Heat Pumps Are Having a Moment - A Product Manager’s Take

Heat pumps are having a moment—and the terminology is getting confusing fast. Chelsea Hudson (Product Manager – Heat Pumps) joins Mary Carter and Stephen Ross to simplify what heat pumps do, when dual fuel makes sense, and what “cold climate” really means (spoiler: it depends on who’s defining it).

You’ll also hear how comfort expectations impact callbacks, why some regions are leaning into heat pumps faster than others, and how dealers can talk through system options in a way that’s clear, confident, and customer-friendly.

Interested in becoming a Trane dealer? Visit us at partners.trane.com to learn more about how you can partner with a leader in HVAC innovation. Explore opportunities to elevate your business and stay ahead in the market with Trane!

Creators and Guests

Host

Mary Carter

Mary Carter is a seasoned sales and marketing leader with over six years at Trane Technologies, currently serving as Regional Sales Manager. With a strong foundation in RHVAC, consumer finance, and strategic account management, Mary brings valuable insights and real-world experience to every conversation.

Host

Stephen Ross

Stephen Ross is a dynamic sales trainer and leadership coach with over nine years at Sandler Training. A former HVAC business owner, Stephen combines his technical knowledge with proven sales expertise, offering a unique perspective on what it takes to succeed in the RHVAC industry.

Guest

Chelsea Hudson

Chelsea Hudson is a Heat Pump Product Manager for Trane Technologies, where she leads strategy and innovation for energy-efficient outdoor solutions. With experience across variable speed systems and a strong focus on sustainability, Chelsea is passionate about shaping the future of home comfort and bringing practical, customer-driven solutions to the market.

Producer

Jessica Blair

Jessica Blair is a Senior Learning Manager at Trane Technologies' Residential HVAC unit. With 20+ years of experience in learning and development, she designs and markets blended learning programs to enhance customer learning and align with business goals.

Editor

Kerianne O'Donnell

Kerianne O'Donnell is the Digital Learning Manager at Trane Technologies and serves as the editor of the HVAC Full Blast podcast. With a background in graphic design and a strong passion for developing digital learning experiences, Kerianne brings her creative expertise to the podcast, delivering engaging and impactful content to listeners.

What is HVAC Full Blast?

HVAC Full Blast is your bi-weekly dose of HVAC business growth, powered by Trane. Hosted by Mary Carter (Trane Technologies) and Stephen Ross (Sandler), this podcast is built for residential HVAC dealers who want to scale their business, sharpen their sales, and lead with confidence.

Tune in for expert interviews, dealer success stories, and practical tips on pricing, service agreements, workforce development, and more. Whether you're in the field or in the office, HVAC Full Blast helps you stay ahead in a competitive market.

Interested in becoming a Trane Dealer? Visit our website at https://partners.trane.com/

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This podcast channel is for general informational purposes only. The views and opinions expressed in these episodes are those of the panelists and do not necessarily reflect the official policy or position of Trane Technologies. Trane Technologies makes no warranty or guarantee concerning accuracy or completeness of the content presented in this webinar.

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Today, Mary and Stephen are joined by Chelsea Hudson, product manager for heat pumps in the residential AFAC department at Trane Technologies. They break down what heat pumps actually are, why they're having a moment, and how to make sense of terms like dual fuel, straight cool and cold climate heat pumps without getting lost in the weeds.

Let's get started.

Welcome back to HVAC Full Blast. I'm Mary Carter.

I'm Stephen Ross.

And today we have a fabulous guest. I'm so excited to talk with Chelsea Hudson. Chelsea, welcome to the podcast.

Thank you.

We are excited to have you on because you, I think, are our first product manager guest, which is an honor if I do say so.

I I'm not gonna lie. I scrolled back through the other episodes, and I was like, oh, yeah. Like, hasn't been another one. I'm the one. Yeah.

You're you're the you you get the coveted spot.

So welcome. So so we have a a huge network of product managers, and they all do different things. But maybe you could just give our listeners an idea of where you sit in the product management function within our company.

Yeah. Yeah. So I guess first, we'll kinda start top down. I'm on the residential side. So I'm in the res business unit.

I literally sit in Tyler. So I'm right here at our Tyler plant.

I am the product manager for our Training American Standard heat pumps. So those are those products that are built here in Tyler. So it's really nice to sit here with our plant people with our engineers.

You know, so as people come in on tours, I get to go downstairs and talk with them.

A lot of love on the Tyler tours in Texas. Know I always love when I get a chance to go. Stephen, have you been down to Tyler recently?

I get to Tyler on a regular basis. Is pretty cool to see.

Mean, it is a massive facility.

If you don't if you're not expecting that when you get there, it'll catch you off guard for sure.

Yeah. Definitely. And if you're interested in learning more about our factory tours, definitely be reaching out to your trainer or American Standard sales representative and just be hounding them to have one of your distributor network partners put that together because that is a really fun event.

