We just wrapped up our final webinar of the year, where we looked back at 2024 and discussed what’s ahead for 2025 for the HVAC, solar, and home performance industries. In case you missed it, here are the highlights and key takeaways from the conversation:
1. Economic Indicators for 2025 Are… Okay?
For many contractors—but not all—2024 has been a challenging year. What’s in store for the coming year? Industry reports suggest moderately positive news: while we don’t anticipate a boom, we’re expecting conditions similar to the past year. This means contractors will need to continue working harder to generate the same number of leads they were getting during the post-COVID demand surge.
Key data we reviewed:
- Harvard Joint Center on Housing Studies: LIRA Report Third Quarter 2024
- NAHB Remodeling Market Index, Q3 2024
- EIA Winter Fuels Outlook 24-25
- AHRI Air Conditioner & Air Source Heat Pump Shipments September 2024
2. Political Headwinds—What’s Next?
One of the biggest uncertainties for 2025 is whether the upcoming Trump administration would succeed in making cuts to key incentive programs—particularly Inflation Reduction Act (IRA) tax credits and rebate programs.
Right now, states are accelerating program applications, and the Biden administration is clearly working to get funding out the door quickly. As of December 17, 2024:
- 10 states have rebate programs up and running
- 10 states have approved applications
- 18 states have submitted applications
But there’s uncertainty about whether these funds could be clawed back and what that means for programs like 25C and 25D tax credits heading into 2025.
3. Contactors Will Be Spending More Money Creating Demand for Services
Historically, we’ve recommended contractors allocate 80% of marketing spend to capturing demand (PPC, SEO, content) and 20% to creating demand (social media, YouTube, and display ads).*
Heading into 2025, we’re shifting our recommendations to more of a 60/40 split. The good news? New opportunities for building brand awareness are emerging, including:
- Connected TV (CTV) advertising
- Digital radio & podcasts
- Premium display ads
- Digital billboards
- Reddit and similar platforms
These mediums allow for precise targeting and cost-effective awareness-building to help contractors reach homeowners earlier in their buying journey.
*Catch up on capturing vs. creating demand!
4. The Competitive Environment Is As Difficult As It’s Ever Been
Competition in the contractor space continues to grow. Traditional challenges like lead sellers (Angi, Yelp) remain, but new competitors are emerging:
- Manufacturers are increasingly marketing directly to homeowners
- Private equity-backed HVAC companies are distorting the market with with a singular focus on profits and aggressive expansion
- Concierge tech companies promise “better customer experiences” by managing leads and subcontractors or vertically integrating services
We expect this will only put more pressure on contractors to adapt and differentiate if they want to stay ahead.
5. Differentiation Based on High Performance
We’ll continue to champion a key strategy in 2025: branding your business as high performance. This approach prioritizes:
- Building science expertise: Delivering measurable results in comfort, efficiency, and cost
- Customer experience: Ensuring a seamless journey from first contact, to the website, through sales, and on-site work
Contractors who embrace this mindset can differentiate themselves by offering outcomes customers can feel and trust.
6. Customer Experience Is King
Concierge companies* target homeowner fears about home improvement work by promising simplicity and a better experience. We’re going to be thinking hard in 2025 about how contractors can address this head-on by leaning into customer concerns and creating a high-quality customer experience from start to finish.
7. Modern Tools Can Streamline (& Refine) Your Diagnostics Process
A critical part of the customer experience is identifying a home’s unique needs and delivering a seamless process for homeowners. Leaning into building science remains key, but it doesn’t always require a traditional energy audit. Modern diagnostic tools—like Amply for quick Manual J calculations, TruFlow Grid for airflow testing, MeasureQuick for comprehensive system evaluations, and Snugg Pro which simplifies the audit/assessment process—simplify the process and deliver accurate results efficiently.
High-performance contractors can stand out by adopting these advanced tools to assess and address issues while maintaining a focus on building science.
8. How AI Is Continuing to Change the Way Homeowners Find Contractors Online
Finally, while Google has long dominated the way that homeowners search for contractors, its position is being challenged.
AI-driven tools like ChatGPT and Perplexity provide a cleaner, more intuitive search experience for users frustrated with Google’s clutter. While these platforms haven’t captured significant market share yet, their ability to simplify contractor searches represents a growing challenge that contractors need to monitor closely in 2025.