HVAC maker Daikin opens North Bay hub in bid to speed California heat-pump adoption

One of the largest makers of heating, ventilation and air-conditioning systems has opened a North Bay distribution hub. The Japanese company is ramping up to meet California’s challenge to dramatically improve energy efficiency for heating and cooling homes and buildings in the next five years.

New branch locations in Rohnert Park and Livermore in the East Bay are among 10 Daikin plans to have open by the end of this year, bringing its presence in the Golden State to 55 sites, according to spokesperson Ben Trounson.

Greg Newell leads the four-employee starting team in the 26,332-square-foot branch that opened in late May at 201 Business Park Drive in Rohnert Park.

Other branches set to open in the Bay Area later this year include two in San Jose and one in Morgan Hill. In Southern California, three each are set to open in the San Diego and Los Angeles areas.

Daikin is the world’s largest producer of AC systems, according to market research firm Fuji Keizai. Net sales were 4.4 trillion yen ($30.3 billion) in fiscal 2023, ended May 10 of this year.

On May 30, the company announced a five-step plan to meet the Golden State’s goal of installing 6 million new heat pumps by 2030. Heat pumps work like refrigerators and air conditioners but in two directions, moving heat from a hot house outside and heat from outside in on cold days.

Daikin is among the 10 makers, distributors and suppliers of building heating and cooling systems that signed onto the California Energy Commission’s pledge in October of last year.

One of Daikin’s commitments is increasing local production capacity so it could provide 1 million heat pumps to the state. The new branch locations and some with training centers for contractors are also among the commitments. The forthcoming Morgan Hill facility is set to have the Bay Area training center, Trounson said.

When bans on natural gas appliances, namely furnaces, started rolling across California in the past few years, HVAC contractors started getting calls from consumers about converting to heat-pump systems, the Business Journal reported. But in recent months, jurisdictions have been rolling back or reworking those restrictions after a settlement of a lawsuit against Berkeley.

But one barrier contractors said to inquiries turning into jobs has been high cost for installing heat-pump systems, as much as $11,000 for a ductless system (reusing existing ducts) for a two-bedroom home.

Trounson said a challenge with addressing the cost of heat-pump systems is selecting the right configuration (such as ducted, ductless or dual fuel).

And a major reason for ongoing higher operational costs of heat-pump systems is when an auxiliary electric heater is added, Trounson said. That may be needed as fall and winter outside temperatures fall too low to keep the indoors warm without help. But few climate zones in Northern California need that, Trounson said.

“When replacing an electric or fossil fuel heating system, Daikin inverter heat pumps can be 3-4 times more efficient in heating, compared to non-inverter systems,” Trounson wrote in an email.

Daikin’s Rohnert Park lease plus a deal with Red Bull Distributing filled up the remainder of the 69,550-square-foot LogistiCenter warehouse project that Dermody Properties completed in 2021. Daikin was represented in the Rohnert Park deal by Joseph Cooper of SRS Industrial.

Daikin also recently leased 85,000 square feet in a Dermody LogistiCenter in Reno, Nevada.

Jeff Quackenbush covers wine, construction and real estate. Reach him at jquackenbush@busjrnl.com or 707-521-4256.

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