Ductless and Energy Efficiency Trends in 2021 (with LG Air Conditioning Technologies)


Mike Cappuccio of N.E.T.R. Inc., and Ken Kastl of LG Air Conditioning Technologies, talks about trends in ductless heating and air conditioning for 2021.

John Maher: Hi. I’m John Maher. I’m here today with Mike Cappuccio, owner of N.E.T.R. Inc., a heating and cooling company in Massachusetts. Welcome Mike.

Mike Cappuccio: Good morning, John, How are you?

John: Good, thanks. Today, also with us is Ken Kastl, Senior Regional Sales Manager at LG Air Conditioning Technologies. Welcome Ken.

Ken Kastl: Hey, good morning.

Banning Natural Gas and Using Electricity for Heating

John: Today, we’re talking about ductless and energy efficiency trends in 2021. Mike, let’s start with you. I understand that there’s been a push lately to ban natural gas, and there’s a coalition of towns in Massachusetts that are pushing electricity for the heating of homes and buildings in Massachusetts. Can you tell us a little bit about that?

Mike: Yeah, sure, John. There’s been a lot going on in the past five years, actually 5 to 10 years when we look at this, but the last five years this has really become a hot topic in Massachusetts. I actually just saw, about a week or so ago, that the governor had vetoed 17 towns and cities on the zero carbon neutral footprints of what they want to achieve in electrifying their town.

I mean, this is going to roll into heating and cooling and everything that we do, probably more so even heating than cooling right now is how we’re moving forward. I mean, I’ve just seen this evolution evolving in the past five years just with the heat smart programs we’ve been in and the solarize plus programs that we’ve been in with our towns of different towns that are joining in. The towns, they’re basically all going to the green footprints, is what they’re doing.

That’s why we’ve brought Ken on today from LG Air Conditioning Technologies to talk about this with us, because there’s a lot of things that are changing in their product line, especially. They’ve got things that are out now. There are two or three other things that are coming. I’m going to bring Ken on and have him start to talk about what his product line can bring to this coalition of what we’re trying to get accomplished, so good morning, Ken.

Ken: Hey, thanks Mike and John.

Mike: You’re welcome.

Ken: I appreciate you having me on today. There’s nothing that makes me happier to talk about than the innovative technology of greening the air and utilizing known technologies that we’ve all done so well with over the last 20 plus years of providing a super high efficiency option for air conditioning and for heating with the inverter compression, vapor compression systems, like we all have been utilizing lately.

But the bigger scheme is, the thing that we’re seeing on the horizon, it’s not just in Massachusetts, it’s federally in the United States, it’s globally, it’s in all kinds of countries in the east and the west, is to be able to strategically electrify the heating and cooling requirements for a home and business.

What the goal there is, is basically to stop burning and introducing carbon into the air by stopping burning fossil fuels as generating electricity in heating and cooking and everything else in a home and business. And LG, being an innovator as they are, they’re on the forefront of taking the technology that they’ve already refined and bringing it into new opportunities.

It’s interesting, I’ve done some other meetings in the past where we were talking about Energy Star comments and federal government comments and Sierra Club comments. I mean, anywhere from 30 to 50% of the homes, residential houses, heating hot water and cooking, that creates 50% of the generated carbon that goes into the air, up the chimney.

If we’ve already got a product line or a product innovation that can bring the reduction to hot water and cooking, electrified cooking through inverters, we’re actually saving a ton of dough to the consumer, but we’re also saving the environment and we’re allowing a greener approach.

Mike, what you and I were talking about is being able to speak to what is available today that LG’s introduced in the last year and what’s coming, because the hot water side of the equation, whether it be for domestic requirements for your home, washing, hand washing, bathing needs and things like that or generally to make hot water that would go into a traditional boiler approach where we can do this without having to go to fossil fuels. We don’t have to worry about bulk fuel deliveries from oil. We don’t have to worry about propane tanks running out. We don’t have to worry about concerns related to gas and explosive combustion devices inside the home. That’s what I’d like to talk about today.

Hot Water with Electricity

Mike: One of the things that we see, Ken, is when we go out to a home and our products that we’ve been installing for the past few years, the past 20 years, I’m going to say, they’re all good. It’s been more of an air conditioning thing, I’m going to say, over the past 15 years. But now the past five years is heating. We’re doing a lot of homes now that they require heating, and they want to heat from the air source heat pump but the topic always come up, “Well, how am I going to make my hot water? What do I do with my hot water? Do I electrify my hot water? Do I leave my oil?”

