Why DIY HVAC Installs Break Refrigerant Laws & Harm the Trade with Gerry Wagner - Part 1
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All right, guys. So DIY HVAC, it seems to be a thing that some manufacturers are pushing. They're pushing these units that you can buy online and get them delivered to your house and you can install them DIY. So Jerry Wagner, who I'm friends with and who is a pretty famous trainer around Canada, North America on mini splits, heat pumps, etc.,

He went on a bit of a rant on LinkedIn and he asked me to reply to that post on LinkedIn. I did. And it became a post that people were debating on, which was a good, healthy debate. Anyway, so we're going to get into this with Jerry. Nice, honest, candid conversation. This is the HVAC Know It All podcast. I'm your host, Gary McCready.

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A few days ago on LinkedIn, you put a post out about

DIY. And you could tell you there was a lot of frustration in the wording of it. And you're a passionate guy, so I wouldn't expect anything less from you, but a passionate response to something you are passionate about. So let's start there. Let's talk about

What made you write that and where that all came from? Yeah, what brought it back into my consciousness, because it's always been in my consciousness for quite some time. But what really brought it to a head and influenced me to write that post was I was at the AHR Expo in Orlando the week before.

which of course is the big art trade industry convention, if you will, in the States anyway. And this brand, and I don't know how you, I don't want to name names,

It's not important that I think we name their brand. I'm quite sure everybody knows who we're talking about anyway. And there is more than one of these kind of do-it-yourself targeted manufacturers or master distributors is probably a better description. But anyway, this primary one had a very significant, very elaborate boost.

At the AHR Expo. And it really kind of blew me away. I didn't understand why a company that targets or specifically markets their product to the DIY market, to the homeowner,

Why would they be at AHR? Who do they want to talk to? Homeowners don't go to AHR. And every time I would walk past their booth, Gary, it was full of what I have to believe were independent HVAC contractors. And it was just blowing me away. Why would these, why would we sleep with the enemy? And I know that's, you know, kind of being overly dramatic, but,

Why would we be doing business with a company that's trying to put us out of business? You know, just I don't get it.

And I still don't get it quite, quite frankly. So that's what really inspired me to put that out there. Yeah. Fair enough. I put this onto Instagram. We can go over like Ben Reed put together a super cool survey that we're going to run until the end of March. And I can leave that survey here in the link. I'll put a link in the show notes of this. This might not even be, this podcast might not be released till March.

mid-March or so, something around that timeframe. But if you catch it before the end of the survey ends, try to take it. So I put this out on Instagram. I'm just going on my phone here, Jerry, because I put something out on Instagram about this. And I got a lot of 171 replies to this. I'm happy. This is a question I posed right on the front of the screen. Listening to a little bit, I'm sure you can appreciate a little bit of Dire Straits.

Oh, I love it. Yeah.

Uh, something along the lines of a mini split or something, mess it up, and then they're gonna have to call a professional to come in and fix it. That's the majority of the answers that I got. And the other, some other people were saying commercial is not going to happen. No way. This is more like a residential thing. Agreed. For simple like mini split type installs. But people brought up a good point too.

Car parts have been sold to the public for decades, but car garages do not go out of business because they don't have, people don't have hoists in their garage. They don't have access to the types of tools that a mechanic has and a diagnostics computer and all that kind of stuff. So if I compare it to the auto industry and the parts being available to the public and auto mechanics not going out of business, what do you think of that?

I don't think it's a good analogy at all, quite frankly, because in an automobile, there's nothing that requires a specific licensing other than the air conditioning, quite frankly. There is nothing in an automobile that requires specific licensing to do a repair.

I can do breaks. Anybody can do- Depends where you live. Depends where you live. Well, that's fair enough. Depends where you live. Because we have to have an apprenticeship here for auto mechanics. Oh, wow. Okay. Just like refrigeration, just like plumbing, just like all the trades are under that apprenticeship here. Fair enough. And I don't want to make light. I don't want this to be insulting to auto mechanics at all. I'm a motorhead. So I more than appreciate their talents and their ability.

