HVAC industry trends indicate a shift towards smart features and energy efficiency

The HVAC System market is projected to expand at a compound annual growth rate of 6.3 percent from 2022 to 2030.

The HVAC industry is gradually shifting focus on energy efficiency. Green initiatives are the focus area for several OEMs with an emphasis on saving money while reducing greenhouse emissions. Therefore, over recent years, there has been a shift toward eco-friendly HVAC units. Varied climatic conditions and the need to maintain an ambient environment in a building are crucial trends expected to impact the market over the forecast period. Customer inclination towards comfort is creating avenues for growth.

The availability of smart features and energy efficiency has recently been vital purchase criteria for most customers. The trend is expected to gain traction over the next few years. Over the last few years, the use of geothermal cooling and heating equipment has been on the rise, reducing dependence on fuel-based equipment.

Growth prospects
The global HVAC systems market size was valued at USD 136.3 billion in 2021. It is projected to expand at a CAGR of 6.3 percent from 2022 to 2030. The supply chain shortages amidst the pandemic impacted the market for HVAC systems in 2020. In the Asia Pacific, the market for HVAC systems is anticipated to witness healthy growth over the mid-term. An increase in multi-family and individual homeowners is creating avenues for future growth. The shifts toward eco-friendly HVAC units include products that consume less power and operate on renewable energy sources, thereby reducing energy costs.

OEMs are developing products that are not just energy-efficient but also incorporate the latest technologies offering better connectivity to meet the demand. Today buildings constructed are “green” increasing installations of thermostats, sensors, and smart meters that can be controlled from a smartphone or PC. The software-enabled HVAC systems are also trending and are expected to create opportunities over the forecast period. Technology is slowly making inroads in the HVAC field, creating favourable long-term growth avenues.

Cooling and heating segment
According to the data published by the International Energy Agency (IEA), cooling accounts for over 10 percent of the world’s electricity consumption. The statistics are enormous and explain why the cooling segment has dominated the HVAC equipment market. Growing population and disposable incomes, particularly in the hotter regions globally, have instigated the usage of air conditioners, subsequently favouring the demand for cooling systems such as air conditioners (AC), unitary ACs, etc. The cooling segment from 2022 to 2030 is projected to grow at an approximate CAGR of 6 percent.

Apart from cooling, heating is also a major segment exhibiting gradual growth over the years. As of 2021, the segment captured over 20 percent market share. Over the long term, the segment is projected to gain traction as the market gradually transitions from a fuel-based working model to efficient low-carbon solutions. Further, the proliferation of solar-based heat pumps will create avenues for segment growth over the forecast period.

In developed parts of the world, the demand for residential HVAC is expected to be more or less stagnant; however, the demand from newer markets, particularly developing markets, will be slightly on a higher end. This is primarily ascribed to the growing population in emerging markets and market maturity in developed markets. Commercial HVAC space offers enormous opportunities for growth. The segment is projected to witness a CAGR exceeding 6 percent in the market for HVAC systems from 2022 to 2030. Several trends, including green and smart technology to automated systems, are expected to play a pivotal role in shaping the future of the commercial HVAC market.

Regional outlook
Asia Pacific dominated the HVAC systems market and accounted for a revenue share of over 40 percent in 2021. Increasing urbanisation, growing population, and increasing consumer disposable income are key success factors to the region’s tremendous growth over the years. The commercial sector has been growing lately, creating prospects for future regional growth. North America, closely followed by Europe, was the second-largest consumer of HVAC systems in 2021. The HVAC system market has reached maturity; however, replacement sales due to ageing infrastructure or retrofit projects are creating alternate revenue streams for OEMs apart from expansion into the services and maintenance category. The region is anticipated to witness a CAGR exceeding 5.5 percent over the forecast period.

Prominent players
Apart from growing the company’s size and reach, market players emphasise R&D to develop technologically advanced and differentiated products to gain a competitive edge. Some prominent HVAC systems market players include Carrier Corporation, Daikin Industries, Emerson Electric Co., Hitachi Ltd., Johnson Controls International plc, Lennox International, Inc. and Trane Technologies.

Reference: www.grandviewresearch.com