We just finished a house in Arlington that they actually left the oil boiler in to heat the hot water. As you were saying this, and I was listening to it, I’m thinking to myself, “Okay, well, where’s all the carbon going?” It’s going up the chimney to just heat the hot water. All they left was an oil boiler in there just to heat the hot water. There’s got to be new innovations that are coming up to help this because this building trend is going to this. I mean, we’re all seeing it now. Tell us what you’re doing? What’s out there? What are we looking at? Where are we going and what are we doing?

Ken: We’re taking steps to bring product into the marketplace, because we have to assure that the product that we introduce is technically capable of being installed and serviced by the professionals in the trade.

We’ve taken our initial steps. We launched last year what’s known as the Hydro Kit. The Hydro Kit is a device that works alongside of and with the mini-split type technology. Think of it this way: You’ve got a multi-zone outdoor unit that serves air conditioning, heating requirements for inside the space. You’ve got one-to-one systems or you’ve got systems out there that you guys install regularly that go up to eight zones inside of a house.

Well, think of taking one of those zones, take one of those zones out, and in place of one of those zones, or in addition to the zones that already serve the heating and cooling inside the home, we add this other device that takes that same refrigerant from the outdoors, from the compressor, and actually puts it into a heat exchanger that makes hot water. We’ve got a little box that 24 inches tall, 20 inches wide, 13 inches deep. It’s a small, compact box that takes that refrigerant. Instead of directing it into an evaporator that sits on the wall like a ductless head, it actually would take 42,000 BTUs of the outdoor capability to put it right into hot water. That’s plumped into an existing tank that’s inside the home or business to either pre-heat, or frankly, in a lot of ways, could be the sole source of the hot water requirement for the residential application.

It’s designed for residential. Yeah, we have a commercial version too that’s almost 100,000 BTUs, but this model, being 42,000 BTUs actually equates to the same amount of heat that a typical residential tank water heater requires to make the water hot.

Mike: Wow. That’s very interesting. You’re also saying we can heat the home with the hot water with this through the baseboards by putting that hot water into a tank and circulating it?

Ken: Yeah, yeah. So, again, this product, we just launched this and received a couple of really strong engineering and product innovation awards, one being our biggest industry group, which is the Air Conditioning Heating Refrigerating Institute, HRI. At the HRI show last year in 2020, we received the Innovative Product of the Year for the hot water space.

What we can do with that is not only make domestic hot water and draw for your bathing and cooking and cleaning needs, but we can actually dedicate that water or a portion of that water to actually go into the home heating system, either as a boiler pre-heated water out of a tank, so we can provide what we call lift. We can take that municipal or well water temperature, which is going to be upper 40 degrees into low 50 degrees typically in the middle of the wintertime, we can actually drive that temperature up all the way up to 120, 122 degrees over a rotation of the heat exchange, get that temperature up in a very effective way, because when we make the hot water in the summertime, for instance, we can actually provide the heat for free.

Because if you think what an air conditioning unit does, is it takes the heat out of the air, rejects it to the outside through copper tubes insides of your house and, through the coil and the fan assembly, rejects that. You walk by your air conditioning unit in summertime in the backyard, it’s hot right?

Mike: Yes.

Ken: The hotter air temperature. Well, instead of having that heat thrown outside, we’re keeping it inside the building. We’re not wasting the energy to move it outside. We’re actually putting into the hot water.

Conversely, in the winter time, we can take that free heat that’s in the air already, and that’s where we’re getting our heated air for our ductless heating systems, right?

Mike: Yes.

Ken: We can actually take that air, take 10 degrees or so of that temperature, outside air, and put it into and magnify it through the vapor system, and the compression systems actually make the hot water for home heating applications.

Mike: So, we can actually, like you’re saying, instead of putting that heat outside in the summertime, we can take that heat that we would put outside and put it into the hot water and use it to heat the water in the home to use it for the things that we need inside the home at that point in time.

Ken: Yeah, it’s really cool because one of these electrifications is free, right?

Mike: Yes.