So Chelsea, you're in Tyler. You're managing the heat pump, overarching strategy and products. Maybe you could also give our listeners an idea of kind of what a product manager does. Right? Because it feels like a broad title, but I know from working alongside this team, you know, you guys get into some pretty specific areas.

I kind of think about it like a hub. Like, you're like like the hub, and you have these spokes that you're connected to all these other teams. And so, you know, if you think about the most connected that you are, of course, is to engineering and operations because, like, those are the kind of like the three that really, really tie the product together. And then kind of secondary to that, you have your sales, your marketing, you know, you have finance pricing.

And then you kind of continue going out from there where you're you know kind of get connected to your distributors. And but it really all kind of comes back to product management, and it's almost like all roads lead to product management. So you know whether you're getting voice of customer, whether you're talking about you know design changes, whether you're talking about improvements, whether you're talking about new product launches, or like you mentioned, product line strategy, product life cycle management, it all kind of comes back to this one central spot.

I'm imagining like a conductor sort of working with all the different areas.

Yeah. And sort of making making that all sing together.

That makes a lot of sense.

And now the horns. Yeah.

Yeah.

I know. Right? Well, and you know, sound equipment that lives outside of our homes. Those are two things that kind of go hand in hand. Maybe that's where I'm pulling my inspiration for this analogy.

That's right. Yeah, yeah. Very sound sensitive.

Yeah, it's important.

So heat pumps, Like, I mean, what what even is a heat pump? I thought everything was an air conditioner and for my listeners, and especially people that I work with, I know they're not all air conditioners. So don't don't **** ** up. But but but seriously, you know, heat pumps, where are we at?

So it's going to move heat inside your house or outside your house.

So that's kind of like the most simple way that you could think about it. So when you need to cool your house, it's going to operate in reverse.

So there's literally a reversing valve in there.

So in the summertime, it's going to reverse its operation and work to cool your home.

So it's not always going to be heating your home. So and then of course, that works with an indoor unit, whether that is an air handler, or a furnace. If it is a furnace, that, of course, has your air moving device, your blower to move your air throughout your house if it's working in cooling mode in the summer.

So So Mary used the term.

Mary said heat pumps are having a moment. So what do we mean by that? I mean, it's you know, I where I am in South Carolina, our market is about fifty fifty gas and AC versus heat pumps. But I've also lived in, say Denver, Colorado where almost everything was gas furnace and air conditioners. I'm currently right now in Florida with working with some dealers down here doing some training.

And in Florida, a heat pump really is an upgrade because a lot of times in at least in South Florida, it's just air conditioners and heat strips and an air handler.

So what I mean, I guess from a national standpoint because where you're sitting in Tyler, you're looking at the whole country.

Like, did heat pumps used to be a small segment, and now it's getting a lot bigger? Like, when Mary says they're having a moment, are heat pumps getting a reality TV show soon? Like, what's what you know, what's going on with the heat pump market?

Yeah. So sidebar, the wildest thing I learned, you mentioned South Florida where their AC air handler, and people say the term straight cool. It took me forever to understand what the I'm like, what the heck do you mean straight cool? And they're like, there's no heating in the system.

You know? Like, they said, there's no heat strip, you know, like, for comfort. But I'm like, oh my god. I don't understand all these different system matchup possibilities, you know, AC furnace, heat pump air handler, and then you have like the second tier, you know, heat pump furnace, AC air hand, you know.

So you have these kind of four ways you can combine these systems. So that that one is the most uncomfortable to me because in Texas, I'm like, we could never.

And it just sounds like really cool slang, like straight cool.

Yeah.

Yes, over the years, if you were to track back over the last twenty years and watch, you know, for industry, even for our company, and trend out the AC heat pump mix, because all of industry reports what they're doing, that percentage of AC versus heat pump, the heat pump portion has grown over the years.

You know, and heat pump technology itself is not a new technology, you know, this is something that's been around for decades.

You know, so heat pumps aren't this new now next thing, I think, know, but what we're saying is like, yes, they're growing in popularity, and there have been different initiatives over the years that are kind of propping them up and helping them to do so.

You know, and I think some things that have helped that along the way are, of course, the rise in variable speed technology, you know, we are able to kind of think about helping heat pump installations move further north, because they're able to operate in lower and lower ambient outdoor temperatures, and still provide heating, you know, further and further north, before you kind of reach that break over point where you need a backup or auxiliary heat option, whether that is a heat strip or moving to like using a furnace in a dual fuel application. You hear that term, which is a heat pump and a furnace installed in the house, or that could be a boiler or you know, whatever the source of heat is in that home. Over the years, it's not just that heat pumps are rising in popularity, but we've also seen the dual fuel applications rising in popularity. So it's kind of climbing together.

Can I I tell you about the first time I ever saw sold a dual fuel system?

