Theme this issueThe tailwinds are normalizing. HVAC deal multiples have cooled from their 2021–23 peak, the $2,000 federal HVAC/heat-pump tax credit is gone, and Google is about to move Local Services Ads onto a new platform. None of that shrinks the demand — aging homes and summer heat keep the phone ringing — but it does move the 2026 edge from riding the wave to out-executing on response speed, financing, and retention.
Story 1
Google is moving Local Services Ads into Google Ads — the standalone LSA dashboard is going away
Migration begins August 2026 · TechWyse & Search Engine Roundtable
Google is retiring the separate Local Services Ads dashboard and folding LSA into the main Google Ads platform as a specialized pay-per-lead Performance Max campaign type. Rollout starts August 2026 for US home and storefront services (HVAC, plumbing, electrical), expands late 2026, and reaches non-US accounts in 2027. What stays: pay-per-lead pricing, Search + Maps only placement, category-based (keywordless) targeting. What changes: manual bidding and vertical-level Target CPA go away, budgets shift from weekly to daily, BBB callouts are dropped, and past performance reports don't transfer — you must export them before your migration date. Advertisers get 14 days' notice before their account moves.
Why it matters: This is a bigger change than July's verification-requirement update. Two action items with a real deadline: (1) export your full LSA lead and performance history now, before the switch erases it, and (2) expect a ~2-week re-stabilization after migration, so don't judge lead flow in the first fortnight. If you run multiple services at different lead costs, plan to split them into separate campaigns since vertical-level Target CPA is disappearing.
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Story 2
HVAC M&A has cooled — multiples are down a third from their peak
HVAC Services M&A Update, July 2026 · Capstone Partners
The frothy-market framing needs updating. Capstone counts 92 HVAC transactions YTD 2026, down 4.2% year-over-year, with average valuations of 2.0x revenue / 9.5x EBITDA for 2024–YTD 2026 — well below the 2021–23 averages of 2.3x / 13.3x. Add-on acquisitions now dominate (PE add-ons alone are 41% of deal volume), and public strategic buyers more than doubled their activity (11 deals vs. 5 a year ago). Recent deals include Blackstone-backed AIR Control Concepts / Technical Air Systems and Ferguson / New England Applied Products.
Why it matters: The "PE is paying up" story from earlier issues is now "PE is still buying, but pricing has come back to earth." Sellers banking on 2022-style multiples should reset expectations — the premium hasn't vanished, but it's compressed. The lever that still commands a premium is unchanged: recurring maintenance revenue and geographic density. Buyers are being pickier, and add-on-to-a-platform is where most transactions are happening.
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Story 3
Correction to watch: the $2,000 federal HVAC/heat-pump tax credit expired Dec 31, 2025
Section 25C repeal under the 2025 budget law · HVAC Base & Paschal
Earlier issues suggested surfacing the $2,000 federal heat-pump credit to soften install quotes — that lever is now gone. The Section 25C Energy Efficient Home Improvement Credit (up to $2,000 for qualifying heat pumps, plus the smaller equipment credits) expired for anything installed after December 31, 2025 under the 2025 budget reconciliation law. There is no federal replacement in 2026; what remains are state and utility rebates, which vary widely by market.
Why it matters: If your CSR scripts or quote templates still reference "the $2,000 federal tax credit," they're now quoting a benefit the customer can't get — a trust risk at exactly the wrong moment. Scrub that line, and replace it with the specific state/utility rebate and financing options available in your service area. Financing (not tax credits) is now the primary tool for closing high-ticket installs against sticker shock.
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Story 4
Aging homes are driving demand — but affordability caps the scope
2026 Home Services Spending Survey · Housecall Pro (via Contracting Business)
Fresh consumer data: 69% of homeowners live in homes over 20 years old and 72% plan to stay long-term, so they're maintaining rather than moving. 79% plan to repair or replace at least one major system in 2026 — plumbing (28%), appliances (25%), exterior (23%), HVAC (20%), electrical (18%), roofing (14%) — and over half expect to spend $3,000+, a third over $7,500. But the affordability squeeze is real: 77% say rising costs shrink or delay projects, 68% get extra quotes when pricing surprises them, and 62% are more likely to proceed when financing is offered. The standout: 72% would pay premium rates for 24-hour emergency resolution.
