Distribution is consolidating. New customer-acquisition models are emerging. And while contractors increasingly expect AI to matter, most still haven’t fully implemented it.
Here’s the signal.
INDUSTRY SIGNAL
Home Depot’s SRS Distribution is now in HVAC distribution
The Home Depot’s SRS Distribution completed its acquisition of Mingledorff’s, a major HVAC distributor with 42 locations across five Southeastern states.
The acquisition establishes HVAC as a new SRS distribution vertical. Home Depot estimates the HVAC distribution market at roughly $100 billion.
Contractors interviewed by ACHR News saw potential benefits in areas such as logistics, equipment availability, and pricing.
Their concern was what could change or disappear:
- Technical support
- Training
- Warranty assistance
- Experienced counter staff
- Local distributor relationships
What it means for contractors: Equipment price is only one part of distributor value.
A supplier that helps solve a difficult warranty issue, tracks down a critical component, or gets a technician technical support quickly may be worth considerably more than the difference between two equipment prices.
The signal: As distribution consolidates, pay attention to what happens to the services surrounding the equipment, not only the equipment itself.
MARKET SIGNAL
Group buying could become another HVAC lead channel
An interesting sales model is gaining traction around heat pumps.
Instead of finding homeowners one lead at a time, group-buying programs aggregate interested homeowners in a geographic area through municipalities, nonprofits, associations, newsletters, and other community organizations.
Participating contractors then receive a concentrated pool of prospective buyers.
In one 2025 campaign covered by ACHR News, Elephant Energy generated more than 85 heat-pump installations in roughly three months and reported an approximately 80% conversion rate, compared with its normal 40%–50% range.
Some programs are also deliberately moving installations into shoulder seasons when contractors have more available capacity.
What it means for contractors: Customer acquisition cost may become one of the biggest battlegrounds in residential HVAC.
Concentrated demand can potentially improve:
- Scheduling
- Drive time
- Sales efficiency
- Inventory planning
- Close rates
- Crew utilization
Group buying won’t fit every company.
But the underlying concept is worth watching:
Acquire demand in groups instead of one homeowner at a time.
AI SIGNAL
Contractors expect AI to matter. Most still haven’t fully implemented it.
ServiceTitan surveyed 1,032 contractors across seven skilled trades, including HVAC.
The gap between expectations and implementation is striking.
66% expect AI to moderately or significantly transform their businesses within one to three years.
Only 12% say AI is already embedded in their operations.
Another 34% are actively experimenting.
Among contractors already using AI, 62% report measurable efficiency or productivity gains, with many reporting savings of three or more hours per week.
The two largest reported barriers were:
- Training — 44%
- Integration complexity — 44%
What it means for contractors: The problem is no longer convincing people that AI exists.
The harder problem is implementing it without creating another layer of complexity.
The companies that benefit most probably won’t be those using the most AI.
They’ll be the ones identifying the right repetitive work to automate.
EQUIPMENT SIGNAL
The thermostat is becoming another contractor touchpoint
Nuve Controls’ Sofia AI Thermostat illustrates where connected HVAC equipment is heading.
The system is designed to provide homeowner controls and indoor-air-quality monitoring while also giving contractors access to capabilities such as remote monitoring, diagnostics, equipment performance testing, service requests, and compatible CRM integration.
The important trend isn’t whether one thermostat wins the market.
It’s this:
The contractor’s relationship with the equipment may increasingly continue after installation.
Connected systems can potentially help contractors identify problems earlier, maintain customer relationships, and create service opportunities before the homeowner starts searching for someone else.
For maintenance-plan customers especially, that could become increasingly valuable.
ON THE RADAR
Developments worth keeping in view.
Distribution consolidation: Watch whether additional regional HVAC distributors become acquisition targets as larger companies expand further into the professional trades.
Heat-pump acquisition models: Group-buying programs are experimenting with concentrated demand, standardized offerings, and shoulder-season installation schedules.
AI implementation gap: Contractor interest in AI continues to run ahead of actual deployment, making practical implementation knowledge increasingly valuable.
Connected equipment: Remote diagnostics and contractor-connected equipment are creating another potential bridge between installation and the next service call.
ONE THING TO DO THIS WEEK
Identify your most important outside dependency.
Which relationship would hurt your business most if it changed tomorrow?
- Your distributor?
- Lead provider?
- Software platform?
- Financing provider?
- Largest commercial account?
Businesses become vulnerable when an important relationship works so well that nobody thinks about what would happen if the rules suddenly changed.
Know where your dependencies are before somebody else changes them.
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