Please.

I was brand new.

I mean, I didn't know I didn't know anything about anything, but I was a sales guy. The heating and air company that I ended up working for needed a sales guy. And they're like, I will train you as you go, which was an interesting way to learn the industry. So I go out to this house, crawl under the house. Like I said, half of our market was heat pumps, half of our market was AC and gas furnaces.

And the crawl space was extremely tight. So I'm like kind of army crawl under there. I couldn't get around to the other side to see what was going on. I didn't really know what I was looking at because I was brand new. So I'm like, this thing's a heat pump. So I get back out. I sell the homeowner a heat pump, an air handler, and then our installers get out there a couple days later and they had already torn out the air conditioner, got the heat pump outdoor unit set and ready to go.

And, when they got started on the inside, they're like, hey, dude. This is a, furnace and a coil. Like, what was your plan here? Like, we're gonna have to run, a lot more electrical for the heat strips and whatnot. So I've I totally botched it.

I didn't know what's going on. The install manager calls me up. He goes, hey, congratulations on your first dual fuel. He's like, we're gonna tie the heat pump in. We're going back with a coil and a furnace. We're not putting, we're not running new electrical for heat strips.

So, this was my first, I didn't even know what dual fuel was. I was like, yay and so, you know, we, this is two thousand eight. So, we didn't have inverters. We, the, it pretty old school technology.

So, where we are, where I was, kind of Mid Atlantic, we said, okay, the balance point, we needed an outdoor temperature sensor. So our outdoor temperature sensor would tell the the thermostat when to switch over. So our balance point way back when was about forty degrees and we would tell the homeowner, hey. Above forty degrees, you're gonna get heat pump heat.

And below forty degrees, you're gonna get gas furnace heat. But but what you're saying is, hey. The inverter technology has completely changed this.

We can heat with heat pumps efficiently way colder now. So what what what are those typical switchover points or balance points? Where do you see the heat pumps being installed?

That's a long question, but I actually was in class with a few guys a few years ago from New Brunswick, Canada. And they said most of their customers are on propane. And so it's very expensive to heat with propane. They gotta truck it in and so on. And so they're selling heat pumps all over Canada now because it can cut your propane bill down so much. So I guess where are balance points these days? Where is the heat pump market going in terms of getting colder and colder?

Yeah, so one multi point question and I'm going to say it not in a dodgy way because I'm going to give a couple of answers, but it is completely going to depend on the home, the fuel type, the customer's comfort level, the type of heat pump they have installed. So all of those things are going to play together to fine tune and get that most like optimum fine, that's a sweet spot. And the dealer is one going to be the best person, you know, the installer is going to be like the best person to find that.

But what really is going to be the best opportunity is having like the real conversation with the homeowner and it might be like a call, I hate to say the word callback, but it might be like hey, they think that twenty degrees is a good point, but the homeowners like, oh, it's a little chilly in here, like maybe I need it at twenty seven, you know? And so like, you don't really know what you know, especially if you're switching from an AC furnace to a dual fuel. And I say that because I just did that. Okay. So you know here in East Texas, I just switched from AC furnace to I have one of our multi speed seventeen's.

Not to do a plug, but I'm gonna shamelessly. So I have a multi speed seventeen with a two stage furnace and you know we just went through what is you know like a big freeze for Texas. Oh no, you know it got down into like twelve degrees.

And our switchover point is ten degrees. Wow. You know, and so one, it kind of points to the capability of that multi speed heat pump, You know it's completely able to keep up.

I'm out there videoing you know putting it on my LinkedIn. I'm like look at all this ice on my unit you know we're pumping along.

Just because I was really impressed because we don't have that opportunity much here. It's Texas.

But there was my husband, not to throw him under the bus, he's like, I hate this. It is cold. And I'm like, it's not cold. Like, you're just used to, you know, an eighty k furnace blasting heat on your face, you know, and we have a little more mellow air, but like it's still reaching set point, like there's no problem, you know, like our house is still seventy three degrees in here, like it's just a different temperature coming from the return.

You know, so it's like this, you have to factor that in, and that's real, you know, which is a benefit of stepping up to saying, you know, our variable speed like our twenty True Comfort, where you have like that enhanced comfort mode and there's, you know, some different settings there, you have a higher return temperature, you know, coming.

So, you know, there's just some different nuances there. Or maybe, you know, hey. You want it to switch at thirty degrees because you you just don't want that delta.

There's just a lot of variables there to factor in.

If there was, like, a rule of thumb where you'd say, hey. Single stage compressor, you're probably still switching at thirty five, forty degrees. The multistage gets down to, you just mentioned, ten.

You know? But if you did go with the twenty SEER, you know, may man, that thing could still crank out ninety percent of the BTUs you needed all the way down to zero or something like that. I I didn't know if there's kind of a rule of thumb.

