MARKET PULSE: Stiebel Eltron’s latest hire marks a new phase of expansion for the company. It comes at a time when business is looking up for high performance buildings and heat recovery systems that offer solutions to a heating humid climate and can solve the mould problems that have plagued some parts of housing.
According to German based all electric manufacturer Stiebel Eltron’s Australian business there’s good possibilities for growth in the heat recovery and ventilation industry (HRV), especially in housing.
The company, at just 50 employees, is almost boutique, but it has plans to grow to about 90 by 2030 on the back of what it says is growing interest in heat recovery and ventilation systems.
“We’re known as a high quality brand … we are not cheap,” general manager Nick Shepherd tells us in an interview with that marks his hire of Kate Nason, Stiebel’s first head of sustainability, who joins the interview.
The company is not interested in competing in a consumer market that undercuts prices, Shepherd says, “We’re all about solving the problems that others don’t want to solve.”
The logic is that the more complex the markets, the less competition there will be.
One of its projects is the trial of heat recovery and ventilation upgrade options offered to buyers in Frasers Property’s multi stage mixed use development at Bradmill Yarraville in Melbourne’s inner west.
Another is exploring the opportunities in remote accommodation and finding solutions for endemic mould and uncomfortable living conditions for workers in mining, defence and education. Possibly health care at some point in the future, Shepherd adds.
It’s at the Yarraville site that Shepherd got to know Nason.
She was running the tender for suppliers for the HVR systems.
Stiebel Eltron, Nason said, had come back with the most best offer and “also probably the technology that had the most backing in terms of runs on the board” with 30 years of experience in the ventilation space, and the value of German technology.
The marketing settled on “balanced ventilation” to explain how the system would bring fresh air in and extract and filter stale air.
Thing is, air tightness can be “quite dangerous” without the right ventilation strategy, Nason says. It’s important the industry get this right “either in parallel or ideally ahead of that code change, which it’s on the cusp”.
“We tried, I guess, to remove technical jargon so people could understand it better,” Nason tells us.
“Having spoken to a few customers, I feel like the filtration side might actually be the hero.”
The trial is for the initial stage of the multi-stage project that could run for four or five years and provide a total of about 680 town homes and up to 700 apartments.
For the business it was a new direction, Shepherd says. There’d been a few projects in residential but “not to this scale”.
Get this right though and the potential upside is industry wide. Heat recovery ventilation is on the cusp of being regulated into the new build market, he says, “especially into the higher performing passive homes where it’s very much needed.”
Thing is, air tightness can be “quite dangerous” without the right ventilation strategy, Nason says. It’s important the industry get this right “either in parallel or ideally ahead of that code change, which it’s on the cusp”.
Currently there’s a “tick a box” option in the NatHERS home rating tool that allows you to import air tightness values but that’s no particular benefit from this at the moment for HRV companies, she says.
“There’s no incentive to blower test homes at the moment. But I feel we’re not far away from that ticking over and then being incentivised.”
Shepherd says there is so much to gain – in comfort and avoiding mould by a more sophisticated approach to ventilation and airtightness.
Remote accommodation
In remote accommodation, he says, workers typically live in very poor indoor air quality, largely because of the humidity.
“You’ve got air conditioning systems running at 15 degrees, and then you’re letting all this hot, humid air in, and it’s condensing.”
And the buildings are not well insulated.
“The name of the game is to stabilise the environment inside,” Shepherd says.
“You can’t have it swinging from hot to cold throughout the day because you’re going to get condensation swings … and you’re going to just have wet surfaces that then propagate mould.”
“It’s trying to get people not have their air conditioning set to 18 degrees, set it at 22, and just leave it at 22 the entire time,” Shepherd adds.
The company has six trial projects under way in the remote market, and he thinks it could yield significant growth (especially as climate heating and humidity intensify into southerly areas.)
Cities have bigger mould problems – not always recognised
Nason says the mould issue has been growing in cities too.
“There is probably an underlying unspoken issue at the moment with apartment buildings built in the last 10 years or so being quite airtight,” she says pointing to better quality windows and other construction improvements.
And though there’s been “no public announcement of any kind” mould issues have been brewing.
In the past 30 years or so in Europe and North America there’s been sick building syndrome, caused by air tightness without proper ventilation, she says.
In a tenancy handbook she was recently given for her own new home, four out of six pages related to instructions on how to keep mould out, which ran from controlling ventilation, leaving the extractor fan on most of the day, to not drying clothes indoors and so on. Nason noticed damage on the skirting board where “literally the water pours down the window in winter”.
She wondered what would happen if she was not aware of the risks.
“I just don’t think people realise that there’s a solution to it. We should be building our buildings to be much more future proof and set and forget. Landlords won’t need to worry.”
Can HVR compensate for poor air tightness?
But in places that are not well insulated can HRV systems fully compensate for poor indoor air?
Shepherd is circumspect. It’s a bit like “how long is a piece of string,” he says.
With remote accommodation for instance the business has been trying to get occupants to keep windows and doors shut.
But this is extremely difficult; occupants tend to resist encouragement to keep windows shut. The system can still work with an open window but then this allows dust and heat to enter, which affects the stability of the indoor air. And the objective is stable temperatures.
Nason says if the weather is good, why not open a window?
“But I can tell you, the vast majority of people in Queensland will be keeping their windows and doors shut when they’ve got the aircon on for half the year.”
HRV systems allow you to “bring in that fresh air, which your aircon system doesn’t, and also extract moisture.”
Heat recovery is often misunderstood
Nason explains that heat recovery works by pushing hot air back outside if it’s how and retaining heat inside if the temperature outside is cool, “but to a midpoint”.
If it’s 40 degrees outside then the system will settle at 30 degrees which is when you need that air conditioning to kick in. “So your aircon system isn’t having to work at such a big delta [the temperature difference between the air entering your system or return air, and the cooled air coming out or supply air].”
Future business
So what’s in store for Stiebel Eltron over the next three period or so?
Shepherd says the residential sector will be a good source of new business once it kicks up again and could reach 70 per cent of turnover, which is currently split between commercial and hot water and residential apartments.
A fillip will be when Victoria enacts its gas ban for new housing next year as this can be expected to also encourage replacement work.
A big focus will also be on building up the Asia Pacific work, especially through Benjamin Reul, head of strategic business development APAC. Japan is another hot spot for decentralised ventilation because of its high performing homes.
Shepherd’s background is automotive, later moving to Bosch and then Hitachi before joining Stiebel three years ago.
Nason is a trained architect. She worked with Frasers Property for five years and previously with Atelier Ten and also chipped in several years with Passive House Institute including as chair and non-executive director.
