In this podcast, Brett Rogenski, General Manager of NETR, Inc talks with Seth St. Romaine from LG Electronics. They talk about the importance of customer satisfaction with heating and cooling equipment. They explain some of LG’s equipment, and they discuss upcoming heating and cooling tech trends for 2023.
John Maher: Hi, I am John Maher. I’m here today with Brett Rogenski, General Manager of N.E.T.R. Welcome, Brett.
Brett Rogenski: Hey, thanks a lot for having me, John.
John: Sure. And our special guest today is Seth St. Romaine, Senior Account Manager for New England with LG Electronics US. Welcome, Seth.
Seth: Hey, thank you. Thanks for having me.
John: Yeah. So Seth, how did you get into this industry and eventually come to work for LG?
Seth: It’s a long story, but we got time. So it goes back, I’ve been in the industry now for over 30 years, so I kind of started going to college as a youngster out of high school and then working through that. And then I took up a small job at the time and started as a truck driver for a wholesaler. And from there, 25 years later, I became a Sales Account Manager for that particular region of Cape Cod on the islands for Robinson Supply.
So I took every little bit of level from truck driver to manager to showroom to plumbing. I kind of learned everything in the past 25 years from plumbing, to understanding that all the way through radiant systems, boilers, hydraulic and HVAC. And along the way, I sold a lot of different products to kind of familiarize myself more with the market.
So seven years ago, I started working for a manufacturer’s rep and sold boilers as well as HVAC products. And now with LG for a year now, and the reason everybody asks me why did I move from where I was selling another top selling ductless brand to LG is two things. One, I sold it when I worked for the wholesaler 20 years ago, and I was familiar with it. And I think LG is bringing very innovative on their product line currently going forward. And I wasn’t seeing where the other brand was kind of aligning themselves in the heat pump market. So today I’m glad where I am. I think we’re in a wonderful industry. It’s a growing industry and it keeps growing every year. It’s a good place to be.
John: Right. So what’s your current focus at LG and what are some of the things that you’re working on trying to accomplish?
Seth: Things that I want to work on for 2023 and everybody has goals. And I guess the big goal for me is to realign our dealer network and get them more up to speed with our training, with our products, and with our applications that we may fall in line with. I think COVID kind of, unfortunately, it hurt us a lot in the past two years with not being able to … The HVAC facing market is definitely an in-face application where you need to be with the contractors and you need to be with them on a job site or you got to be with them.
And when COVID came along, we weren’t able to do that. And in the training aspect, all of our training closed down. So LG has a large training center in New Jersey and California, Texas, all across the country and everything closed down. So just recently as of two or three months ago, we’ve opened it back up to a virtual training again. So that’s my goal, LG will be having a new training center right out here on 495 by the third quarter of 2023. So that’ll be really beneficial for us helping everybody, including myself.
John: So that training standard is going to be to help companies like N.E.T.R. that Brett is the General Manager of, and help them to understand the product lineup that you have at LG and is it also how to use the products, how to install them, how to maintain them, and all of that kind of thing?
Seth: So that will be really helping the New England market because before we had to send people to New Jersey for trainings or anything like that. Now we’ll have it right here in our backyard. It’ll be a fully operational facility, that’ll be a welcome center. We can do trainings there, we can do functions there, we can do all kinds of things there. That’s a big focus that we’re looking forward to for 2023.
John: And again, looking toward 2023, what are some of the current trends in the industry that customers should be aware of?
Seth: I think a lot of people come up with ideas as to maybe how a system should be designed for a house. And I don’t know, I guess one trend is to avoid systems that don’t improve your comfort. So we’re now in a market where it’s about comfort and selling. Comfort is what it’s all about. If people are going to spend a lot of money on a system, and I mean, it’s a big investment and some people I feel… look at that in a Massachusetts, we’re very lucky, we have a $10,000 rebate and everybody sees that and they’re immediately focus on that.
And they sometimes are looking at that and not maybe looking down the road and considering what’s the comfort of this going to give me down the road? And so it comes down to a lot of expectations, I guess. Make sure you get what you want and the trends out there right now, people are trying to do things quick and I think the applications need to be thought through and have the best system for the home.
John: Right. Brett, how does N.E.T.R. approach that in terms of just selling the most amount of indoor and outdoor units as you can to a customer or something like that as opposed to really being focused on the customer’s comfort? And how does that word comfort play into the way that you guys approach the way that you work with customers?