I think that per area, I think that dealers have kind of established their own rule of thumb just because they're out there every day. Like, they know what they're seeing. They know when people are calling them back. Like, they kinda have this statistical history running in their mind.

And I think per area, they really know what their what works for their customers in their markets because they're also understanding, like, their fuel and and and what's going on in their neighborhoods.

I do think it's kind of interesting though when we talk about the sales process and how important it is to create that demonstrated understanding with the homeowner about why you're asking those questions. Right?

Just going through like the home, the fuel type, what's your comfort level? I'm not asking so that I can be sleazy and sell you something you don't like, but certain features of these units are gonna operate differently. Yeah, if you have two people in the house who, we always say, like, you run at your own internal furnace and that's gonna matter to you, then yeah, maybe you do wanna look at a variable speed unit versus a single stage. Just kinda interesting to see how the sales conversation with all the features within the heat pump can lead you to a smarter buying decision. So that's curious.

Yeah. I'm not twenty two. So my husband's like, it is freezing in here. And I'm like, dude, you could turn the fan on.

You know?

So, there's a whole dynamic in the household that that discussion should be had and that's like you said it's it's sometimes I think could be a missed opportunity you know because let's be honest, time is money and everyone's in a rush, know, the homeowners in a rush to try to get the kid to practice and it's, you know, hot or cold in their house and they're like, I don't care.

Just get my system working. Fix it.

I have a question. In lieu of a callback, I mean, if I had a communicating system and, I can log in as the dealer to the the homeowner's thermostat, can I just change that remotely for the homeowner?

Oh, that's a good question.

Potentially.

There's I will be honest because we're all friends. There are so many capabilities with our, like, digital world that I just don't know, don't fully have my arms around because there's just so much on that side of the house that I'm like, I didn't even know we could do that. That is so cool. Yeah.

So yeah. I feel like I learned something about our digital capabilities weekly. Like yeah. Five years in, I'm like, what?

Cool. Yeah.

Nice.

And that and it's so true. And and we even have some new subscription features where now you can even see longer runtime history on diagnostics reporting. And I was playing with that with a dealer recently, and it's pretty fascinating. It just kinda how detailed you can go through a system that, you know, in that example, I mean, we were seventy miles away from that house. Like, it was it was pretty interesting.

Yeah. That's a good question.

We're kind of touching on it and, like, getting into this buzzword.

But one thing that I'm hearing a lot as heat pumps are having a moment, and I'm still thinking about what reality show heat pumps would be on. So if anyone's millennial brain is still stuck on that, I'm with you. But cold climate heat pumps, if heat pumps are having a moment, then cold climate heat pumps are having a spotlight because I feel like I hear about that everywhere. And again, very similar to how you were describing heat pumps of like, well, why would I just want it to heat all the time? Okay, we've established they don't.

Why would I consider a cold climate heat pump? Like, what does that do for me? What does that even mean? Can you break that down for us?

Yeah. Yeah. So why would you even entertain a cold climate unless you live in the tundra? Yeah. I mean, hello.

Yeah.

The concept of cold climate heat pump, like, it's kind of become one of these like buzzy trendy concepts that I feel like sometimes gets thrown around because right or wrong, I don't feel like it's been adequately and precisely defined on an industry level.

And maybe that's because I'm a language nerd, and I like really, really precise clear language. And I'm like, but what does that mean? Like, can I see what that means? So you have things like energy star that has a cold climate designation. You have, and that's kind of like one way to think about it, and it's performance requirements that have minimum thresholds. And as long as you meet those minimum thresholds, then you are eligible to certify a system combination. So outdoor plus indoor, and you can certify that as an ENERGY STAR cold climate designated system combination.

And that's kind of one end of it. And then all the way at the other end is you think about the DOE cold climate challenge. And that was where the DOE came out and said, I'm going to challenge all manufacturers basically to a competition, a cold climate off.

And all of you need to build a prototype and go test it and show us what you can do. And they had these really really stringent performance requirements to say, hey, you have to meet all of this criteria, and if you can do that, then you have, you know, surpassed our cold climate challenge.

And so all of, you know, not everyone in the industry, but you know, most of us went out and said, hey, we're going to do that, we're going to participate. We put forth our prototypes that went through, know, rigorous third party testing. We all went through the same testing agency.

Not to brag, we did really well.

We had friends who you know in the industry who did really well.

And so you kind of had the kind of two ends of the spectrum.

You have incentive programs, so kind of regional incentive programs. Think about the Northeastern Energy Partnership or NEEP, who have a qualified product list, and they have their own cold climate criteria, which is entirely different than energy stars. It actually is a lower performing criteria, and that's designated as a cold climate.

And so that has spread across the north. And there are rebates in Colorado that reference the NEEP list. And so it becomes very confusing for people to say well what's a cold climate? What's a cold climate heat pump?

Interesting. I don't think so I think knew that. Yeah.