But again, the refrigerant, I think an issue which had been overlooked even in my post, but I had a conversation with a fellow who read the post and he just didn't, he wanted to speak with me as opposed to writing something online. And he brought up the issue of the refrigerant. You know, there are laws in...

in place right now that limits the amount of refrigerant that a homeowner can purchase that is integral to a piece of equipment, like a dehumidifier, like a refrigerator. And it's generally two pounds to a pound and a half or less. Well, we're looking at systems, Gary. I mean, you know better than anybody that, you know, a mini split, a multi-zone mini split can have as much as six, seven pounds of R410 in it.

And now we have another factor to throw into this, and that is A2L refrigerants, which will be, well, are transitioning here in the States, and you guys will probably be in the next year or two.

Um, where there's a, we are, we are here now. Oh, there you go. So, you know, they're now throw into a flammability issue with, with the refrigerant. And I know what my detractors are going to answer with, with that. Is it, well, they don't, the homeowner, the installer doesn't touch the refrigerant. It's a pre charged, uh, refrigerant line. They never touch refrigerant. Yeah.

Fair enough, but you're handling refrigerant, and that's what the law speaks to. The handling of refrigerant, the purchasing of refrigerant are all limited and under those same laws. So, you know, there's a lot of clearly looking the other way. It's not my job kind of thing. You know, again, in this conversation, this fellow I was speaking to actually went as far to contact authorities in Canada.

and speak to this. And they said, well, we can't inspect every box that comes across the border. How do we know there's refrigerant in it? Well, come on, guys. Anybody listening to this podcast will know. Look at the box. It says it all over it, what it is. On every side, upside and down, it says what's in the box. And if it's a piece of HVAC equipment, there's refrigerant in it.

You know, it's no mystery. Nobody's hiding it. It's not even subtle. It says what's in the box. I guess my point regarding the automotive analogy is, again, there's an element to this which I think is being overlooked, and that is the refrigerant issue. You know, there are regulations that

prevent homeowners from purchasing refrigerant. Why is this happening? I'm not sure. Like I haven't seen the laws or the U S or Canada when it pertains to homeowners and all that kind of stuff. But I, when I first started, when I, when I first left the company I was with for 22 years, one of the first jobs I took on was because I needed work was a homeowner that purchased a multi-zone system on his own.

uh, online and needed a licensed technician to install it for the warranty stuff, but he was able to buy it himself and get it shipped to his house.

So I don't know what loopholes there are for a homeowner to be able to do that. I did it at that point because I needed the work. It was actually a fairly straightforward job. It was a new construction home. It was a super easy install and it was actually enjoyable because I didn't have to cut into walls and mess around with, it was, everything was wide open for me. It was just a frame and it was, it was perfect. But I, I have a, I have a policy now is I, I do not install any,

Any piece of equipment that a homeowner buys, unless it's a friend or a family member or something like that. Sure, sure. Some Joe blow off the street calls me and says, hey, I just bought this mini split. Can you come install it for me? I am like, no, sorry, I won't. Or if I decided to, if I decided to, the cost of labor would go way up because now I can't purchase the equipment. I can't mark up the equipment. So for me to come out there and install it

The profit I would make there, as opposed to buying the equipment, marking it up the way I'm supposed to, is going to be less. So I have to account for that kind of stuff because I'm running a business that has expenses. So that would be really the only way I would do it is if I was to charge a high labor rate, but I wouldn't get the job anyway. So there's not even any point in me

quoting it because they're going to find some kid probably second, third, fourth year in the trade. That'll do it for 500 bucks, 600 bucks because they live at home. They probably are going to run it out of their boss's truck. They've got no overhead. And that's another situation we can talk about later. But there is, there was one other thing that somebody brought to the table and I feel it's a valid point and I'm going to get your take on this.

And I know this, I have been around other job sites with other contractors and I've talked to lots of contractors online, seen pictures and videos. And it seems like there's a severe lack of education and knowledge in this industry as a whole. And if a licensed or somebody that's in the trade already has problems installing something.

A homeowner should have major problems installing something. And it's going to come right back to picking up the phone and, hey, I bought this unit.

I try to install it and I'm stuck. Can you come help me fix it? And it creates work for some company that's got a guy free that can go do that. So what do you think of that? If we can't find technicians in the trade that are professionally being paid to do this correctly, how is a homeowner going to have the knowledge, the wherewithal to do it right? No question. You know, one of the guys...

or it might have been a young lady that responded to my post on LinkedIn about this, said that he actually carries around pictures of DIY jobs that have went awry, you know, just just, you know, terrible, terrible jobs.