Brett: Sure. That’s a great question. And Seth brings up an outstanding point in comfort because that’s really what it’s about. As he said, it’s an investment to begin with, but ultimately you’re going to live with this thing in your home and with your family for, we hope you’re living with it for 20 years or more and successfully doing so.
It’s long after the investment is forgotten, the comfort is either still there or not. And you bring up a great point. So the way N.E.T.R.’s sales team is built and the way we go about designing systems, it’s about proper sizing of systems. And that’s not just how many BTUs in or out of a home, it’s even room by room. So if you put the wrong size unit for our listeners, if you put the wrong size unit in a room too big or too small, the comfort won’t be there. That room will either A, never fully cool, or B, get too cool and you can’t slow it down so to say or too warm or not warm enough.
One of the great things about ductless applications about heat pumps is that you can have individual comfort in individual spaces. Most of us are used to a standard furnace or boiler, maybe two zones. If you live in a colonial, downstairs is one zone. Guess what? The downstairs is all one temperature. The upstairs is one zone, the upstairs is all one temperature. One of the great benefits of ductless and heat pumps is that each individual, I mean, you could break it down as much as you wanted, but reasonably, hey, each individual bedroom and maybe the living room and then maybe the family room are all individual zones that can have individual temperatures.
If mom likes it really cool in the bedroom, it can be cool in the bedroom. If grandma’s down in the living room and it needs to be 10 degrees warmer, it’ll be 10 degrees warmer. So Seth brings up a great point about the comfort and our approach is that we treat each individual home and each individual space as a unique entity. We do load calculations for all of them, and we really focus on providing the consumer the best solution for their home. Now, that’s also best for us, because we could go sell you something if you hate living with it thereafter, you’re not going to refer us to people, you’re not going to ever do business with us again. And we’re in this for the long haul. We’re 33 years in so far, we’re not going anywhere.
John: And like you said, it’s a unique solution for every customer. I know I was talking with one of your customers recently who had another company come in and kind of size up the house and said, “Oh yeah, you’ve got these three rooms downstairs, we’ll put an indoor unit in each one of those and then you have three bedrooms upstairs, we’ll put an indoor unit in each one of those, it’s going to be X number of dollars or something like that.
And then he ended up getting a quote from N.E.T.R. and you guys came in and said, “Yeah, you know what, if you want to save some money, maybe you won’t have exactly the temperature control in every room upstairs. But what we can do is put in an air handler into the attic and then do ducted just little ceiling units on each one of the bedrooms on the second floor so that just this one air handler unit in the attic could just handle all three of the bedrooms on the upstairs and save you a little bit of money where you don’t have to have a wall unit on every wall of every bedroom upstairs.” And he really appreciated that you guys came in and made that custom solution for him. So is that sort of what you mean when you say that you’re looking at it on a case-by-case basis and a customer-by-customer basis in terms of figuring out what’s best for them?
Brett: Absolutely. That’s exactly what I mean by that is that, yeah, we’re trying to design the right solution for that customer. And you bring up a good point as well. It’s about comfort first and foremost, but also there’s also aesthetics. Someone has a nice home and for some reason maybe they don’t want a wall unit in that particular room. And I can understand why and that’s fine.
There’s an application for each thing. LG has some innovative stuff as well. So we do like to work with air handlers if there’s existing ductless work, because a lot of times when we leave the place looks no different than when we arrived, except for it’s working much more efficiently. Ceiling cassettes, a lot of companies avoid them because they’re hard to put in the right application. We like doing those for customers because they give a nice aesthetic in certain places. And LG, for instance, has a really nice product called the Art Cool. Which is pretty unique in the market. Do you want to tell people what that is at all, Seth?
Seth: Yeah, sure. So that’s actually, that’s been out for a long time or not. So I used to sell those a long time ago and they are definitely innovative because they’re unique in the picture units. They’re like 39 by 39 inches, so it’s almost like a square that’s going to go on the wall. And a lot of people don’t understand when they look at it applied that that’s actually a heating and cooling unit.
And they’re really cool, but you can change the picture on it and you can put any picture you want in that place and it becomes actually a central point. So it becomes more or less, sometimes people talk about it where in our HVAC world, not many people talk about our system because they’re usually in the basement or outside and it’s not really anything exciting. So I feel we actually have some exciting products to talk about.
Brett: It reminds me a little bit of, I think it’s Samsung has that television called The Frame. And it reminds me a little bit of that is that it’s designed to blend in and offer the solution with a different aesthetic, which it’s not necessarily for every application, but it’s nice to have the option when the application is correct.
Seth: Exactly. And I feel that really strong is its options. Right?
