It’s all about Life-Cycle costs – that’s the big picture and if you are to end up with a masterpiece, then you’ll want a true creative thinker to paint your All-around HVACR picture.

I read your email below and it is refreshing to hear that someone still believes in America, middle class and honest day’s work.  I work at Hart & Cooley but that is not why I am agreeing with you.  Some say I am old fashion, I come in to work early and leave late only because that is what I was taught growing up.  I was buying tools at Lowe’s and I too found it impossible to find some that are still made in the USA.  So I select those that are at least owned by American companies.  I have American made cars, still refuse to buy the Japanese or Asian “stuff”.

I don’t know if you are aware, Hart & Cooley has decided to pull out of China and back into North America the low end GRD’s.  We do produce product in Canada and Mexico.  Yes we were in China to survive and yes we saw people “dive to the bottom”. Did you know that the Chinese government subsidized GRD manufacturers in China with an 18% VAT tax?  What could anyone do with an 18% advantage on the competition?   We kept our North American made product but customers who were not willing to pay a fair price for the American made product, we had the Chinese made stuff to sell too.  But we have improved our processes and the Chinese Government stopped subsidizing the GRD manufacturers in China, now we can compete albeit Mexican made product.  But those products are made to our quality standards and monitored by us (in US).  We know we need to earn our customer’s business.  I am not afraid of that challenge.  We will just apply American know how to do that day in and day out.

I am not saying these things because I work at Hart & Cooley.  Yes we would like for people to buy our product.  But I write this because I find it refreshing to hear what you had to say.  I do promote made in America especially in my personal purchases.

It is great to hear someone speak up for America,

Warm Regards,

Bernard Roy

President, Hart & Cooley, Inc

From: john rocheleau [mailto:protechhvac@comcast.net]
Sent: Friday, November 26, 2010 8:11 PM
To: Clark, Dave; Basney, Kari; Customer Service Info – H&C
Subject: Can no longer find H&C products

Hello Hart & Cooley Representatives:

Having been in the HVACR trade since 1980, I am accustomed to using Hart & Cooley products that were once made in America. Recently, I have noticed that a wholesaler for duct, grilles, registers and diffusers in New Hampshire has been filling my Hart & Cooley orders with the cheapest diffusers I have ever seen, and it bothers me beyond belief that yet another vendor has joined the race to the bottom by supporting manufacturers who ship manufacturing of their products to 3rd World countries.

I recently removed a 120-year old once coal-fired gravity hot air furnace and replaced it with a high quality Thermo-Pride oil-fired furnace, but, aside from my workmanship, that is where the quality stopped. (See my article on my Blog.) The 30 gauge sheet metal that I bought from the wholesaler did not conform to metal thickness standards. 30 gauge galvanized sheet metal should be .0157″ thick, but the inferior product the wholesaler unloaded on me was only .0118″ thick. The metal was so substandard that the screws I purchased (made in China) would not penetrate the metal during assembly without denting it. Several adjustable 90 elbows separated at the joints simply while trying to screw them together. My standard cordless drill could not drive the sub-quality screws into the sub-quality metal, so I went to Big Box store to buy a cordless impact drill. Unfortunately, when I returned to the job site the Ryobi drill battery charger would not charge the loose-fitting battery, which I now need to return. This Big Box store does not sell a single cordless drill made in America – every one: Dewalt, Milwawkee, Porter Cable, Ryobi and the rest are all made in China. The floor diffusers that I unwittingly bought are of such thin material that I am confident that I can bend them in two with my bare hands.

I returned some of the things I bought to the supplier and the counter attendant was not prepared to deal with my anger and frustration. I really believe that I might be the first to vocalize my dissatisfaction to them about their newly-found product line, based on his surprise at my dissatisfaction and his lack of customer service skills.

When I say this is a race to the bottom I mean the bottom of the ladder of quality and economic sustainability. Made In The USA once meant that these home grown products were made from quality materials and highly skilled American labor, all of which used to contribute in large part to driving our economy and creating the middle class that once existed.

I have no problem with Chinese workers, per se. My problem is with the lack of quality in the products they produce for American capitalists who know fully well that the consumer of their products – end-users and tradesmen alike – today, barely has a better alternative – American manufacturing is seeming to become an oxymoron. I also have a problem with the Chinese Government subsidies of their industries, lack of environmental consideration, lack of ethical treatment of their workers and their ongoing devaluation of their currency that effectively is eroding American industrial strength and eliminating an entire way of life for millions of American workers. All this so we can buy nothing-made-in-America at Big Box stores, which as we all know, succeeded in putting millions of small businesses out of business in this country.

