“We’re cautiously optimistic”: CEO on A2L, consumer sentiment, and 2025

Over the past 24 months, the rate of inflation has fallen from its peak in 2022, but everyday prices remain high. Consumer confidence has taken a rollercoaster ride, HVAC shipments dropped 17 percent but have rebounded, and as of January, manufacturers can no longer produce new 410A systems. 

Given the resulting mix of confidence and uncertainty, I spoke with Charley Boyce, CEO of Paschal Air, Plumbing & Electric, a four-state operation based in Arkansas, to get an on-the-ground perspective. Below is our conversation, lightly edited for clarity. 

Last year, choppy financing approvals and ‘repair over replacement’ grabbed some headlines, but I understand geographies differ. Did you guys see any of that?

I do believe that’s a real thing — people have been kind of kicking the can on replacements. And then, yes, financing has been tough — declines are up. So I agree with the statement that, in general, 2024 was tougher with a lot more repairs over replacements.

Are you planning for that trend to continue this year?

My view is that 2023 was tough and not a lot of people saw it coming. We kind of had to pivot mid-year, and I think 2024 was an extension. It was a tough year, but at least for us, we knew what we were in for versus 2023 when we didn’t expect it. Our view is to go through 2025 as if it were ‘23 and ‘24 all over again, and if a couple of things fall in our favor, then that’ll be great.

Now, that said, I wouldn’t be surprised if maybe the first quarter or the first half of ‘25 is still kind of challenging. But I do think it’ll come back. I don’t know if that starts this year or in 2026 or 2027, but I feel like we’ve hit the bottom, and we’ll start climbing out. 

Is that belief based on a certain data point (or several)?

I really think that election certainty matters. For whatever reason, when elections happen, people are just uncertain and they hold on to their money. Maybe that changes based on where you live, but it matters from a consumer sentiment standpoint. So I think that having the election behind us is a positive.

How are you guys thinking about A2L? I’ve talked to contractors who are leaning in right away and others who aren’t. 

The camp we sit in is to lean in and start working through it now. I’d rather work out all the bugs and kinks in Q1 so that when we hit Q2 and Q3, which would be our peak season, we’re not getting our hands on the equipment for the first time.

All that said, I think a lot of it’s driven by manufacturers and distributors and what they have. At least for us, in the near term, that’s what’s dictating a lot of the strategy: What we can even get our hands on.

What are you hearing, pricing-wise? The OEMs on earnings calls have floated 10 to 15 percent increases, but I’ve heard both higher and lower. 

We haven’t seen pricing on the full product line yet, but the early indications, which have been pretty consistent across distributors, are around eight to 10 percent in price. We plan to pass that on, and I’ll be interested to see what happens. I think consumers have pricing fatigue, and now we’re going to throw another 10 percent on. So I’m interested to see how it goes. Will there be more repairs? Does it slow adoption? I don’t know. 

Got it. All that said, if I’m hearing you right, you’re still optimistic about what’s ahead.

I mean, we’re cautiously optimistic about 2025. Hopefully, it starts to rebound during the second half of this year and then we’re back to some level of normalcy in ‘26 and ‘27. But yes, I’m generally optimistic about what the future holds.

Editor’s note: This story is for perspective-sharing purposes only.