Seth: And our brain may not fit in every application and I get it. And like you said about the ceiling units in some people spaces and having the options for every job is I think pretty important to fit in, especially in our market in New England because not everybody can understand necessarily how the ductless system works. And expectations from a homeowner is important to me because we actually do now, and I’m sure you guys have already taken it, is the heat pump classes. So we’re doing these now for MassSave which is now requiring all dealers to be taking the heat pump class for 2023. And so we’ve started doing them at the beginning of the year and for New York, we actually started it last year. And so that program was adopted through MassSave. New York has it so only one person in the company has to take the class and Massachusetts now is adopted to everybody, all principal and primary installers have to take the class, which I think is great.
Because it applies to all. So by having one person in a company, I’m not talking it down, but one person in that company may not be going to a job to install or not doing the service call that is going to recommend the proper install for a system. And understanding undersizing, like you said before, or oversizing is very critical and this class maybe taught 50 people last week. I have 50 people more tomorrow night. So it’s all of them come in there with just thinking I know it all. And every class I’ve done, they have all agreed, they’ve learned something out of it, they’ve all taken something out of it. And I think it’s important.
So I’m all for it and I don’t care what brand it is. I think it’s important that everybody understands when we update a house, what’s changed, insulation, windows, all these factors in a house and the efficiency and to properly design a load the house to know what it needs for heat, like you said, bringing down the load or we’re looking in the New England market, we have to base on heat application, so we’re looking to figure out how much heat a space is going to need in a room and sometimes cooling is going to fall in second, but it’s important that you’re going to have enough heat to use and get the efficiency out the system to properly heat the space. And I think it’s important as people, a lot of jobs unfortunately were called out on is because it’s oversized or it’s undersized.
Brett: Yeah. We see that too as a contractor where someone’s unhappy. They did work with two guys in a truck and now they’re having issues and obviously that person’s not returning their phone calls so they eventually reach out to us or they may be directed to us through a distribution partner or a manufacturer. And unfortunately, sometimes we have to break the bad news to them about what the situation is.
And a lot of times people, a layperson might think when they’re looking at a system and how many BTUs do I want for output on this? Well, more must be better. And it’s really not, especially when you’ve moved to inverters and these systems because it’s killing your efficiency, your costs will go up and yeah, we don’t like to see that. So again, we want happy customers, we put a lot of time into sizing correctly and applying correctly.
And then we even have, our sales team is highly trained, they do a great job with that before virtually every install, unless it’s a tremendously simple install, we also have a field installation supervisor visit the home and walk it and verify it with the homeowner. And it’s really a double check. Number one, we’re making sure that we’re all on the same page and so that when we get there to install, it’s going to go quickly and smoothly for the customer. That’s the big reason. But the second thing is those are highly experienced field leaders and if they may recognize something that unfortunately was missed and now we can correct this long before we’re there to do the work, we can make an adjustment.
Seth: And that’s actually really great to hear that because I go to a lot of jobs and unfortunately, the expectations, like I said before, and the homeowner now doesn’t understand how to even use the controller and doesn’t understand how to use a wall remote. And you guys going through that and before you leave as a check sheet, I think is critical because as we talk about heat pumps, it’s a big part of the industry and now we have to rely on the properly done installs.
Otherwise, what happens? All the bad news go back to the old days of heat pumps, right? You go back 15 years of heat pumps and people put them in and they swore at them because they never worked. The efficiency didn’t work and they didn’t actually get enough heat out of them. So I think it’s important now with the changes that we have in place to have all the proper installation people doing it right.
Brett: I agree. And you’re right about the training. You can do a wonderful job on an installation if the end user doesn’t know how to use it, that’s something we pride ourselves on. We get a lot of positive reviews about that. The other thing that we’ve done is we actually made, we have our own YouTube channel and we’ve done a couple of short videos that show how you use certain remotes. And that way-
Seth: It’s a great idea.
Brett: I can help someone in Peoria, Illinois. It doesn’t just have to be my customer. But also if we have someone who’s like, “Geez, I haven’t done that in a long time, how do I do that?” Even if they reach out to us, we’ll coach them through them. But a lot of times we’ll then email them a link to here’s your particular controller and the functions. Or they just Google it and they find it on their own and solve their own problem, which we love to help them. But more importantly, we just want them to be happy.
Seth: And that’s what it comes down to is having a happy customer. What we always hear is when a customer is unhappy. Right? You always want to hear the good things and you always have some pride for those good comments, but unfortunately, we always hear more about the bad than the good.
Brett: Yeah. Sure.
