HVACR industry is moving towards sustainability

System’s efficiency, cost-effectiveness and sustainability, IoT, sensors and HVAC software communication will be in much use.

Inching towards a new normal, the markets have become more innovative in generating ideas how to deal with indoor and outdoor environments due to inching towards new normal. The changes in designs and equipment is being felt more of need and necessity dealing with health, hygiene and improving air quality. The residential market has been the strongest performer since the pandemic started. 

The year 2022 is going to witness a positive outlook for the HVAC business. In addition, the market is expected to experience healthy growth owing to refurbishment and replacement demand. There is demand for replacing old equipment with new energy-efficient units for energy savings, improved performance, and cost reduction. The sales of cooling systems are on the increase due to the rising temperature on account of global warming and rising disposable income of people. 

The market for sensors and automatic control components and applications including trouble shooting through more advanced systems is increasing. Awareness about the impact of the indoor environment on the way people think, feel, and act has triggered the trend of building wellness, thereby impacting the growth of HVAC services in offices, hotels, and other commercial spaces. Services for HVAC systems installed in commercial buildings are being developed to provide full-time on-site operation staff and energy consulting services. This will reduce operational costs and improve the overall HVAC performance in buildings. 

Trends in everything from sustainability are moving in a positive direction for the industry. The expectations of industry experts also sounded an optimistic note about the future of HVACR. Laying foundation to reform the economy, Union Budget 2022 laid focus upon environment friendly and other sustainable technologies. The latest budget also is a strong testimony of the infrastructure push that the government is planning. 

Infrastructure growth and urbanisation 

Infrastructure growth would boost the demand for air conditioning, refrigeration and ventilation system inside the buildings, thereby facilitating rapid growth of HVACR Industry in India. Voicing his opinion, Mr. Pravin Rawool, AVP & Business Head, Godrej MEP remarked, “Rapid urbanisation, growing infrastructure based developments, rising incomes and technological advancements are expected to positively influence India’s HVAC market in the coming years.” This statement is supported by a plan for the future, specifically in the areas of infrastructure. Adding to it, Mr. Rajesh Adhangale, BDM – Building Automation, Beckhoff Automation Pvt. Ltd., said, “Residential and Commercial infrastructure sector in India is set for a massive growth and predicted to become world’s one of the fastest growing sector by 2025. The major driver for the residential and commercial infrastructure sector is the urbanisation rate.” 

The increase in the population of commercial and residential complexes, retail infra and office spaces in the country is expected to lead to the growth of the need for HVAC systems. Economic Resilience is visible to all. Continuing that the recent economic indicators across various Sectors have shown robustness, Mr. Suraj Ferkhi, General Manager – Sales & Marketing, Ecomax Solutions Pvt. Ltd., said, “The recent budget, Governments PLI scheme, Infrastructure push further complements growth of HVACR Industry.” Complementing further, Mr. Dipankar Bhattacharya, Country General Manager –India, DB-Aire India Pvt. Ltd., remarks, we are seeing exponential growth in urbanisation and also infrastructure growth is very heartening. “The latest budget also is a strong testimony of the infrastructure push that the government is planning,” he adds. 

With that in the horizon, the investment cycles will be back for large corporate as well. Factors like demographic dividend, industrial growth will also fuel the demand for air-conditioning and refrigeration. It looks like we have a long runway ahead of us as far as HVACR markets are concerned. 

Government and corporate spending on infrastructure continues unabated. Several Tier 3 and 4 towns are seeing rapid urbanisation and a booming of HVACR industry Mr. Vikram Murthy, Director, UNIVAC Environment systems Pvt. Ltd., opines, “Residential demand for air conditioners is booming and will continue to accelerate from the present annual demand of 7 million to a projected 40 million in 2 decades.” 

Studies suggest that the Indian heating, ventilation, and air conditioning (HVAC) market was $8,526.7 million in 2019 and is expected to grow to $31,598.6 million by 2030. That is a CAGR of 16 percent during the forecast period. Ever since the pandemic hit, the industry has been facing challenges both from a demand and supply standpoint. Mr. Murthy opined, the Pandemic has altered the shift of emphasis from all imports to all local in the HVAC industry. 

The outlook for HVACR has never been so good, as the pandemic is slowly shifting into an endemic. “As technology and innovation take centre stage across organisations in India, with the economy slowly coming back to pre-pandemic conditions, supply chains that were disrupted are now getting back to normal operations. And things are looking brighter for the HVAC industry,” said Mr. Ashok Yadav, Director – Product Management (Thermal Management), Vertiv India, reacted, HVACR industry is bound to grow as India modernises, and the aspirations of the middle-class increase. We seek comfortable work environments, both in summers and winters. This means increased cooling for tropical countries like India, according to Mr. Samit Jain, Managing Director, Pluss Advanced Technologies. Moreover, IT infrastructure plays a crucial role in ensuring a smooth digital transformation, be it any industry. We continue to see a steady growth of HVACR industry in some of the key sectors of Data centres such as hyper scale’s and server rooms data hall, hospital, pharma manufacturing and other Industrial applications said, Mr. Sandeep Vasant, Head of sales, service and business developmentIndia, FlaktGroup India. 