Ken: Are we paying to make the air conditioning or are we paying to make the hot water? But, if you look at it from that perspective, one of them is free. Again, home water cost for heating home water, just the domestic hot water, but the stuff we use to bathe and clean, is up to 30% of our whole energy consumption in the home anyway. If I figure it that way, I’m going to run my air conditioner in the summertime, I can provide, theoretically, free hot water for half of the year and cut my electric bill down that much more again just by adding this component in part of the pre-design of adding a ductless system into the home.

Mike: It’s almost like when we go out and we meet with the homeowner, it’s like adding another indoor unit, but it’s not an indoor unit. It’s the box that’s going to the heat exchanger for the hot water, so we’re basically putting that on to the branch box that would go inside the home at that point. I think if we explained it more to a homeowner it’s basically another indoor unit that would require 42,000 BTUs to run off of the outdoor unit.

I wouldn’t think it would need as many BTUs in the summertime because we wouldn’t be utilizing as much of that hot water because we could probably heat it quicker. What’s your thought on that?

Ken: Oh, for sure. For sure. The heat transfer characteristics – it’s much easier to take heat from hot air temperatures than it does cold, but this system, regardless, it continues to run to well below zero. The units that you would typically connect to this, the outdoor sections, are all designed for Energy Star design, and they also all work to minus 13 degree Fahrenheit continuous operation.

Anywhere in the Greater Boston or Coastal Massachusetts area, you’re never going to see a temperature below minus 13, and, therefore, we can continue to rely on that system all year round.

Mike: I think our design temps in Boston are probably around 12 degree, I think, 10 to 12 degrees, maybe somewhere in that area. Out in the suburbs, maybe four to seven, depending on where you actually are. That’s really cool.

What Other LG Products are Coming?

What are the other options? That’s what’s available today, but what’s coming down the pike now? I mean, some things are going to be changing, obviously.

Ken: LG is so much into the electrified products. We are electronics, LG Electronics, the company. We’ve been making inverter compressors for decades now. But we’re into solar. We’re one of the largest portable tank solar manufacturers, built right here in Huntsville, Alabama.

Part of the emerging technologies group of our company is to build systems that are ecosystems inside the home. I could have a portable tank on the roof making solar, taking that free energy from the sun. I can put that into a battery storage system. You’ll see, as the consumers start seeing these battery systems being installed in basements or in homes in lieu of and in addition to, to support the energy, the electric utilities, to be able to draw from them, is basically an electric bank that could be available.

That’s the big picture, but how do we apply things into that? The next mode for us on the water heating side is we have produced and have engineered samples in the United States and ready to launch some time very soon, this summer, a water heater product which is traditional looking. It’s a tank, 58 gallon hot water tank that you would see in the traditional home. Instead of having just electric elements in it, it’s got an inverter heat pump that sits on top, if you can visualize, on top of the tank itself, and it simply wires and plumbs into the home’s electric and water systems, just like any other water heater would, but it gets to take advantage of that same inverter compressor that served us so well, that we’ve been able to fine tune to give us heat at any temperature in our trade area and our installation area.

Now we can take advantage of that variable speed component of that inverter compressor that you always talk about, Mike. We can get that and get all the benefit of that. We can put that into hot water.

Think about it. One of the issues with hot water is it takes so long to get a tank of water hot again if you’re running just a simple electric water heater. You’ve got that boiler you were talking about. It’s already churning and burning fuel, taking a lot of heat, energy and they can make that hot water fast.

Well, when I take that boiler out because we think electrified products for heating and cooling are great. Now I’ve got this water heating need and what do I do with it? Do I fulfill it with a traditional electric water heater? Everybody knows that’s the least efficient way to heat water is just to have an electric element.

Mike: Electric stripping the hot water heater. This is what we call an air source heat pump water heater, but it’s an inverter driven one, because most of the ones that I’ve seen in the market today are just a strict heat pump water heater with no inverter driven system with backup heat in it. This is a much more efficient way to heat water with an inverter driven compressor on it, where a lot of those other ones just have the on/off compressors, basically like an on/off window unit. Am I correct by saying that?

Ken: Oh yeah. Yeah, yeah. Listen, I’m a great example of what we can learn here. I purchased a house in Connecticut back seven years ago and they had an old, inefficient boiler in it. Of course, me working for the air conditioning group, I decided to disable and disconnect and remove the boiler from the home, take out all the baseboard and put the multi-zone LG inverter air source heating and cooling. It’s throughout the house. My electric bill stayed about the same. Went up a little bit, but certainly, when you take into consideration how much oil I didn’t buy during the last six years and how good that was for the environment and how decent it was for my electric bill, it was fantastic.