John: Seth, how does a customer know that an installer that they’re looking at has gone through this training with LG and that they’ve been certified, if you will, to install LG products?
Seth: Yeah, that’s a great question. So we actually have our pro dealer network and the dealer network means that they’ve had to take certain classes in order to achieve these accomplishments as well as registrations. So as they’re doing more installations, their tier level would go up and then put them into different levels. And that to me is helpful because to be a pro dealer and only do one install isn’t really what I want.
I want to be able to have people on a higher level, gold and platinum dealers that are doing tons of installs and those are the ones that I want to work with more in that respect to make sure that they’re getting the proper feedback for installations and training because the other ones that are doing the majority of the installs and I just want to make sure they’re being done. So we have happy solutions being done in the heat pump market.
John: The inflation reduction act is coming into effect in 2023 and it has a certain effects and is going to be maybe offering some government sort of subsidies or discounts on heating and cooling products and things like that. How do you see the inflation reduction act affecting the heating and cooling industry both for companies like N.E.T.R. and for consumers ultimately?
Seth: It’ll help in many ways. I think it’s a step in the right direction to get people an added incentive and looking at it, the cards haven’t cleared yet. We have a lot of our energy consultants we deal with directly at LG and we are always looking across the country and we’re always looking at our particular practices in line with those. And that particular rebate is a little bit challenging just because of the logistics of the paperwork and everything and the application. And the thing is, some people are confused by it, they think it fits on every application for every single person. It’s not.
So it’s based on the household incomes. So there’s a couple things you just got to make sure you understand it more if you’re looking for that application. But a lot of our products will fit into that alignment, which is great. And I think beyond the heat pump side of it helps with other things like wiring, insulation and those are the things that have been kind of overlooked because in some of the jobs, somebody has a really old electrical panel in there and now we’re talking thousands of dollars to change and upgrade that system.
And now there’s something we can add on that rebate side to help somebody get the proper system and again, a more efficient electrical system in place. So there’s a lot of aspects to it, not just in the heat pump that I think is going to be beneficial for a lot of people.
John: Right. But Brett, what’s your current recommendation for consumers looking to save some money and while getting their ductless system installed?
Brett: Sure. Well, I think Seth nailed it when he said that there’s a lot that’s still unclear on this. And here, we sit in December of 2022 with this really going to into effect with 2023 and the research that we’ve done kind of says, again, there’s no hard and fast line. I really wouldn’t expect the infrastructure for people to even be able to apply for rebates to be in effect until halfway through next year.
And then there’s going to be an entire process beyond that. And I would tell people this, and we’ve done some math around this, I won’t bore anyone, but the other thing that’s coming with 2023 is price increases from manufacturers. And guess what? We’ve all seen prices. We all go to the grocery store every week and prices are on the increase. Well, there’s some regulatory efficiency items that are driving the cost of HVAC up.
Shipping costs are up because fuel costs are up, et cetera. Labor costs are up because all of us are spending more money at the grocery store. So therefore we all need to earn a little more at work eventually. So the industry is expecting cost increases in 2023 of probably up to about 20% seems to be the consensus. So our thing to people is don’t wait because the money, you will lose money if you decide, “I’m going to wait until July or August to do this, you’re going to lose a lot of that rebate money to the cost of inflation.” So that $20,000 system is now going to be $24,000 for the identical system. Also, you’re losing efficiency in the meantime. So if you’re currently heating with fuel oil at, call it $6 a gallon, depending on when someone’s listening to this versus what they could save using a heat pump through greater efficiency.
So you’re losing money staying with you riding the old horse, so to say. In the meantime, inflation’s eating away at that. And we’ve kind of found that most people, if they wait, they’re really not going to save anything. All they’re doing is they’re going to be six or eight months older when they do this and their total out of pocket isn’t going to be any better. So certainly everyone makes their own choices. And the other thing Seth brings up too is, and it is a bit overlooked in there, the heat pumps gather a lot of the interest in the market, but especially here in New England, we’re older communities, we’re well established. There’s a lot of homes that will need electrical upgrades. So depending on the other items in their house, it’s very common to find a hundred amp service still throughout New England that may get you by now you go and add a heat pump big enough to heat and cool your entire home.
It may, but there’s a really good chance it won’t. So you’re going to need to upgrade to 200 amp, which there’s a lot of great benefits to upgrading to a 200 amp service to begin with, but that’s an extra cost caution. Right? There are dollars that are available there. The other part is some of this is tax credits and this is why you don’t want to wait as well. Those tax credits are there for you to have on your taxes. So there’s rebate dollars and there’s tax credits waiting on the rebate dollars. Doesn’t seem to make a lot of sense when you do this in 2023, guess what, you’re going to be able to claim the tax credits however on your taxes in-
Seth: In ’24.