Yeah so in the absence of an industry agency kind of setting a threshold. And I think that's maybe what Energy Star tried to do, because they're kind of like that trusted level. There's like the Energy Star certification, you know.

So I think what we said was, hey, what does cold climate mean to us?

You know, because we have cold climate friendly products that meet the energy star criteria, the NEEP criteria, you know that they meet all of these criteria. But when we look at the DOE challenge or you know these other criteria to say hey, but what is really what do you need to be cold climate? Well you need low ambient performance.

You don't just need a SEER value or an HSPF value or a certain capacity ratio, you know, like maybe you need to actually operate below zero or below five or you know, below negative ten. What, Whatever that barrier is, we said, hey, you need to have some level of low ambient outdoor performance for us to be comfortable or for us to say, hey, it makes sense for us to designate that as a cold climate versus we have cold climate friendly products in our lineup that we would consider those more standard heat pumps.

So it's kind of a complex topic.

So my You know?

My assumption originally was when I first heard this term that, like, a single stage compressor is a normal heat pump, and an inverter compressor is by default a cold climate heat pump. Are there inverters that are not cold climate heat pumps?

Have that criteria?

We have inverters that are cold climate friendly that, meet the ENERGY STAR cold climate designation that are on the NEEP cold climate product list, you know, but perhaps they're not operating at negative ten, you know or certainly not negative twenty you know but have are delivering you know seventy percent or eighty percent capacity you know at five degrees. You know so it's kind of like this shifting definition of hey like can we all define it the same way and so it that's the challenge is when we're not all using the same measuring stick it becomes challenging for customers to understand product A and product B.

Yeah.

Even in our own lineup you know like train product A and train product B.

Are they how are they stacking up? You know, like, what do I offer at the table is my good, my better and my best, you know?

Or break up with that altogether. See see recent episodes. But do we have as a manufacturer our own standards as to when we go from how you might say cold climate friendly to a true cold climate offering? Okay.

So what's our what's our our preference?

Yeah, so I think when we look at our lineup, when we say, okay, like when do we shift from a standard heat pump to a cold climate heat pump?

So our threshold, like I said, really has to do with that low ambient performance.

And if we're not delivering, you know, ninety five ish plus at five degrees, so like ninety five percent capacity down at five degrees ambient.

So that's that five over forty seven capacity ratio.

So if we're at least not at five ninety five percent there, and if we're not at least operating down to negative ten, then we're saying hey it just really isn't what we would say is cold climate performance.

Interesting.

You know so we have standard heat pumps that are you know they can operate down to zero degrees and they can operate you know eighty three percent at five degrees but we're like it's just not quite there. It's just not quite enough. You know?

That makes sense to me. Right? Because to declare the cold climate moniker, you really wanna have strong performance in that ambient temperature. So eighty three percent efficiency or or operational capacity, not anything to balk at, but also not where we're gonna set the standard.

Right. And and you think about, you know, like, what what that extra little oomph buys you. You know? And really where the opportunity comes in is to say hey like what it's only a few percent it's ten percent you know like what's it really getting me? Well like what that could really get you is saying like well hey that could get you especially if you're in that kind of that middle belt of the country. Think about our friends in Oklahoma, you know, like they're interested in a cold climate, which you're like, why does someone in Oklahoma need one? Well, they're interested in a cold climate because they're able to say, well, I have a house on propane.

But I could use a cold climate, and I might really not need backup strip heat. Like I'm, you know, like I might put it there like in an emergency situation, but the odds of me ever really needing it are so low.

Like my homeowners really probably gonna be okay, And so they're able to kind of get away from that high cost of propane and just you know or they might stay on their propane and stay dual fuel and be like hey like your propane tanks probably just gonna sit there.

So you kind of have that swath of the country that's that's saying your your design temp is is really on that range that you're probably never going to see the temperature that would require backup, you know.

Yeah. Can operation.

Yeah. Yeah. Like, heat pump heated.

That's so interesting. I truly live in the buzz world part of this conversation and never really dug into this. But now it's making more sense as to why you might consider that option.

That's really interesting. I'm thinking about my own system now.

Mary and I, what we really wanted to do was have a podcast that focused on politics and religion and instead we ended up with one that delves into heating and air. But I was wondering if we could blend the two. I'll let Mary discuss religion and heat pumps but can we talk politics? I'll take politics and heat pumps.

So twenty twenty four, we were gearing up. I owned a heating and air company. We called PriceBook Plus up. We're like, hey, there's a tax credit on heat pumps.

And we didn't even have a built out dual fuel price book. We just had furnace and ACs, and then we had a heat pump and air handlers. And all of a sudden, I'm like, hey, we need dual fuel matchups in price book plus. We were promoting it.

We were selling it. And so then this year, twenty twenty six, hey. Tax credits go away. And so what do you think and this is maybe a crystal ball question that there is no surefire answer for, but it sounded like for a long time over the next ten years, electrification was gonna be a big push as a country.