Substandard Chinese products have made news over the past decade, but seemingly more so recently. Here are 10 on a very long list of defective products.

1. Baby formula
2. Drywall
3. Pet Food
4. Toothpaste
5. Toy Trains
6. Car Tires
7. Fish
8. Jewelry
9. Cough Syrup
10. Baby Strollers

Now must we add sheet metal and diffusers to this list? I will stop installing sheet metal and diffusers and grilles in residential and commercial property if it is made in China. Defective and cheaply made products not only take jobs away from the American worker but also make my work substandard…and that’s where I draw the line!

These days there’s much ado about wall-hung, cast aluminum, high-efficiency, condensing, gas-fired boilers. The awareness of the technology has reached the buying public, the HVAC consumer. The majority of boiler manufacturers have added these high-tech models to their list of product offerings. It’s well known that these installation friendly, often esthetically pleasing, appliances have replaced their asbestos slathered ancestry.

Well, what about that ancestry?

Cast iron has historically been used for quality boilers, rather than steel that less quality and less efficient boilers have been made from. The thing that makes cast iron more flexible as a construction material is the fact that it is “cast” that is to mean molten gray iron can be poured into molds of indefinite shapes. The shapes of these molds allow for designs that can extract a greater amount of heat from the burned fuel than a steel boiler design can. Innumerable small finger-like projections protrude into the flue gas stream, absorbing the heat and transferring it into the boiler water on the other side of the casting.

Here is a picture of cast iron boiler sections that were made in the 1970s. Notice the fingers that catch the heat from the flue gas as it flows between the sections. (This boiler was being demolished to make way for a newer model of similar design.)

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This is the new boiler by the same manufacturer – Weil McLain. I turned the boiler around 180 degrees and moved it back to better fit the space, the existing piping and line up better with the all important chimney thimble.

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Steel boilers have steel spiral shaped baffles that insert into vertical or horizontal tubes to slow the passage of flue gas (and heat) so the steel water jacket can absorb the heat and transfer it to the unsuspecting water on the other side of the steel.

At this time I do not have a picture of a steel boiler.

While cast iron boilers of yesterday were a better value in the long run than steel, because they transferred a greater amount of heat into the water and typically lasted far longer, these designs were of single pass technology – meaning the flue gas travelled once through the boiler before exiting out the smokepipe, or flue. Terribly, for the environment and for the boiler’s owner, much heat still went up the chimney. A typical cast iron boiler design from yesteryear had a stack temperature of between 400 and 600 degrees. This means that amount of heat went up the chimney, which is to say that if you put your gas oven outside in the winter, set it for 500 degrees and opened its door the same heat loss would result.

Steel boilers were even worse! The stack temperature of a steel boiler was even higher due to its inability to efficiently restrain the heat in the flue gas long enough to put that heat into the heating system water. Instead, it would go up the chimney.

Fortunately, a Scottish mariner invented a boiler design that is known as a scotch marine boiler. These cast iron boilers force the flue gas to travel forward, then backward, then forward again before exiting out the smoke pipe. This design is also called triple pass. Buderus, a German manufacturer, has been making cast iron heaters and boilers since the early 1700s and still operate in the same foundry. Their North American headquarters is in Londonderry, New Hampshire. This company only makes hot water boiler, no steam boilers, which is what is in the above pictures.

Why would the oldest continually operating manufacturer of the finest cast iron boilers in the world not make steam boilers as well as hot water boilers? The answer is simple: there are virtually no steam heating systems in Germany, or Europe as a whole. Why? Steam heating is terribly inefficient. One must heat water to at least 212 degrees to produce steam and that is with perfectly clean boiler water. As steam boiler water becomes dirtier, and it does as a rule, the impurities make the water harder to heat to the point of steam production and require the water to be heated to as high as 230 degrees. On the other hand, hot water boilers typically heat their water to between 100 degrees and 180 degrees. Europeans have long been more energy conscientious than Americans. Americas are consumers, while Europeans think of themselves in a more conservative light, at least when it comes to fuel consumption. This is why not a single American boiler manufacturer makes a triple pass boiler, at least none that I am aware of and that are available through the suppliers in my area. Perhaps there is also a special relationship between American boiler manufacturers and the fuel industries.

This is a single pass boiler that I replaced with a triple pass boiler.

(coming soon)

This is the triple pass Buderus boiler replacement that I installed in December, 2009.

(coming soon)

Here is the Buderus boiler block with swing-out door and insulation only. Notice this boiler also has baffles – the best of both worlds for heat capture!