And he puts them on the kitchen table when he's sitting in front of a potential customer with his proposal. And I thought, well, you know, I think that's brilliant, quite frankly, to point out what can possibly go wrong. I like it much better.

and Gary, you know, this, there's a website out there. I'm like, again, that just accentuates bad installs. It's actually even the name of it accentuates bad installs. And I don't like it because again, to me, it, whether it's its intent or not, it, it sheds a negative light on the trade. And I don't want to be any part of that. I didn't want this to be any part of that. Um,

Uh, in fact, just the opposite. I'm trying to do nothing but respect those of us, all of us who have gone through the proper training, who have spent years of our lives dedicated to learning this beautiful trade of ours. And, you know, pointing out this company that is quite frankly, trying to put us out of business. Um,

But anyway, I don't know if that answered your question. I don't think they'll ever put anybody out of business that's good at this trade. I was just going to say, you know...

Again, the responses I got on LinkedIn, a fair amount of them were, oh, Jerry, come on. Everybody's doing it. All companies, all manufacturers have some sort of, you know, quote unquote e-commerce. And you know what? You're right. Everybody does, whether they directly do or have some subdivision that does it or a master distributor that does it on their behalf.

Virtually all manufacturers are offering their product through e-commerce in one way or another. But man, I still think there's something different when a company is specifically, Gary, specifically marketing to a homeowner demographic. That's different. That's, in my opinion, completely different to a DIY market.

It's dangerous. It's dangerous not only for the trade, it's dangerous for the homeowner. It's definitely dangerous for the homeowner because they can, we could go down the rabbit hole on that one, why it's dangerous to the homeowners. But I do want to ask you, when you were at HR. People have been putting in water heaters themselves for years.

No doubt. No doubt about it. Can't argue that. People have also been getting killed doing it. You know, whether it be being electrocuted, if it's an electric water heater, creating a gas leak, not venting. I mean, I could go on and on. There's at least in every market a half a dozen of those stories that make the newspapers year after year. So when you were at AHR and you've seen all these people around this booth, did you walk up and...

and listening on what was happening at all? Like, so you gauge what they were, why a contractor would want interest in this company? I didn't. And I'm ashamed to myself that I didn't, quite frankly. No, I don't know why in retrospect, why I didn't. And frankly, I should have had the cojones to actually go up to this company. And I think that's something I don't want to

not give them an opportunity to defend themselves. I think they have every right to do just that, to defend themselves. So maybe through LinkedIn or maybe through my YouTube program or Gary, yourself, who knows, but maybe we need to reach out to them and let them answer some of my concerns.

And I will say this too. I wonder if... I would be all for it. I'd be all for it. Anyway, finish your thought, Jerry. Finish your thought. I wonder if this is not a generational thing. I'm an old guy. I'm going to be 64 in a couple of weeks. My working in a truck ended, my gosh, 15, 20 years ago already. So I recognize...

That things have changed. I've witnessed all those changes. In fact, I think my age is an advantage in this conversation because I saw a dramatic change or what we thought was going to be dramatic change when the big box people came around. When the depots and the lows and the Canadian tires and the Menards. Oh, my gosh. Everything's going to hell. This is going to kill the industry and the trade and everything else. And we all adapted. In fact, we all adapted.

kind of benefited from it to some degree. We had another source of equipment and installation accessories when we needed them quickly. There was always a depot laying around. There was always a Lowe's or a Canadian Tire.

So, again, I don't want to believe this is me just being an old man and not willing to recognize change. You know, you mentioned earlier about how early on in your career you would possibly get involved with one of these jobs, but now not so much. I was the same way when I was young. I never wanted to walk away from any job.

