How Did TRC and the Industry Perform in 2018? We Share the Good News
After returning from the HARDI conference in early December, I put my feet up on the office desk, lit up my imaginary calabash pipe favored by Sherlock Holmes and allowed myself a long-needed rumination about TRC’s activities and victories this past year. Maybe it’s the holiday season, but I had my thankful hat on as the New Year approaches.
And, on a slightly more serious note, I also pondered how do we chart our future, both professionally and personally, if we don’t assess the past to add a degree of proportion moving forward?
Given the propensity of negative media news I thought it was more interesting and helpful to pen a mostly positive blog, dare I say, a realistic view of where we have been, where we are and where I suspect we might be going.
Just Do It (We did)
“I Shall Survive,” is that memorable song by Gloria Gaynor. And we did indeed survive, performing much as we were chartered to do as TRC celebrated its 20th anniversary this year. Our progress has been highly successful, though the extent of our success has created a few anticipated problems. A well-written 2011 Baltimore Sun newspaper article laid out the problem of finding and recycling mercury filled thermometers and thermostats, the latter being our bailiwick.
It noted that between 1998 and 2006, we collected 560,000 thermostats and prevented 2.5 million tons of mercury from entering the environmental stream. That 2011 article noted our efforts working with a Baltimore-area utility to boost our recycling numbers, a practice that continues working with other utilities nationwide. The update from that news story is that we’ve collected 2.4 million thermostats and kept 11 million tons of mercury out of the environment. The one sticky point of course is the cost of “end of life.” Our successes have led to a decline in our capturing and recycling mercury containing thermostats. We have been a victim of our own success, I’m proud to say, given our recent efforts and those spearheaded by previous executive directors Ric Erdheim, Mark Kohorst and Mark Tibbetts, the numbers keep sloping downward, and our costs for collection per unit continues to rise. Without being flip, the cost of success continues to rise.
The HVACR Equipment Marketplace
At the recent HARDI Conference in Austin, Texas, HARDI’s former economic forecaster, Alan Beaulieu, confirmed what many of us knew. The industry had an outstanding 2018, especially for equipment. Smart controls, of course, have gone bonkers.
Here are a few examples, courtesy of AHRI:
Year-to-date (Oct.) 2018 shipments of gas warm air furnaces increased 10.5 percent, and the oil warm air furnace side had a bump of 2.8 percent
Turning to central air conditioners and air-source heat pumps, we were up 7.2 percent. (4.6 percent up on-air conditioners only and 12.6 percent up on heat pumps only.)
While 2019 might be more challenging, it’s not hard to embrace these numbers. The important point is that none of this is speculation and it reflects a consistency across the supply chain — manufacturers, wholesalers and contractors — who are clearly running their businesses more efficiently, while meeting the public demand.
The replacement of HVACR equipment does act as a leading indicator to mercury containing thermostats. Logically, as a system is replaced, there is a high likelihood that the thermostat is replaced as well.
Why Do I Still Do This Work?
In a trenchant Wall Street Journal article, “Can India Afford to Cool Down?” a portrayal of expected growth of the energy industry fills one with rapture. The article outlines a precedent setting energy saving policy in India with the introduction of energy-efficient LED bulbs. They point out that energy consumption is “unsexy” when compared with the cool examples of solar and wind farms. But the numbers tell the tale.
“It [energy efficiency] is particularly critical in the developing world, where most of the energy growth over the next generation will take place,” according to the WSJ report. “Developing countries, which consumed less than half the world’s energy in 2000, now account for 58% of it, according to the Paris-based International Energy Agency. By 2040, they will account for 67%, the IEA projects.”
“The 900 million residential air conditioners in the world today are expected to rise to between 2.5 billion and 3.7 billion room units by 2050. If little is done to improve efficiency, air conditioning will account for 40% of global growth in energy consumed in buildings by 2050 – an amount of energy equivalent to all the electricity used today in the U.S. and Germany combined, according to the IEA.”
These are the numbers, but it is the underlying theme that contributes to these statistics which is vital and relates directly to demand. We love air conditioning because it makes life more hospitable (Would the post-World War II growth of the American South have occurred without affordable air conditioning?). And when you’re feeling comfortable, you can be happier and find the ability to concentrate on other issues that you might have. In short, you’ve eliminated a major inconvenience — some would say obstacle — of everyday life.