We were moving away from fossil fuels.

And now we've kinda backpedaled. The tax credit's gone.

And so what do you think? I mean, I I know Trane has to project out two, three years ahead of time. Like, what are we what are the next models we're developing and where do we think demand's gonna be? And what's the train crystal ball for the future of heat pumps and maybe dual fuel?

Yeah. So what a ride.

So if you think about what our, you know, our market model, our internal models all looked like eighteen months ago, and you know, we're like sky's the limit tax credits, like we're on a projection, And the rate of AC to heat pump mix and heat pump adoption, the rate of projection looked entirely different than what it does right now.

And it's there was some VOC, some voice of customer that we went out and we talked to some of our dealer friends and said, Hey, realistically, as soon as we heard that 25C was going to be taken away for this year, We said when that goes away, are you going to revert back? Because we did see a lot of heat pump adoption because why not? Know, just two thousand dollars tax credit. And then there are even larger local state incentives in a lot of cases.

So we said, hey, give us your crystal ball reading, you know, like, yeah, it's all I guess. And so we did get mixed reviews, you know, some dealers said no, like, we're all in, like, heat pumps are the future. We're riding it out, like we see the value.

We've got our selling prop down, like pedal to the metal, we're going for it. And then we had some that were like, no, we were just along for the ride, we'll revert back, you know, some threw out some percentages. So you kind of have this mixed salad of happenings, and you're like, well, alright, we'll throw it all together and see what happens.

So I think there was a little bit of adjustment to to kind of smooth that out and say, well, it's still a big question because the feedback that we're getting is relatively inconclusive just because nobody knows.

One thing that I think is also throwing a wrench in it is if you think forward to twenty twenty eight, and you think about the furnace change that's happening, where the eighty percent furnaces are going away, And you think about what that's going to do to the market, you know, and there's all of this big question happening where we're now asking customers, okay, now predict the future in a different way. You know, if you're going to keep adopting heat pumps or even if you revert back to ACs for a little bit and and then plan out this eighty percent furnace change, do you expect your future customers to go to a ninety percent furnace or to go to an air handler?

And along with that ninety percent furnace, what are they going to do on the outside?

Yep.

You know, so obviously if they are going to move to an air handler, well there's a heat pump coming along for the ride. So there's kind of these market scenarios that I don't think we're the only ones looking at, you know. I think everybody is kind of working out their own models, trying to project.

If I think about, you know, what my goal is as the heat pump product manager, well, goal is to grow heat pumps, you know. So if I think about, you know, what are my ideas? What do I have in mind? You know, like, what are some of the innovative things that I wanna do? Of course, in my own path, I'm like, well, no, like, we're gonna continue growing and propping and and looking for great innovative ways to make heat pumps better. And, you know, what does that look like? So I think I think there's a bigger picture here if we look overall.

We can't ignore the economy as a whole. We can't ignore the bigger picture overall. You know, that there are some market models that I'm curious to see the impact it has on the AC heat pump mix just due to the inherent differences in pricing between the two choices.

Sure.

Well, it is interesting. You know, that change is a little bit down the road in the future, but obviously, big manufacturer making a lot of decisions now on how that change will impact our roadmap. But there is sort of this critical time, I would think, in the immediate near term that is, it's more important now than ever for if you have gone to heat pumps, how are you illustrating those benefits to customers so that if, that time comes with, say the furnace change, you have the good data from twenty twenty five and forward to say, hey, I know you had a lot of decisions to make, but let me show you some people who have done this and where those good realities exist.

Absolutely. And I think one thing in showing the information that should not be overlooked and should should kind of like, hey. Don't forget is, like, those customers that are bringing in solar panels to supplement. Because that's a a huge thing that I always hear is, like, oh, well, if everybody's going electrification, electrification, what about the grid? What about the grid? And I'm, like, that is a viable legitimate question.

But like I put forty six solar panels on my house, you know, so it's like those there are those people too and so you know it's like let's look holistically like don't don't just look in a silo you know like let's kind of take a step back and find other examples so you know we're not just looking for confirmation bias one way or the other, like that's kinda look at the whole pie.

One of the nice things about the tax credit, just from the dealer standpoint, a lot of times I'm looking for a slight competitive advantage. And at Sandler, we would say, sales is a slight edge game. Meaning, you don't have to be perfect. You just gotta be better than the other guy. Right? I mean, that's and so when we look at, alright, in the residential market selling Keegan Air with the tax credit, one of the things that was awesome about Trane is we just had more matchups that qualified both dual fuel, AC and furnace and so on.

And so then that means if I'm competing against a heating air contractor selling other brands, I maybe have a matchup that gets that tax credit that he doesn't have a matchup in that tonnage or in that size or in that price range or something.

Yeah.