Why it matters: Demand isn't the problem — conversion is. Three levers move the needle with this exact customer: same-day/24-hour response (they'll pay up for it), financing on every quote over ~$3K, and transparent up-front pricing so you're not the one they're getting a second quote to beat. Aging-system replacement is a steady, non-discretionary pipeline; the winners are the shops that make saying yes easy.
Sources (1)
Story 5
ServiceTitan: 74% of residential contractors call AI key to efficiency — but only ~25% actually use it
2026 Residential State of the Trades Report · ServiceTitan (1,000 contractors, via Thrive Analytics)
74% of residential contractors now see AI as an efficiency engine and 73% believe early adoption is a competitive advantage — yet only about 25% are using it today, leaving a wide adoption gap. Early adopters report real results: 48% higher productivity, 45% time savings, and one featured shop routes 30% of bookings end-to-end without human intervention. The strategic shift is toward "execution-led growth": 66% name revenue growth the top priority, 53% prioritize retention over new-customer acquisition, and 60% flag labor and overhead as the biggest margin risks. Over half already respond to new leads within an hour.
Why it matters: The gap between "believe in AI" and "use AI" is the opportunity — the barriers cited are trust, cost, and uncertainty, not staff resistance. The clearest first win remains automating the phone and estimate follow-up. And the quieter headline is the retention-over-acquisition pivot: with acquisition costs high, protecting the customers you have (membership plans, proactive follow-up) is where operators are placing their chips.
Sources (1)
Story 6
Roofing: Q1 2026 claims volume fell — but the claims that remain are harder
Q1 2026 roof damage & insurance claims analysis · Loveland Innovations
For roofers and storm-restoration shops: US property claim volume was down 8.9% year-over-year in Q1 2026, with hail claims down 23.6% (2"+ hail impacts down 59%) as a quieter storm season held down easy volume. But water damage was the single largest loss category at 31.1% of all claims, reconstruction costs rose 3.4% YoY, and average claim severity stayed elevated — "fewer claims doesn't mean simpler claims."
Why it matters: A soft hail quarter means the spray-and-pray storm-chasing model has less to chase, while insurers scrutinize the complex claims that remain harder. The edge shifts to documentation quality — detailed, defensible inspection reports that get complex claims approved and paid. For diversified shops, water intrusion and aging-roof replacement are the steadier pipeline than waiting on the next big hail event.
Sources (1)
Story 7
The labor math keeps getting tighter — 2.1M unfilled trades jobs by 2030
Skilled trades shortage analysis · JLL
The workforce constraint behind every other trend: JLL projects 2.1 million skilled-trades positions unfilled by 2030. Roughly 600,000 trades jobs are posted annually against only ~150,000 new workers entering through apprenticeships — and for every 5 retiring workers, just 2 replacements arrive. The Department of Education pegs the potential hit at $1 trillion in annual economic losses. Demand keeps climbing: electrician roles are projected to grow 9.5% and HVAC techs 8.1% through 2034, both far above the 3.1% national average.
Why it matters: You can't out-hire this shortage, so the response is structural: automate the back office and dispatch so your existing techs spend more billable hours in front of customers, invest in retention (the tech you keep is cheaper than the two you can't hire), and treat your own apprenticeship pipeline as a growth asset, not an afterthought. Labor scarcity is exactly why the AI and response-speed themes above keep resurfacing — they're how understaffed shops still grow.
Sources (1)
This issue's to-do list
Do this before month end
- Export your LSA history now — pull all lead and performance reports before Google's August platform migration erases them, and prep to split multi-service accounts into separate campaigns.
- Kill the "$2,000 federal tax credit" line — it expired Dec 31, 2025. Replace it in scripts and quotes with your local state/utility rebates plus financing.
- Make "yes" easy on every $3K+ quote — financing offered up front, transparent pricing, and a 24-hour emergency option customers will pay a premium for.
- Pick one AI win aimed at retention — call answering or estimate follow-up frees techs for billable work and protects the customer base that's now cheaper to keep than replace.
Compiled July 27, 2026. Figures reflect the cited sources; verify current pricing, regulations, rebates, and platform terms before acting.