Refrigeration and Air-Conditioning Services and Repair Shops

Industry Snapshot

Over the past 50 years, refrigeration and air-conditioning products have evolved from luxury items primarily offering comfort and convenience to vital components of many industries. Today, virtually every scientific and technological industry relies on cooling systems and equipment that control the temperature, humidity, air movement, and air quality of enclosed environments. Commercial, residential, and other buildings also rely on climate control systems.

Refrigeration and air-conditioning service and repair shops employ the mechanics and service technicians who keep self-contained and split-system air-conditioner units, electric refrigeration equipment, and electric refrigerators in good repair. In the mid 1990s, there were an estimated 3,658 establishments in this category. Typically, these firms were small, employing an average of 6 employees and generating a total of $3 billion. In 2005, the total number of refrigeration and air-conditioning service and repair shops climbed to 8,204 establishments, with a workforce of 38,447 employees. Combined, shops posted revenues of $2.58 billion. By 2009, the number of firms had fallen slightly to 8,005 but the workforce remained relatively steady at 38,624. Industry revenues, however, climbed to $3.02 billion.

Organization and Structure

The three main employers of refrigeration and air-conditioning service and repair technicians are manufacturers of environmental control equipment; distributors or dealers who sell and service equipment; and firms involved in air-conditioning, heating, and refrigeration. Some technicians also establish themselves as entrepreneurs, opening up their own repair businesses.

The majority of establishments operating in the refrigeration and air-conditioning service industry--some 67 percent--are corporate entities. Of the remaining establishments, 31 percent are sole proprietorships and 2 percent are partnerships. Industry establishments are located throughout the United States.

Small appliance products serviced by industry technicians include home refrigerators and freezers, room air conditioners, packaged terminal heat pumps, dehumidifiers, under-the-counter ice makers, vending machines, and drinking water coolers. Industry service technicians also work on complex customized appliances used in the chemical, pharmaceutical, petrochemical, and manufacturing industries, as well as in industrial ice machines and ice rinks.

Background and Development

The earliest climate control systems--piped steam installed to heat factories, churches, assembly halls, and other large buildings--eventually led to ventilation systems that combined heating with circulation of fresh air. About the same time heating systems were being developed, experimentation with artificial refrigeration began. By the mid 1800s, inventors understood the principles on which mechanical refrigerators operated. Dr. John Gorrie applied those principles when he invented a cold-air machine to relieve the suffering of yellow fever patients in a Florida hospital in 1842. After the Civil War, several companies in southern states applied them in ammonia-absorption machines to make artificial ice. Still, until the early part of the twentieth century, refrigeration continued to rely on ice cut during the winter and stored for later use.

While the technology to cool and circulate air was developed by the turn of the century, nothing was known about regulating its moisture content, or humidity, until Willis Carrier carried out a scientific study on air-conditioning. In the summer of 1902, he designed the first system to control the temperature, humidity, and circulation of indoor air. Soon afterward he devised a way to cool using an artificial fog instead of coils. The two methods became the basic ones involved in all later air-conditioning equipment. Industry after industry adapted Carrier's invention for controlling humidity to their particular production purpose. Because of his pioneering research and inventions, Carrier became known as the father of air-conditioning.

In 1914, Carrier developed the first residential air-conditioning system. Seven years later, he created the centrifugal refrigerating machine. This machine had a refrigerant that made it possible to produce safe, dependable, large-capacity cooling devices. By the 1930s, air-conditioning spread from industry to become common in stores, theaters, and other large buildings.

In the early days of the industry, manufacturers and distributors trained most technicians and mechanics in how to repair air-conditioning and refrigeration equipment. The equipment had limited capacity to cool and regulate air quality, and thus the systems and the skills needed to maintain them were relatively simple. Over the years the equipment became increasingly sophisticated, and the knowledge and skills required to maintain cooling systems became more specialized. Modern equipment utilizes a wide variety of synthetic refrigerants, depending on the cooling job to be done and the types of evaporators, condensers, and compressors in the system. In addition, components are being installed with microcomputer controls. Because of the high-technology aspects, modern refrigeration service and repair workers generally receive training at community colleges, vocational-technical schools, and trade associations. Preparatory courses include electronics, chemistry, physics, mathematics, drafting, and writing.

