Carrier, Trane CEOs speak at Morgan Stanley conference

Carrier and Trane CEOs (who are coincidentally both named Dave) talked shop at Morgan Stanley’s Laguna Conference last week.

In separate conversations with Josh Pokrzywinski of Morgan Stanley, a few common topics were discussed. Here are the takeaways:

• Residential performance
  • Residential accounts for about 20% of both companies’ revenue and has declined single digits to low teens this year.
• The upcoming transition to R-454B
  • As R-410A gets phased out, prices will rise and get passed on to dealers.
  • Because R-454B units are more expensive to manufacture, they’ll have higher price tags.
  • Carrier will start shipping R-454B units early next year to get dealers comfortable and trained ahead of time.
  • Clarification is still needed on how long dealers will be able to sell R-410A into 2025 when the proposed ban goes into effect.

Insight: Considering cost pressures on R-410A, higher prices from R-454B, and a typical, annual price increase, Carrier’s Dave Gitlin said: “We’re probably looking at about a 15-20% price increase over the next two years attributable to those three elements”.

• Policy
  • The (up to) $2,000 tax credit homeowners can claim for heat pump installations has been extended until 2032.

Dave Gitlin believes the tax credits will be “very impactful” on the business, and Trane’s Dave Regnery agrees, but with a caveat. He explained that during heat pump upgrades, there may be rewiring needed, which would be a cost that offsets the credit’s benefits.