Brett: Yeah. When you file them in ’24.
Seth: So some people are looking to claim that and some … We’ve already gotten a lot of questions as well. And we’re kind of waiting to see where all of it’s going to come together and then look at it a little more clearly. But like you said though, some of the changes in our energy requirements for Department of Energy Star, so all manufacturers for 2023 had to have all the equipment re-listed for energy levels and that’s an added cost and if people don’t realize that all these little added pieces into it, it’s a lot of work. So MassSave, we are constantly with Mass Save and ICF and Maine has a lot of programs as well.
Brett: Yes, they do.
Seth: And all through New England is my territory. So I’m really involved in a lot of rebate programs out there and I think it’s great that this is another added piece to it to help people understand it. But some people expect tremendous savings. People ask you, how much money am I going to save on the system? And it really comes down to comfort, like we said before, but it’s a year round system, right? So the question you said before is the electrical panel, let’s just say you’ve had an AC system now and it takes, let’s just say a 30 amp breaker, 40 amp breaker. Now by putting in an inverter heat pump system, you may very well only need a 30 amp breaker. So you can probably get away with some of it.
It’s the added pieces to it that you might need a little more power to get that power efficient. But people look at that and they want to see dollars saved and I’m not going to lie, and I tell people within our class, they’re always like, “Well, we put solar in a house.” Well, if you put solar in a house, to me, that’s what I did. I put solar in my house, then I will be moving over to a heat pump system. And I’ve had many comments and contractors say, “Well, what are you going to do when the snow comes? Or what are you going to do when the wind breaks down the windmills and all that?” It all comes down to, in my opinion, it’s a year round solution because if you have an old AC system in there, and I’ll say, let’s just say it’s an old 10 SEER, 12 SEER, 13 SEER, as our climate changes and the warmness changes, they call it bin data. So in the class that we do, we talk about bin data. So you look at the temperatures, our average temperatures in our region and they’re actually going up. So it’s weird.
So you think, “Well, Boston when we do a manual J calculation system to properly size the system for a house and we base it on temperature outside and how many days it is at that temperature.” And that’s the bin data, but the bin data’s actually gone up and people don’t look at it from that perspective and we’re actually getting warmer. So being more efficient on the cooling side can be actually more beneficial in many ways because we’re heating less days. Our heating days have actually gotten less. So we talk about it and people are shocked to see in the Boston region, the bin data that shows us at zero degrees is hours per year. Not days, hours. So it makes a big difference if people start looking at it and reversing it to say, “Well, now we’re going to have a 20 SEER AC system, so now we’re going to save more energy than we’re running it longer sometimes in the AC.” Look at this past summer with record heats, right?
Seth: So we’re doing year round comfort solutions now.
Brett: You bring up a great point with the bin data and the hours per year, and I haven’t be honest, I haven’t looked at it a little bit, but the last time I had looked, which just might be a couple of years old, the number of hours per year in Boston below zero, I want to say it was like 60 for a whole year.
And where does that come? That comes in a little two hour increments from three to 5:00 AM on January 10th and it’s very rarely there. And then that’s the other misconception that still is out there about heat pumps. And I think it goes back to the old days, coal climate heat pumps are extremely robust and they can provide all that heat for your home well down to certainly negative 13 Fahrenheit is what we’re all kind of certified to. But the reality is you’re probably in a really good shape even past that, especially here. We think of ourselves as rugged New Englanders, I guess we are, but it’s not as cold as we think. It’s not Nome, Alaska.
Seth: That’s true and that’s where a lot of the people’s misconception is. Well, when it’s cold, I want to make sure I’m warm. Well, absolutely. I want to make sure you’re warm and there’s different options for different systems. But I think that’s important data that I think a lot of people have to start looking at more.
Brett: I think it’s also, as we talk about it, something as we think about heat pumps, you’re getting two solutions in one. A standard, again back to our fictional New England colonial kind of standard system with maybe baseboard hot water heat because we see a lot of that and maybe a central air conditioning system, very traditional solutions.
So you have a boiler in your basement, all the apparatus that goes with it. And that’s one system. You have a central AC system with ductwork, there’s another solution. You must maintain each. The truth of the matter is they both have a lifespan, they will eventually fail just like any mechanical item does.