Stratospheric Ozone Protection
The biggest challenge facing refrigeration and air-conditioning service and repair technicians in the 1990s and the early part of the next century was compliance with rules and regulations governing refrigerants. During the early 1970s, scientists identified the use of chlorofluorocarbons (CFCs)--a common refrigerant--as a primary cause of the depletion of the ozone layer of the earth's atmosphere, which protects life from harmful radiation. The U.S. Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA) banned the use of CFCs in all but a few essential applications in 1978.

In 1986, further research showed a connection between CFCs and global warming. Scientists also found an opening in the ozone layer over Antarctica. Recognizing the global nature of the problem, 24 nations and the European Economic Community (EEC) convened in Canada in 1987. As a result of the meeting, in 1992, most of the major CFC and HCFC (halon) producing and consuming nations signed the Montreal Protocol on Substances That Deplete the Ozone Layer. The Montreal Protocol, along with later amendments, called for a gradual reduction in worldwide consumption of eight chemicals and, ultimately, their complete phase-out. The agreement also encouraged countries to recover, recycle, and reclaim controlled refrigerants.

The United States drafted additional regulations regarding CFC and HCFC substances as part of the 1990 Amendments to the Clean Air Act. The act contained regulations affecting mechanics repairing or servicing an appliance or industrial process refrigeration. As of July 1, 1992, a service technician could not knowingly release or dispose of any substance used as a refrigerant in a manner which permitted the substance to enter the environment. Furthermore, effective November 1995, the prohibition applied to substitutes for CFCs and other banned refrigerants, unless the EPA specifically determined the substances posed no threat to the environment. CFC production was completely banned by 2000. The penalties and fines for violating the act's provisions could be severe.

In 1993, the EPA published additional regulations for refrigerant recycling and emissions reduction. The regulations provided guidelines designed to minimize release of CFC and HCFC refrigerants into the environment during the service, maintenance, repair, and disposal of appliances. Technicians were required to follow the act's required practices and use equipment certified for the type of appliance opened for service. These guidelines applied not only to technicians, but also to refrigerant reclaimers, appliance owners, and manufacturers of appliances and recycling and recovery equipment.

Air-conditioning and refrigeration are essential in all segments of modern society. Nearly every newly-built home has central air conditioning installed, and many existing buildings are retrofitted with air-conditioning equipment. Carefully controlled temperature and humidity conditions are crucial to the manufacture, transport, and storage of numerous products. Numerous chemicals, pharmaceuticals, explosives, solid state electronic devices, and oil products require refrigeration during their production. Fully 95 percent of food production depends on refrigeration, including some half-billion tons of perishable food each year. In addition, refrigeration supports surgery by safely storing drugs, blood, bone, and tissue, and by supplying clean, pure ice for such purposes as frigid anesthesia.

Each refrigeration and air-conditioning application represents a different segment of the large and very diverse service industry. Each segment requires engineers and technicians who can keep the equipment and systems operational. Opportunities for establishments that service and repair refrigeration and air-conditioning equipment should increase as the number of applications increases.

While utilities skyrocketed due to higher energy costs throughout the 2000s, consumers and business owners alike were unaware of the importance of energy conservation when it came to the maintenance of their HVACR systems, which included heating, ventilating, air conditioning, and refrigeration, according to the Air Conditioning Contractors of America (ACCA). "The amount of energy wasted by inefficient air conditioning is huge," said Paul T. Stalknecht, ACCA president and CEO. Of the 55 percent that it costs to heat or cool residences and businesses, anywhere from 15 to 30 percent is lost in dollars. Thus, the 2005 energy bills included a "significant provision that is key goal of the American Living Campaign for Sustainable Comfort." Initially introduced by the ACCA in 2003, this project would require the Secretary of Energy, the EPA, and the Small Business Administration to work toward educating consumers, as well as business owners, about proper HVACR systems maintenance.

Brian Harvey, president of Laurel, Maryland-based H & C Inc., as well as an ACCA member, went before the House Small Business Committee on May 4, 2005, to voice his concerns regarding unfair competition. Specifically, Harvey pointed to contractors who were being subsidized by utilities with a monopoly in certain geographic areas. In addition, fair competition was heating up as big box stores like Home Depot and Sears became involved within the air-conditioning market.