Tell Us What You’ve Done … Drum Roll Please
The Technology Game
There’s no escaping the constant tampering with technology to increase efficiency, reliability and accuracy. We’ve incorporated Tableau software for real-time updates on our results to help us both in our marketing efforts, goal measurement and business intelligence. We’ve established auto-emails to collection locations to provide timely contact and added real-time data on the website. We’ve provided immediate access, if you want to know the numbers.
Finally, we’ve given special attention to search engine optimization. It’s simple, if we drive up our position on the search engines, with Google as the primary target, TRC is more likely among the first choices for people searching for recycling thermostats. As I write this, Dec. 14, I typed (with Bruce Springsteen in the background) in a Google search of “recycle thermostats.” We were No. 1 on the first page. We didn’t promise No. 1 ranking, we just did it. (For SEO novices, most searchers on Google NEVER go beyond Page 2, which is why page ranking is so important.)
It’s All About (New) Marketing
You can’t lag with technology, nor can you stand still on the marketing front. Yes, marketing (and sales) drives everything else regardless of the industry. We created the “Ten Bin Club,” which publicly identifies members who have sent us at least 10 bins since they joined TRC. We’ve had 37 companies as of August, and you can find them at https://bit.ly/2ElJVk7.
For the visually oriented, we’ve created a wallpaper advertising theme that explains what we do, too. It’s the kind of retro artwork that continues to highlight the T87 mercury containing thermostat as one of the most iconic brands in the last century.
TRC issued a letter (in conjunction with ACCA) to utility stakeholders: The Importance of Collecting Mercury-Containing Thermostats while Developing, Deploying and Incentivizing Thermostat Replacement Programs. A copy of that letter is available at https://bit.ly/2QS9D6m. Our letter demonstrates our intent and commitment and offered suggestions related to future incentive practices.
We also intend and continue to strive toward a memorandum of understanding with the Environmental Protection Agency’s Smart Sectors program, which is a partnership that provides a platform to collaborate with regulated sectors and develop sensible approaches that better protect the environment and public health.
The Heart of Business
We say it hundreds of times during the year because it’s true: Relationships matter. No man or woman (or organization) is an island to themselves (to steal a line from John Donne), and we are no different. A building block of our success in recycling mercury containing thermostats certainly has been our relationships with our financial supporters but also finding unanimity on industry issues. For example, we are working with the Product Stewardship Institute and their U.S. Dept. of Agriculture grant application.
We continued as active participants with the Midwest Energy Efficiency Alliance, the Northeast Energy Efficiency Partnerships and recently the Air Conditioning Association of New England. Additionally, our seasoned government relations consultant, Tom Murray, gave a well-received presentation at Energy Star’s 2018 products partner meeting. We have also utilized offset carbon credits for thermostats at collection events.
We all know the refrain, “All politics is local.” It touches businesses too. We contributed $5,000 to the Ft. Washington business alliance where we are headquartered.
TRC also sponsored the Polar Bear International’s “Thermostat Setback Challenge.” This event, held every Feb. 27, “draws attention to the challenges polar bears face in a warming Arctic climate —and how we can help.” We use this vehicle to communicate our positioning as a consciousness nonprofit citizen to our neighbors, schools and businesses.
These activities demonstrate our engagement with a range of organizations that have disparate individual goals. Yet all of us are united in a collective effort with the goal of ensuring that our environment is safe.
Ryan’s Crystal Ball for the Future
That’s the backdrop of where we were and where we are. Given the statistics I’ve shared, I remain excited and that’s why I intend to remain in this industry (by the estimated potential energy peak in 2050, I should just about be ready to wind down my career). Here’s a simple litmus test for why one should be in our business: Who doesn’t want to be part of an industry that is thriving and growing, delivering products which are essentially desired by most?
I’ve only mentioned air conditioning, but it’s not as simple as that, either. While I’ve spent some time explaining where TRC has been and where we are, discussing future growth potential forces me to take a forward-looking view. I often defend myself about prognostications by saying I’m not a soothsayer, but I also cannot resist the challenge.
Well, for our industry, this is the 2018 TRC wrap. And a really good one at that. I love being part of this industry, and that’s why I look forward to 2019. More challenges, but more successes too. Stay with me on the journey. It will be exciting.