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This study examines the global HVAC equipment industry. Demand for HVAC equipment is segmented by product, market, and global geographic region. Historical data (2010, 2015, and 2020) and forecasts for 2025 and 2030 are presented for HVAC equipment demand and shipments are presented in current US dollars (including inflation) at the global, regional, and country regions. Select products are also provided in units; however, unit demand does not sum to a total market size.
HVAC equipment discussed includes:
room air conditioners (both window units and through-the-wall air conditioners)
air source heat pumps (also known as conventional heat pumps), including split heat pumps and packaged heat pumps
geothermal heat pumps (including both ground source and water source types), which include closed loop and open loops systems
unitary air conditioners (including split, multi-split and single package units)
cast iron and steel types
district heating boilers, including large-scale boilers and series of large-scale central boilers that generate hot water to provide heat for an industrial complex or a densely populated urban area
warm air furnaces, also known as forced air furnaces
other HVAC equipment, including absorption chillers, dehumidifiers, humidifiers, liquid chillers, packaged terminal air conditioners, and room and zone heaters
Excluded from the scope of this study are:
portable versions of equipment such as air conditioners, heaters, dehumidifiers, and humidifiers
sanitary hot water heat pumps
heat pumps used to solely produce hot water, to heat pools, or to provide refrigeration
products associated with combined heat and power generation systems
ventilation systems, including air handlers and ductwork
fluid circulation systems, including radiators used with boilers
used and rental equipment
equipment used in vehicles
Data are further segmented by residential and nonresidential markets:
single-family detached houses
single-family attached houses (e.g., townhouses)
apartment or condominium buildings with multiple dwelling units
manufactured homes, which are housing units constructed on a permanent chassis with wheels for on-road transportation to the site at which the unit will be placed
institutional buildings (e.g., healthcare and educational facilities, religious establishments)
office and commercial structures (e.g., data centers, office buildings, retail establishments, hospitality facilities, warehousing and storage facilities not located on industrial sites, and other commercial structures such as banks and theaters)
industrial facilities (e.g., manufacturing plants and associated offices)
other nonresidential structures such as airport and bus terminals, recreational buildings, police stations, fire stations, and prisons
Housing units located in a structure whose primary purpose is something other than habitation, such as a small living space contained in a larger retail facility, are outside of the study’s scope.
Demand by Product
Through 2025, global demand for HVAC equipment is projected to rise 3.9% per year to $132 billion. Heat pumps are expected to achieve the strongest gains and account for the largest share of growth:
Sales of these products will be supported by diverse incentives and initiatives promoting heat pumps as eco-friendly and efficient comfort cooling systems.
In particular, heat pumps are gaining market share in European countries, as adoption of these products will help EU member nations to meet climate targets.
Room air conditioners are forecast to account for the second largest share of growth in value terms, and these products will remain the most widely used HVAC equipment type in unit terms. Sales of room air conditioners will be bolstered by market expansion in emerging markets like India, where the low price point of these models continues to be a major advantage.
Product demand trends vary across region, with sales dependent on a region’s:
level of economic development
preference for comfort cooling
building design trends
age of building stock
Heating equipment is generally viewed as a necessity, especially in colder climates, while comfort cooling is seen as more of a luxury or convenience in many nations.
Technology & Product Innovation
The increasing incorporation of sensors into HVAC equipment reflects recent efforts to improve the system efficiency and environmental friendliness of HVAC equipment. Sensor technology can be employed in combination with new or existing HVAC equipment in order to improve system efficiencies, reduce maintenance over the product’s useful life, and lower energy costs. For example, recent innovation efforts in the US have led to the incorporation of sensors into air conditioning technology to produce a movement-activated AC unit that reduces both energy and utility costs.
One example of HVAC equipment with sensor technology is Samsung’s
Wind-Free air conditioner, which has a motion detection sensor that switches the unit to an energy-saving mode if no movement is detected in the room after 20 minutes. Duel Fuel Technology
Research and development (R&D) efforts aimed at improving HVAC system efficiencies and environmental friendliness increasingly involve incorporating more than one fuel source into a single HVAC product. Various such HVAC technologies include:
dual-fuel heat pumps, which boast greater efficiencies and climate control due to the complementary use of an electric heat pump and a gas furnace
ice-powered air conditioning systems, a developing technology that currently provides up to six hours of cooling power in nonresidential buildings before requiring supplementation by a conventional commercial air conditioner
thermally driven air conditioning systems, a nascent, highly efficient technology that uses solar energy in combination with natural gas
Global demand for heating, ventilation, and air conditioning (HVAC) equipment is forecast to rise 3.9% per year to $132 billion in 2025. Growth will pick up relative to the 2015-2020 period as economies recover from the COVID-19 pandemic. The best opportunities exist:
in connecting pandemic-era heightened interest in indoor air quality with the upgrade of existing heating and cooling systems
for systems that offer improvements in energy efficiency or that use newer and more environmentally friendly refrigerants
in regions with still limited market penetration, either for economic or cultural reasons
where housing stocks continue to increase
India & Other Emerging Markets Face Challenges as Growth Picks Up
India is expected to be the world’s fastest growing national market for HVAC equipment, but the limitations of the nation’s electrical grid will continue to pose an obstacle to penetration of these products. In addition, the country is looking for ways to avoid exacerbating climate issues as use of HVAC equipment intensifies. One effort to address these challenges is the Global Cooling Prize, a program funded by the government of India to spur innovation in super-efficient residential HVAC systems.
In addition to India, a number of other South and Southeast Asian markets hold strong growth potential and face similar challenges. As these regions develop, suppliers who can introduce products that address their challenges will stand to benefit.
Heat Pumps Hold Strongest Growth Potential
Rapid growth in heat pump sales through 2025 will be fueled by their superior energy efficiency and strong environmental profile, which have both boosted consumer interest and positioned heat pumps to qualify for rebates and similar incentives programs.
The market for heat pumps has historically been concentrated in the Asia/Pacific region, as these products became the dominant type of HVAC equipment in Japan well before they achieved large-scale market penetration elsewhere. However, in recent years demand has grown particularly rapidly in Europe. While growth rates are expected to moderate as the market becomes increasingly established, heat pumps are expected to continue making strong market share gains in Europe through 2030, particularly in light of ongoing EU efforts to incentivize the installation of energy efficient HVAC systems.