Meanwhile, the Air-Conditioning and Refrigeration Institute (ARI) and the EPA released their newest guidelines directed toward manufacturing facilities that "produce, use, store, or transfer refrigerants." In 2005 an industry survey revealed that great strides were made on the part of the air-conditioning and refrigeration industry, with 50 percent of those queried reporting the construction of new facilities having a "zero emission goal."

Current Conditions

In the late 2000s, climate, equipment, and fuel prices remained the most significant factors in determining cooling costs. For example, in Texas, the average homeowner spent $600 a year on cooling, whereas the average cost in the Midwest was half of that. Because the consumer could not influence the first two factors, efficiency was the primary focus. Ideally, old units could be replaced with new, much more efficient units. According to Elisa Bernick in the Family Handyman, "Replacing a SEER 7 unit with a SEER 14.5 unit that costs $3,000 will save you about $700 a year and pay for itself in five years."

Despite the larger heating and cooling industry's push to replace old units, in the late 2000s, the economy was struggling to emerge from a significant recession, consumers commonly turned to repair shops to manage their existing cooling system. In fact, according to a February 2009 survey conducted by the Air Conditioning, Heating, and Refrigeration News, more consumers were opting for repairs rather than replacement. Bill Mihalovich, president of Air Repair Mechanical Services, noted that "a lot of [residential] customers, both new and existing, want to fix older systems rather than replace them." However, although consumers were not replacing inefficient units, broken units were more commonly replaced with a new unit. "Usually it's because of the wait time for an indoor or outdoor coil to be ordered," David Hutchins, president and owner, Bay Area A/C and Appliance, agreed. "In many cases, customers won't wait weeks for a part."

Legislatively, the Obama administration began work to tighten the restrictions on the heating and cooling industry to further protect the environment. For example, as of January 2010, the United States banned the use of R-22, a refrigerant used as a coolant in the majority of U.S. households. However, existing units may be maintained, and a smaller quantity of R-22 is continued to be produced to service these exists units. In addition, R-22 can be removed from the unit, recycled, and reclaimed to recharge the existing system. According to the Air Conditioning, Heating, and Refrigeration Institute, "A phase-out period was developed to provide equipment owners with enough time to switch to ozone-friendly refrigerants when they would normally replace their air conditioner or other equipment. This transition is important because supplies of R-22 will be more limited after 2009, which may cause the price of R-22 to increase. Starting in 2020, new R-22 will no longer be produced, so consumers will need to rely solely on remaining supply or reclaimed refrigerant to service any systems still operating after that date."

Workforce

Most of the refrigeration and air-conditioning repair industry's employees worked for cooling and heating contractors. Others worked in large buildings, schools, and factories. Approximately one out of eight technicians was self-employed. The average hourly wage was approximately $20 per hour in 2009, up from around $14.00 per hour in 1999.

Apprentices usually start out at half the wage rate of experienced workers. Approximately 20 percent of the technicians are union members, most belonging to the Sheet Metal Workers' International Association and the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada. Many employers provide such benefits as health insurance, pension plans, work-related training, uniforms, company vans, and tools.

Technicians learn the trade through technical school, apprenticeship training, or occasionally, informally on the job. Six-month to two-year programs in air-conditioning, heating, and refrigeration are offered by secondary and post-secondary technical and trade schools, junior and community colleges, and the armed forces. Besides the basics of installation, maintenance, and repair, students study theory, design, equipment construction, and electronics. Frequently sponsored by trade and union organizations, formal apprenticeship programs usually run three or four years and combine classroom instruction and on-the-job training. Those who learn the trade informally usually begin by helping an experienced technician and performing tasks that gradually become more difficult.

All technicians who purchase or handle refrigerants must pass a written certification examination administered by organizations approved by the EPA. They may become certified in three possible areas: Type I, servicing small appliances; Type II, high pressure refrigerants; and Type III, low pressure refrigerants. Some trade organizations provide training programs to prepare technicians for the examination, as well as general skills improvement training and self-study courses.