But it's been interesting to hear dealers who jumped on that bandwagon. So there were some dealers that's similar to maybe what I did, which said, okay, we're actually gonna push dual fuel because we get such a good bump from the tax credit.

And so few of our competitors were doing that, that it gave us something unique to go out there and sell. And so part of my question to those contractors has been, hey, twenty twenty six, you still selling a lot of dual fuel? And the answer really has been actually yes. I mean, it's the the people who got used to it and and they got good at talking to homeowners about it have continued to see success. And if anything, the disappearance of the tax credit means that a few of our competitors who maybe even dabbled in dual fuel have completely dropped off.

So there are dealers in markets where they're the only ones talking about dual fuel because everybody else said, well, the tax credit went away, and and now they're not even offering it. So that's a good little slight edge, a good little distinctive advantage if you're in a AC gas furnace market to go, hey, dual fuel gives me something unique.

Do you guys track AHRI tracks obviously the number of shipments for air conditioners, number of shipments for heat pumps and so on. But do we know what percentage of those heat pumps are going into dual fuel applications versus being matched with an air handler? Or do we just guess? Or do we have any idea what that looks like?

We have we don't have perfect information, and I would love a more robust reporting ability around this.

You know, the best way you could gather this is warranty, and you think about the flaws and, you know, registered warranties, you know, the states that don't require it, you know, if there's multiple systems registered under one warranty, you know, kind of they register the outdoor on one day, and they're like, oh, man, I forgot about my indoor, you know, all the things.

And I have been spending more and more focus on this because I have a theory that the dual fuel market has grown faster than we're realizing.

And what makes me say that is I was downstairs at one of the at at LEAP, you know, last week. Was that last week?

And was talking to some of the group down there. And I was like, hey, show of hands, who's installing dual fuel? And if you are, it like, what's the percentage in your market?

And the minimum percentage was, like, ten or fifteen percent, and the max was like seventy five percent.

And if you think about the the last information that I knew of on a national aggregate, yeah that I think we were looking at, like, I don't know, five percent. So I'm like, yeah, maybe nationally, it might roll up to a really small number.

But I think they're like, there's some hotspots.

And those hotspots matter, you know.

And so I think it's growing and I wish that I had the data to like track and understand and learn more, you know, because I want to talk to those people. Wonder I want to understand, you know, like, like, like, how are you winning? Like, what's been working? Like, I don't know.

I'm I'm a data hoarder. So I'm like, I want to know all the things. So I'm like, like, what's your fuel type? Like, what what are you using?

Is it oil? Is it gas? Is it a boiler? You know? Because it's kind of all rolled together.

So yeah.

It does seem like the dual fuel position kinda scratches the itch of the homeowner who maybe, like, loves that, that furnace heat feeling, but is interested in what can a heat pump do for me? And I think that there are, especially as new technology is hitting us so fast from so many different angles of our lives. I think there are people that are like, I'm interested, but let me dip let me dip my heat pump toe in and still keep my furnace comfortability. Right? I I think there might be something psychologically there.

So one thing that came up recently, and I really am curious to see how many other states get on board. They're in oh, what were the states?

Massachusetts and Minnesota? I have to confirm.

Okay. States are starting to offer utility incentive, like reduced rates if you install a heat pump.

So one, if you have low fuel costs and you're getting a reduced electrical rate to install a heat pump, why would you not go dual fuel? Now if you have really high gas prices or if you have propane, well then yeah, you know, you're incentivized, put an air handler in, you know, obviously, no matter what you're doing, understand the balance of your, you know, fuel or electrical usage costs, of course. But yes, like it's not all in rebates like.

I, Stephen, you might not know this, but I actually prepare for these episodes ahead of time. And yeah, Colorado, Minnesota, and Massachusetts have all said that they are gonna start offering kind of utility based rebates on this. Massachusetts even put some numbers to it. Four to seven cents per kilowatt, which potentially could turn into about a fifty dollars per month savings on a bill. So that's pretty, pretty could be significant, right?

Over the course of the year.

For sure.

Yeah.

Very, very, very interesting to kinda see how how that goes. Maybe that's the religion part of heat bumps. You know, you gotta have a little faith. You gotta have a little faith in that heat pump.

Yeah. I mean We did it. Some solar panels on the roof. Yeah.

Politics, religion. We got you. So maybe as we're kind of rounding here, what, what makes you excited about heat pumps? And I think a really awkward way to ask that question would be what makes your heat pump? But what what, you know, what gets you going about heat pumps, Chelsea? What's what's kind of exciting to you in the space right now?

So my path to heat pumps was actually variable speed and inverter products.

And so I think that's kind of where my heart still is. So I think what I'm excited about is kind of in that space in that especially that multi speed space, because it really is kinda like that sweet spot. You know, like like you have that flexibility on install. You have that, you know, that twenty four volt piece. It's simple.