The great news with moving to a heat pump solution is you’re solving both of those equations with one thing. So you’re now moving to one mechanical equation to serve your whole house, or at least one solution, maybe not just one heat pump. You may have more than one-
Seth: You could add into our air quality on top of it.
Seth: And now that’s been an overlooked thing that for years that’s always been a billion dollar market that still kind of sits there. It doesn’t really move where we probably need it to move for proper air quality, especially tight houses now.
Brett: Well, I was just going to say, the more insulated the newer homes are. They’re very tight and there’s a lot of information now coming out in the last few years. And interestingly, COVID kind of drove some of that forward while we were all bunkered down at home for a couple of years.
All of a sudden now they’re finding that just having, for instance, gas in your home, there’s a lot of byproduct that’s going on in your home. Whereas in the past, none of us really thought about it. No one spent a lot of time measuring it. So you’re right, you’re able to improve air quality as well and have one solution that serves both masters if you will, heating and cooling.
Seth: That’s the big thing is people will say, well, I love the calls that will comment. And they’ll say, “Well, I spent so much dollars on my electric bill, my electric bill went up.” And then we asked the question, “Well, what were you heating with before?” “Well, I had oil.” “Well, how much was your oil bill?” “Well, I didn’t get an oil bill.”
Brett: Zero. Yeah.
Seth: And you just have to look at the whole picture of the expense level for heating and then also apply it to cooling. So as we increase our efficiencies in our cooling market, we’re probably going to be more beneficial on both sides. So I think it’s great.
Brett: One thing that people tend to forget about as well is that in virtually every state, and certainly in Mass and I happen to live in New Hampshire, we can’t choose where our electrical provider is because we can’t have 52 sets of wires running outside.
But about half, probably at least half of your cost is the actual cost of energy. So you can select an alternative energy provider if you want. I recently did that and my rate is about to change where I live and I’m going from… I would’ve been paying 26 or seven cents per kilowatt hour. I selected a different provider and I’m going to be paying 18 cents per kilowatt hour for electricity coming into my house through the same line.
So when people look at heat pumps and stuff, you are right. You have to look at the whole cost. But there’s also other things you can do to help control those electrical costs as well because you’re right, they’re going to go up and what’s it offset by, the fuel oil.
John: Yeah. Seth, are you aware of how America compares to other countries in terms of saturation of people using heat pumps in their home, heat and cool their homes? And is that starting to change in the United States and where do you see that going moving forward?
Seth: Well, LG is a global provider and we are all over. And I mean, the market that we’re in here, it’s funny. So we want all these special things here in the US and everywhere else is, well, we don’t need that over there. And we deal with Korea and they’re very accommodating to us, I got to say, to make something work in our specific applications and make any kind of accommodations for controls or whatever we need.
But overall, I think we’re catching up. But we have some products overseas that we just aren’t allowed here in the United States and new products coming out for us. We have air to water systems. So like Brett, you mentioned before, a boiler system, right? And now we’re going to have … we already have it overseas. We’ve had it for years and the challenge will be because of the new refrigeration that’s coming out in 2025.
So we’re trying to adopt and make that transition change, but an air to water system with a high temp. So we already have them now here in a low temp and a mid temp. So meaning you can run a radiant system with a heat pump and then it’ll switch over and give you a cooling as well. And now we have a mid temp we’ve had this year, and then next year we’re going to have our high temp, which will be 176 degrees. So to me that’s exciting stuff because in New Hampshire and such in applications where people just still feel like they want to have a water source for heating, it’s a great application.
And so there’s again, a lot of options for jobs and overseas, they use tons of it because of the price of oil and the price of propane that they’ve used is for radiant systems. Now on a lower temp overseas is tons of radiant heating, which is an awesome heat source. It’s not a cheap heat source. But now having a heat pump doing it and somebody has a lot of solar panels on the house, now they have a lot of solar applications in there. So that would then in turn you’re generating free heat. So it’s pretty cool.
Brett: That it’s exciting. Yeah.
Seth: Yeah. But we’re catching up though, for sure.
John: And do you see in general that people in the United States are starting to come around to the idea of heating their whole house with heat pump systems?
Seth: I think it’s coming down to the carbon footprint. Everybody wants to help somewhere somehow with what we’re doing in our society. And I think more and more people are starting to look at to say, I’m willing to spend a little more money now and down the road feel that we are gaining in our efficiency footprint and we’re not having so much of our fossil fuel usage and then we’re not dependent on other countries all the time.
So if we can provide our own electric source however we need to do it, then we can do that efficiently then now we’re not relying on other sources and running fossil fuel. So I would say that most people are excited and understand more of the philosophy behind a heat pump system being electric and how it’s providing that.