But what was my water heating requirement? My water heating requirement doesn’t change. I can make that house as efficient as possible, make that inverter heat pump do everything I want it to do to heat and cool the space at the lowest cost possible, but I still have as much hot water need as I ever did before, right?

Mike: Yeah.

Ken: So, I went out and purchased one of the heat pump water heaters that were available seven years ago, which is a non-variable speed from another manufacturer. There’s a few other manufacturers in the States because they are being mandated into use for the US, mandated just straight electric devices.

But, Mike, that thing threw out so much cold air in my basement in the wintertime. It threw out so much noise that I could hear it two stories up into my bedroom and the basement. It was just crazy, but it was the best way I could make hot water at the time.

We’ve taken all that stuff that we get out of the multi and mini splits and put it into the inverter variable. That means that, think about the recovery. What I’m talking about that is how quickly can I take that tank of water from municipal water temperature, 50 degrees, and get it up to the 120 that I want out of my tap.

Mike: Yeah, that’s a big difference.

Ken: I could go into the power mode, get that inverter spinning very quickly, and it’ll ramp up very fast and it’ll transfer that heat very quickly into the hot water.

Mike: And then slow down. That was one of the things that I’ve heard. People say that they put air source heat pump water heaters in their home. They’re loud, but … What we’re talking about here is with the solar, it’s going to go into a battery in your home, like a big battery bank that would be in the home. Then these devices would then run off of solar batteries that could produce the hot water from the sun, really.

Ken: On the electric side, yeah. It’s a smart system. We are marketing this around the world. We’re waiting on a little more legislation to be favorable to support this from a financial perspective because rebating is a big part of how we bring our products to market is utilizing the feds and the states to provide these rebates for us. But that’s the future.

We have this tank water heater product that’s super quiet coming out very soon. By the way, it’s really pretty, right? Around the world, LG sells products at every country in the world. Typically around the world, you would have your water heating device in your living space. It might be in a closet in your kitchen, maybe a closet that doesn’t even have a door.

If you look at an LG refrigerator with the glass door and the beautiful looking washer and dryer appliances, and aesthetics are so important. This thing is really pretty. It’s got the graphite gray color to it. It’s got digital panels on it. As part of what we do on the air conditioning side, it also has that Wi-Fi capability with the ThinQ platform, so you could literally be on vacation and say hey, I’m coming home in two days or I’m coming home early, so bring that water temperature up from 60 degrees where it typically will fall back to when it’s in vacation mode and have it ready for you when you come home, so you don’t have to rely upon it to be heating water when you’re not going to be using it.

Mike: Exactly. Who would ever think about making a hot water heater pretty? I think of a water heater that’s in my basement. I’m thinking of my own basement. Now I’ve got a 75 gallon Bradford white hot water heater in my basement that runs on natural gas, and it power vents outside, and it’s in my storage room. I look at it and it’s a big, ugly 75 gallon tank.

Taking Heat from Outside Air Directly Into the Home Water System

John: All right. So, Ken, we’ve talked about air source hot water heaters and we’ve talked about solar energy and using that with battery storage systems, etc. I know there was one other thing that you wanted to talk to us about, something that LG is coming out with. What is that?

Ken: Thanks, John. It’s so exciting. I’ve been in this industry for a long time, and to be able to see the technology come to market is just great because it was a long time, years ago, where we didn’t see a lot of innovation in the heating and HVAC heating ventilation space for the home.

But what’s happening now globally and soon to come to the United States, in fact, there’s some emerging products that are already coming into the States as we speak right now, but it’s a product that actually, unlike making comfort heating and cooling, air conditioning, it’s actually a dedicated heating device that takes the heat from the outside air, directly moves it straight into the water system in the home.

In Europe, for instance, the British government, the UK has mandated all fossil fuels to be out of homes for boiler heating. That’s what we do in New England. We use a lot of hydronic boiler homes. Well, so did the UK. Less on air conditioning, more on the hydronic heated home with the boiler.

We had to develop a product quickly that could meet that need. We’re the leading producer of this style product in the UK today. Actually, we’ve already brought some test samples for operating purposes here into the Northeast United States. We’ve got multiple systems up and running.