In 2022, there is an increasing demand for energy-efficient HVAC systems for reducing energy consumption, carbon emissions and increasing demand for energy-saving products will be more in demand than ever. Mr. Gaurav Kumar, Partner, MG Cooling solutions says the HVACR market is experiencing remarkable growth in recent years; it is getting bigger, smarter and is predicted to achieve a 13 percent growth by 2028. “The main sustainable elements that are increasingly incorporated into HVAC systems are: Developing HVAC systems that minimise heat loss or leaks and enable less energy consumption for customers.” Adding further, Mr. Rawool said, extreme climatic conditions and growing construction activities, coupled with various government initiatives & commitments (like those made recently at COP26) aimed at improving energy efficiency are some of the other major factors expected to boost India’s HVAC market in 2022. Due to the rampant environmental concerns, the HVAC industry has moved towards low carbon intensity, lesser fuel and electricity, giving rise to the demand for energy-efficient equipment in the HVAC market. 

Also, the Budget is consistent with our PM Narendra Modi’s vision of making India Atmanirbhar: a digital superpower, a sustainability leader and a healthy nation. Noting on indigenous manufacturing, Mr. Murthy says, this is both a benefit to existing manufacturers and an opportunity to new entrants. However the HVAC business opportunities will benefit local manufacturers as well as manufacturers of innovative products including efficient evaporative coolers and BLDC motor driven circulation fans amongst a host of other passive and natural technologies including insulation and ventilation. Expected strong regulatory measures by the Bureau of Energy Efficiency (BEE) will benefit manufacturers of very low energy room air conditioners including the winners and shortlisted entrants of the recently concluded Global Cooling Prize. Mr. Sandeep Jaisinghani Managing Director Ecoair Cooling Systems Pvt. Ltd., said that there exists an opportunity to explore bigger markets and gain momentum to march towards expansion in the industry with focus on clean air and quality. 

Clean air and ventilation in buildings 

Weak respiratory system is bound to make the human body sick, in the same way absence of or non-functional/ underperforming HVAC equipment is sure to negatively impact the health of a building, its occupants and result in rapid wear and tear of equipment and machinery. Mr. Adhangale said, “I always feel that any infrastructure building mechanism is very much similar to a human body. The way the human body respires, the same way buildings also breathe. Modern buildings possess machinery and equipment and higher occupancy. These factors release huge amounts of heat and harmful gases and tend to inhale oxygen and fresh air from surroundings. Building Air conditioning and Ventilation system is as important as the human respiratory system.” 

In a nutshell, the health of building occupants and machines is directly proportional to an efficient building air conditioning and ventilation system. Mr. Jaisinghani says, the HVAC industry has been growing at a steady pace and the demands have been growing at a rapid pace. To provide ergonomic work facilities, a properly designed and installed HVAC system can provide comfort to employees and it also lowers energy bills and optimises water consumption. In today’s scenario where every human being is striving to protect himself and his family from Covid, supply of fresh, cool and clean air, HVAC systems are the need of the hour. 

Going forward, more digitalization and automation technologies are needed in the HVACR industry. Automation technologies use the systems’ own data collection and intelligence to manage HVAC systems without needing users to act. 

Newer technologies for future 

The HVACR market was adversely impacted by the Covid-19 pandemic in the last 2 years which slowed down the expansion of commercial building and Malls and that is set to grow with increasing adoption of technology integration into HVAC systems. Mr. Yadav is of the view that the data centre cooling will revolve around energy optimisation and adoption of disruptive technologies. 

In 2022, some of the things HVAC players could look forward to are an increase in software automation and adoption of Internet of Things (IoT) to gather data from their systems and enable them to innovate their product portfolio accordingly. With several sectors looking to adopt more sustainable business strategies, it will be crucial for HVAC systems to be smart and more energy efficient to ensure they align with their customers’ evolving requirements. Mr. Kumar feels, selecting materials and technical parts that reduce the system’s overall carbon footprint in order to improve the systems’ efficiency, cost effectiveness, and sustainability IoT, sensors and HVAC software communication will be in much use. 

We continue to see a steady growth of HVACR industry in some of the key sectors of data centres such as hyper scale’s and server rooms data hall, hospital, pharma manufacturing and other Industrial applications remarks Mr. Vasant. Adding further he says, with the Key result area of most of the organisation driving towards sustainability, health and wellbeing we could see a lot of SMART and Innovative HVACR solution as well in FY 2022 onwards. 

Mr. Jain remarks, the demand for refrigerated ready to cook foods will also increase, as more nuclear families emerge and women increasingly start to work outside home. Delivery of temperature controlled medicines, pharmaceuticals, vaccines and food – are all set to increase, putting pressure to increase energy availability. Thermal storage – that encourages storing of excess heat and cold will grow manifold. HVACR technologies for food processing as well as in electric vehicles for thermal management of li-ion batteries will see a surge. The focus on electric vehicles has increased focus on the need to maintain temperatures in a more sustainable manner. Newer technologies for solar powered thermal heating in the North-East and J&K will also see a rise. 

Customers in today’s circumstances are increasingly willing to adopt new, non-explored technologies without any hesitation. We anticipate that there will be an increase in hybrid technology adoption by customers along with a heavy reliance on data for optimisation. Mr. Jaisinghani remarks, HVAC systems of the future will use technologies such as IoT based applications, solar power, smart thermostats and higher efficiency motors components to reduce their energy use and overall environmental impact. Newer technologies, for agriculture and climate technologies that enable refrigeration will see a phenomenal rise.