You have the affordability.

But then you're really kind of getting the best of both worlds on the simplicity. And then you're starting to get into some of that comfort piece of the variable speed world without crossing over into going fully variable, fully communicating high tier. You know, so you're kind of like just towing on both of those lines of the best of both.

You know, and just being able to kind of sit in the middle and say, hey, like, I don't know, just be a little bit different. You know, not like that.

Relatively new offering for us as well. Right? It would include when you think about our product lines. I know that it's been received very warmly, hate pump joke, but it's been received warmly because it is. It is just sort of like that Goldilocks of the lineup that allows you to kind of try some different sensor technology, which allows you to drive the inverter a little bit differently, but still stay with the, you know, in twenty four volt install and keep things moving in a direction that allows people to level up without, you know, maybe exceeding expectations on budget and whatnot.

Yeah. I think the other thing is, you know, and I and maybe it's I don't think it's naive. I do think that it is very that heat pumps are more future facing. I don't think that ACs will ever just go away. Like, it there are too many needs in the market. Like, there are legitimate needs in the market for air conditioners. They have their place.

But I do think that we adoption, we'll continue seeing growth, we'll continue seeing different understandings and opportunities for hey, like a heat pump will work here. Like this is a good need, this is a good space, especially where you have like shoulder season opportunity, where you can pick up efficiency, you know, in the shoulder seasons, and you can use the heat pump there instead of going to a different heat source, you know, whether that be a furnace or having to use a heat strip for you know, where you're kind of bouncing back and forth, you know, on those shoulder seasons.

And, and I don't know, I, like that aspect of it and kind of that that growth and I think I would love to see us at a fiftyfifty you know like with Mark's our our AC product manager, and so I'm like, I'm coming for you, Mark.

Yeah. Yeah. Get that inclusion right up there on our heat pump.

Yeah. Let's go.

I'm a little I'm a little competitive, so I like that.

I have a I have a personal bias to my next question. Are you ready for this? Okay. There's only there's only a few states that would care about this at all. When are we gonna see Trane drop an inverter compressor into a package heat pump?

The answer may be never. I don't know.

But just I don't know. Couple of states to really care.

I don't know that that's my tea to spill.

Oh, okay. Right.

But it could be a great tease for a future guest.

Yeah. I think that I might just, tee you up for your next guest.

Alright.

Samantha Barkley. Love. Nice. Hint. Hint.

What what are the package unit states? I mean, I know South Carolina one, Tennessee's one, Arizona's one, like, on the residential side.

We're sitting in California.

Okay.

Yeah.

I I know people here in Texas who have them, but as far as it being like a package unit state, I don't know if the volume meets that threshold. Yeah. Yeah. It's a little outside of my my comfort zone to speak on where they belong.

That's fine.

Yeah. No, but you pretty much nailed it, Stephen. I think you're pretty spot on with the big stakeholders that we real usually talk to.

Yeah. Yeah.

Yeah. Well, I am pumped. Oh, I did it. I I I can't.

One more in there.

I just can't. I can't. I Did you have a quota?

Like did you meet your your quota your pun quota for Yeah.

Last story on just why I love heat pumps so much is there's a dealer that does a contest every spring and fall with their technicians. It's a t shirt design contest. And they use it as an opportunity to design a new shirt for the season and then everyone wears it and it's really fun and gets their employees involved. They love it.

And the winner in the fall challenge was a very cute graphic of a heat pump, and it said, you make my heat pump. And I just thought that was the coolest shirt. So I just I just thought that was so sweet. And that's what the technicians are wearing when they're installing.

It's got the logos. And anyway, I think it's great. So any chance I can get to plug that culture opportunity, I do because I I thought it was genius.

I feel like I feel like I should, like, I need a link for their shop. Like, to say, like, I I'll support.

I know. I agree. I know. That would be so good. Well, I, learned a ton. Obviously, you know, whether you're dual fuel or straight cool, like, there's a lot of product options that we have for you. And clearly, gotta queue up some more product managers because we have a lot to learn in this space.

But, Chelsea, thank you so much.

I like, I'm telling y'all, I have been looking forward to this.

Like, I didn't hardly tell anybody because I didn't wanna jinx it. Like, I and then, Stephen, I saw you at LEAP, and I was like, oh my gosh. I I should I go say something to him? Like, I was, like, a little bit starstruck. Like What? Stephen and Ron?

Look I've got lots of straight friends and now I know I've got a few dual fuel friends too so it's good to know both of you are in the same camp that I'm in so there we go.

That was so epic. Well, if you have any questions for Chelsea, wanna learn more about our product offerings, or have a product question in general, please feel free to email us at h b a c underscore full underscore blast at train technologies dot com. We are eagerly awaiting your questions there. And Chelsea, last time, I just wanna thank you so much for coming on. We really appreciate you.

You so much for having me.

Have a great day.