What it is, is the outdoor unit looks like a multi or a mini split inverter heating and cooling system, but it simply has either a direct coupled water pipe for the outdoor unit, so I don’t bring any refrigerants into the home. I’m literally using the outdoor unit as the heat exchanger. I’m taking that free air that’s always available in the outdoor temperatures no matter what temperature is it outside, and I’m converting that into a heat exchanger into a fluid and then either into a, typical in the northern markets, in the northern climates, would be heat exchanged fluid like a glycol or something like that, where we’re bringing that liquid back into the home and it goes into a tank. From that tank, it actually can be used for directly coupled to a baseboard system or if you had a fan coil system where you were actually taking that hot water, putting it into a blower so you can actually ventilate the space with it.

That’s called the Therma V in Europe. I’m not sure if LG, when we release this product to the States, if that’s what we’ll call it here, but there’s some quick searches people can do on it to see what it does. We’re making water temperatures all the way up to 165 degrees.

Mike: Wow.

Ken: That means that … Yeah, I mean, think about it, Mike.

Mike: That’s incredible. That’s all in one unit that’s going to be outside. You’d run a loop into the house to do what you need to do at that point. Basically, you’re going to run chilled water coils in the house, correct?

Ken: You could. You could. Yup.

Mike: You could do a hydro air system, ductless system. You could do a lot of different things off of this.

Ken: Yeah, it’s so modular in its approach. We have a two-part system or we have the single system. Our single system’s called a model block, and that’s the one I was talking about where we’re just circulating the glycol through the outdoor wall of your home and back into the building. Very safe. That sealed outdoor unit never actually has to be opened up, the refrigeration circuit. It’s just like your refrigerator, you never tap into that, so you don’t have to worry about refrigerant leaks and things like that.

But we also have split systems. So, depending on the application, where these are the units we actually are operating testing in people’s homes currently in Rhode Island and Massachusetts where we take that hot refrigerant gas and bring it into the home. Instead of water lines to the outside, we actually take, just like it would look like if it was a mini or multi split that we sell today for cooling, we’re bringing those refrigerant pipes into the building, but they go directly into another small box, kind of like that Hydro Kit we were talking about.

Mike: The Hydro Kit, yeah.

Ken: Kind of like that, but now it’s transferring hot refrigerant into another system that makes a booster. It’s like, in the refrigeration business, they call it cascade. You’ve got one system making a certain amount of the temperature, and then you’ve got another system that boosts it from there.

Mike: A system making the rest of it. Exactly. When you look back at this, I mean, I’m going to roll the clock back 20 years ago when I got into selling air source heat pumps. I mean, this was pretty much a unit that you would put in a sunroom or an addition and was really used for air conditioning. The heat pumps really didn’t heat that good when it was cold out. It was a system that you just put in for air conditioning, a little supplemental heat.

Boy, when you fast forward this clock to 2021 and we look at where this industry has come and the innovations of what’s happened is just … I mean, I agree with you, Ken. I mean, you think about it, a boiler and a hot water heater and a furnace; there really wasn’t a lot of things that changed in our industry for a long time. But boy, with these inverter driven systems and these products that are coming into the United States now from LG Technologies is fascinating. It’s amazing. A fancy looking hot water heater or a hot water heater that can be run off of your air source heat pump, PV batteries and solar and Wi-Fi.

It’s so good to see that people are changing the way that we do things versus how we did things forever. I think it’s going to be a lot of good changes. We get those 17 towns, and get the governor to sign off, and here in Massachusetts, I think we’re going to see a lot of changes coming up. It’s a good thing to hear. It really is.

Ken: Yeah. We all need to prepare for the future. I’m so proud and excited to work for this company now for 10 years, LG, and being an innovator. I mean, one of the things that they’ve always talked about is innovate and think about what people will need before they know they need it. Why not?

Mike: It’s a good thought process.

Ken: Why not have an aesthetically pleasing water heater tank? Why does it have to look like it did? It changes everything.

Mike: That’s all great information.

John: All right. Well, thanks again to both of you, really interesting and educational information. Ken Kastl, thank you.

Ken: Oh, you’re welcome, John.

Mike: Nice chat.

John: Mike, thanks again, and great to talk to you.

Mike: Nice chat, guys. That was so much fun. I really enjoyed it. Thank you guys. Have a great day.

John: Good. You too, Mike. For more information, visit the N.E.T.R. Inc. website at www.netrinc.com, or call 781-933-NETR. That’s 781-933-6387.

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