But one thing you learn, I think, quite quickly in the trades is that there are some jobs you want to walk away from. And a DIY project gone awry is a project you want to walk away from. To me, it's a no-win. You'll...

you'll never win even if you walk away with the money that you you thought you earned and it's going to come back the these things have warranty issues you'll be tied to it for life you become married to it literally and i again that's one thing that age does teach you is there are jobs you want to walk away from and a diy gone awry would be one for sure

So on your LinkedIn post, I responded to you and I'm going to go through that with you again and the audience here because I

I feel this is a major part of it. So when I first started in the trade in the early 2000s, all the people that I had talked to and all the companies that I had applied to, these people, these were all like mom and pop type shops started by one guy that was good at the trade and then built it out to 15 to 10 employees. And I lived in a city called Brampton. Brampton's a

a suburb of Toronto, right? And there was a lot of competition. There was a lot of shops that were 10 to 15 guys, 10 to 15 trucks on the road, but they were all independently owned. And I could imagine all around Canada and the US, it was probably very similar back then. So there's a trend now that private equity is buying up

Because private equity, their whole mission is to make profit. That's what it is. It's a business. They buy and they build and they sell and they make profit. I went down the rabbit hole of private equity when I was looking at an app idea I had. And I researched it out for a while. And if private equity gets involved, venture capitalists gets involved, they're going to put in a certain amount of money within a certain amount of time, which is usually within...

five years or so, give or take, they want about three to five times their money back in return. Yeah. Because it's an investment. They want a multiple of what they put in back. And the only way to do that is to make more money, is to build and make more money. So what I'm finding is

when a smaller shop gets bought up, and this is not just my ideology of it, this is what my feedback is from people all across North America, is that

They come in and they start changing things. And now when a technician goes into a home, they're being trained to sell rather than trained to fix. And a capacitor replacement costs $900 type thing. Right. And people are like, whoa, $900 for a capacitor that I can buy on Amazon for 15 bucks. They're like, let me look into how I fix this myself. They get on YouTube, they order the capacitor and they fix it.

And they don't spend $900 on the capacitor replacement. So I think that even though it's,

It could be a little bit evil genius. I think on the part of these people selling to homeowners could be a bit of an ingenious idea on their part of a business idea because they see that homeowners now want to DIY as much stuff as they can to save money. And they're like, whoa, there's a market for this. I'm going to start selling to them. Whether we agree with it or not, whether it's dangerous or not,

It's it's there's a market for it and it's a business and they are making money. So what do you think of the whole mom and pop shop now turning into these PE investment owned companies that are that are focused on sales rather than relationships and repairing and this being a cause of it? Let me get your take on that, Jerry. Well,

My response now is going to be probably exactly my response to you that I did on LinkedIn when you brought this up.

And again, I'm going to play the old man card. I can't help it. I'm an old man. I've been around. Private equity is just a, you know, that's just a newfangled word. You know, venture capitalists, that's just a newfangled term for it. This has been going on in the trades, specifically the HVAC trade and plumbing trade.

For generations now, as long as I've been at it, where outside money investors were coming in because they recognize HVAC.

as having exponential growth potential, which is a good thing. We should all be, yeah, absolutely. I mean, COVID proved that. COVID, we were essential. That put us in a different level and it put us on the radar, I think in a good way for outside investors. Okay. So that said,

In my day, Gary, all those guys are gone. All those companies that bought up mom and pops and tried to create these conglomerate

HVAC contracting firms that were not only national, but some even tried to go international, they're gone. They don't exist anymore. They all failed for exactly the reasons that you described. They were in it for quick profit. They weren't doing quality work. They were hiring people that frankly, I wouldn't allow in my house, nevertheless, you know, to turn a wrench on something, right? That's just the honest truth. Now,

The difference today, and I mentioned this in my response to you online, was the private equity businesses, funded businesses that I see today are different. Most of them, the ones I've witnessed, are being led by young, brilliant entrepreneurs, entrepreneurs.

And you're right. Admittedly that don't know our trade. I concede that to you. And I'm not saying that's a good thing or a bad thing. That's yet to be seen, but what they are brilliant that my, my friend is business. They,

They really, really are. And I do see them making, because they are brilliant business people, they recognize that the product that they offer, the services that they offer has to be good. It has to be as good or better than what the mom and pops are doing. And I think there are, at least again, all I can speak to is the ones that I'm witnessing now.

I think they're doing a good job at that. So I don't see private equity money or outside capital as a problem at all. Just the opposite. I think it's a good thing. I think it's respectful. I think I think we all should be applauding it. I think we all should be trying to grab some of it. Right. Absolutely. Because I agree. I agree with you. I agree with you. I'll say I agree with you for the tiree that's tired and wants out.

It's a fantastic thing because they have sweated and bled and probably cried a few tears during the time they owned that business. Right. And it's good for them because they have an out and they get paid and it's finally what they deserve.