(coming soon)

So what about cast aluminum boilers? Now that’s a horse of a different color altogether! It was necessary to explain cast iron versus steel, so you can begin to understand why cast aluminum came about.

The Weil McLain boiler above is a single pass natural gas-fired, atmospheric-type steam boiler and is about as inefficient as a ‘modern’ boiler can be. The next boiler (with the smoke pipe rising from the top then turning horizontal) is an oil-fired, gun-type burner that fires a single-pass forced hot water boiler. This is about the least efficient cast iron hot water boiler that exists.

The (blue) Buderus forced hot water boiler is a triple pass, oil-fired with gun-type burner – about the most efficient oil-fired forced hot water boiler available today, and the only brand of oil-fired forced hot water boiler I install.

Here is what a gas-fired, sealed combustion, high efficiency forced hot water boiler looks like.

(coming soon)

This boiler (the 3rd high efficiency boiler in this house in 7-1/2 years!), a Buderus GB142/24 is so efficient – 94.5% – that it can be packaged in a plastic box. These boiler types are so light, due to the cast aluminum, which is much lighter than cast iron, that they can be mounted on a wall, virtually anywhere. This boiler is referred to as low mass and holds about a gallon of water. It is so quiet that it is barely audible when it runs. It is computer controlled, as it needs to be in order to modulate the size of the flame within. As the water returns from the heating elements – baseboard, radiant floor tubing, fan convectors, etc. – the computer monitors its temperature and raises the supply temperature going out as the return water temperature drops. It does this by increasing the size of the flame, accordingly.

Unfortunately, there are so many bells and whistles with high efficiency gas boilers (they are not compatible with oil burners, by the way) that they have a far shorter lifespan than cast iron. A cast iron boiler, when properly maintained, can outlive you and me. A cast aluminum boiler on the other hand has a relatively short life expectancy – around 15-20 years. So much efficiency is demanded of their design that their envelope is pushed to near maximum. Anything that pushes its limits tends to be short-lived. Look at Dale Earnhardt, Jim Morrison, the Space Shuttle. You get the idea.

I would guess that you would need to buy at least 3 cast aluminum boilers for every cast iron boiler. Plus, parts for a cast aluminum boiler will cost much more. While cast aluminum boilers don’t require cleaning on an annual basis like cast iron oil-fired boilers do, they still require a routine ‘check-up’. Many cast aluminum boiler owners don’t realize this, and what often happens is leaks develop and if are allowed to perpetuate can ruin parts, if not the boiler itself. Another important thing to consider with cast aluminum is it is highly susceptible to the affects of incorrect water PH. Therefore, the PH that the manufacture recommends should be adhered to, unwaveringly. Poor system water PH can ruin a cast aluminum boiler within a very short period and void the warranty.

A nice thing about cast aluminum boilers is they can generally be vented through inexpensive PVC plastic pipe, through the wall or roof. They can also be installed in a closet or out in the open, they are that compact, safe and elegant, all things being equal.

A downside with cast aluminum boilers is they are typically twice the cost of a cast iron boiler. Therefore, one needs to evaluate not only the purchase price of the boiler, but the operating cost (fuel), the service costs, the replacement cost and weigh them against its cast iron cousin. These costs are (loosely) defined as life cycle cost. The lifecycle cost of a cast aluminum boiler, I suspect, is higher than that of cast iron, but bear in mind I am using the Buderus cast iron versus the Buderus sealed combustion gas as an example.

Another very important thing to consider when deciding what type of boiler to purchase is that of serviceability. I’m talking about the available talent in your area. Not all service personnel are professional and qualified and some will not properly set up or service a sealed combustion gas-fired boiler correctly. These boilers are not plug-and-play! The manufactures instructions need to be followed to a T, otherwise, your investment will be sacrificed.

An oil-fired cast iron boiler can always be converted to any type of gas, while a cast aluminum gas-fired boiler cannot be converted to oil, and some can’t even be converted to another gas type.

So what would I buy if I needed a new boiler for my home or business? The answer depends on several factors:

1. The available fuel source
2. The available flue venting options
3. The cost of various fuels in my area
4. The application (the space needing heat)
5. The available talent in my area to install and service the boiler
6. The available space to install the boiler in
7. Perhaps, other considerations

I really like the Buderus boilers and prefer their cast iron ones. I ascribe to the KISS principal: Keep It Simple Stupid! Just like too-many-cooks-spoil-the-soup, too many bells and whistles on a boiler (like on the cast aluminum ones) make installation, service and operation failures more likely. Cast iron has my vote, all things being equal.