John: Where are LG HVAC products manufactured?
Seth: We are primarily manufactured out of Korea. Some of our resources now have gone to Taiwan and our engineering and suppliers, we have to rely on some outsourcing of some products like everybody does. But the majority of our products are elevated in Korea and they’re very proud of that and they try to have everything sourced internally. LG started as a controls company. It’s not a new company. They’ve made so many different products over the past 50 years that it’s just innovative products as they adopt new pieces. This year we have, it hasn’t been really announced solidly, but we have heat pump water heaters. So that’ll be the new launch for 2023.
John: I actually saw that the other day. Yeah.
Seth: LG is … they really do care about how it looks and functions. And so that water heater, if you haven’t seen one yet, I got to tell you, it’s pretty cool looking. So it has a European flair and you’re to sell a lot of those because it almost looks like something that you’d put right next to your fridge. It’s got a beautiful cabinet to it and it’s the first inverter heat pump water heater.
So efficiency-wise, it can give you a higher efficiency and it’ll actually run and give you a higher output for that water level. But things like that, LG is always looking into the LG for me, we’re part of a division under the electronics, so we’re very fortunate to have all these added pieces that we can add that I can get to add to my sales territory. So water heaters, we’re part of the electrical solar storage department. I’m not involved in that yet. And sure that’s a whole nother world. But we actually are now doing a lot of things in Alabama.
So the water heaters I think are going to be starting to come into Alabama. Maybe some changes in there. We did all of our solar panels, LG did all the solar panels, they did all of Alabama. So more and more LG things are being assembled and made right here in the United States. So it’s a big change for them. And they see where it’s easier because now we’re not taking it, assembling it and then shipping it in a container. And then we are shipping empty space. So they’re trying to make it more efficient and get more things made here in the United States. So they’re actually making Alabama and in Texas and we have a few other places there in the United States, we’re making more products.
Brett: I think everyone’s learned a big lesson over the last couple of years relative to how vulnerable the supply chain really can be. And like you say, unfortunately maybe 10 years ago, we had all talked ourselves into the fact that hey, if it comes on a container ship from somewhere, it’s fine. They run every day. And I think we’ve all learned the challenges that can arise pretty quickly apparently from that.
And yeah, you’re seeing a lot of companies trying to source there that’s really innovative. An inverter based, I saw a quick news flash on it and I didn’t read up on it entirely, but an inverter based water heater. That’s really super.
Seth: Yeah, totally. The great thing of LG is that we have so many different avenues to try different products. So a lot of our newer compressors and our larger units, that is called an R1 compressor. Not to get too crazy technical, but that compressor started out in the world as a refrigerator. So they flipped upside down a traditional compressor. LG makes a lot of compressors for a lot of other people. And it’s amazing when we started seeing the amount of compressors that we make and sell, not just for us but for others. And so they flipped this compressor, we can run it faster and we don’t have to worry about any noise or vibration.
So now, all of our larger tonnage units and our multi F platform are all these R1 compressors and it gave us almost 15% more heat out of those units. And it also gave us a bigger turndown ratio. Now turndown ratio to understand it, is means our low or a high. So it means on our multi-zone system, how low can that unit go and run efficiently. And so we have a really large turn down factor in all of our units now. And so now we can run if only one head runs on a multi-zone system, sometimes you are in a sense not as efficient. We’re actually now running more efficiently because now that added 15% curve that we call it.
Brett: Yeah, we’ve seen that with your products in this year. When you look at them and especially having that low turndown is great for us as the person integrating into a home. Someone has a small bedroom and that sort of thing. Being able to essentially put less heat or less cooling out of that to make it appropriate size for a small, I say bedroom could be any room, but a small space makes back to where we started the conversation. Makes that room comfortable. Instead of it being just too hot and you can’t make it any cooler or in the summer perhaps too cold and you can’t make it any warmer now you can have comfort in that space.
Seth: Yeah, definitely.
John: So Seth, you mentioned the heat pump water heaters and R1 compressors and then of course the art cool product, which is more of an aesthetic design kind of option that you have for people. Are there some other innovations that you’re excited about? Either things that LG offers right now or things that are kind of coming down the pipe?
Seth: We get a lot of information for new products coming down the pike. As a typical manufacturer side of it, we don’t really talk about it until it lands. I love talking about it and it’s like, well, not yet because we needed this. So I would say it’s definitely solid that we have the heat pump air to water system coming. That is something we’ve already had in applications and now we’ll have a higher temp application for it. And whenever we mention it, it’s automatic.
And the commercial side of it, we have a lot of applications as well dedicated out there, air systems rooftops. So we’ve changed the whole footprint on the rooftop world commercial applications and now we have a box that blows air, but now we have an inverter next to it, so it changes the whole footprint. So now you don’t have cranes going up and putting everything on the roof.
It’s so many different innovative things that they’re always looking at and adding to, we may not be the first one out with it, but we’re always looking to improve maybe where somebody else wasn’t able to make that little piece fit. Now we’re going to make it fit. So we have our one-way blow units which will be launched in the beginning of next year. So you mentioned ceiling cassettes… we’re going to have those. And they waited. They wanted to make sure what was the proper size everybody wants. So it’s going to fit for most applications.
Brett: That’s outstanding. Yeah. I knew those were coming. I’m glad to hear it’ll be that soon.
Seth: It will be really soon. Yeah.
Brett: That’s great.
John: Brett, any final thoughts on LG products and your experience with them in the years that you’ve been working with LG Heating and Cooling?
Brett: Yeah, I mean, we’re really fortunate that we’ve … We’re really considered one of the leaders in ductless in New England. And with that comes the privilege of being able to align ourselves with whomever we want. There’s a reason that LG is one of our two primary products. And again, we fortunately could choose whoever we want for the dance and we believe the LG product is number one.
There’s a lot of variety there. And again, innovative products and things that are different. It’s not just like “the other guy’s stuff” in a different box. It’s innovative and different. The product has performed very well for us. So we’re not just about, again, because we’ve been doing this for 33 years, we’re not just about does it go in okay and then it’s not so … We don’t care what happens after that. The product has held up well, it installs well.
People enjoy working with it. And from a maintenance point of view, again, very low impact for us, which is great because that’s low impact for our customers. They go over to the remote or go over to the thermostat and they turn it on and it works and it does what it’s supposed to and we’re all happy. So it’s been outstanding. They offer a very strong warranty as well. And we’ve also had great luck. We talk about supply chain challenges. We’ve had great luck being able to, when we do need parts, the parts supply chain has been good and robust for us as well. So it’s been a super relationship and we appreciate it.
Seth: No, we appreciate it. I mean, it’s great. Unfortunately, we had all the supply issues that came on board, but I think it’s great for us because it’s enabled us to expand ourselves more and enable people to think out of their box. And I’ll be honest with you, so I sold a lot of boilers, I sold a lot of heaters, you name it. And so I was going to class the other day and I said to a distributor, “How many boiler brands do you sell?” He said 25. 25 boiler brands. Okay. So they’re not for nothing, but that’s where the markets got saturated. And that’s kind of where I feel that market is dwindling. All right? Because in the rebate world, we’re going to be fortunate that we have the rebate right now, but eventually the rebate will dissolve.
Okay. It has to at some point because as things are mandated, rebates disappear. So we’re fortunate to have it. We’re going to use it. And it’s beneficial for most people. And every application right now though to me is looking at the application, seeing how it fits, sizing, comfort, and getting what they need in the end. And efficiency is the bigger part too. And more and more of our brands, most dealers that before only dealt with one brand. Now everybody’s realizing because of the supply demand issues, they need to have an alternate source. And we’re very fortunate that we’re getting a lot of key installers like yourself and come on board with us and realize that it’s a really good product. It really is. And all of our products are made by us. Some brands will put a sticker on something else and it’s really not their brand, they’re just buying it from somebody else, putting a sticker on it. All of our products-
Brett: We see a lot of that. We don’t work with folks who work in that manner. Yeah.
Seth: It’s challenging for us to keep people when they look at, “Well, your price is X.” Well, ours may be a little bit more money, but it’s a brand. But the brand, it means a lot. And LG is a big brand and they take a lot of pride in their brand. So when there’s issues that come up, they want to make sure that the people are happy.
Brett: Yep, absolutely. Well, and that aligns well with our philosophy. We put our customers first. The thing that seems like we chant over here is wow the customer. And we believe in that. And we only want to align ourselves with people who believe similar like you guys. So we appreciate that partnership with LG.
Seth: Yeah. Excellent. Yeah.
John: All right. Well that’s really great information as always. Brett, thanks again for speaking with me today.
Brett: Thank you. I appreciate the time.
John: And Seth St. Romaine, thanks again for joining us today as well.
Seth: Yeah, I appreciate it.
John: And for more information, you can visit the website at netrinc.com or call (781) 933-N-E-T-R. That’s (781) 933-6387.