North America Residential Unitary HVAC Market Size - By Installation (New Construction, Replacement/Retrofit), Mounting Type (Wall-Mounted Units, Ceiling-Mounted Units), Distribution Channel (Direct Sales, Indirect Sales), Product Type & Forecast, 2024 – 2032

North America Residential Unitary HVAC Market Size - By Installation (New Construction, Replacement/Retrofit), Mounting Type (Wall-Mounted Units, Ceiling-Mounted Units), Distribution Channel (Direct Sales, Indirect Sales), Product Type & Forecast, 2024 – 2032

North America Residential Unitary HVAC Market Size

North America Residential Unitary HVAC Market size was valued at USD 6.53 billion in 2023 and is anticipated to register a CAGR of 5.5% between 2024 and 2032. One of the most significant trends is the increasing adoption of energy-efficient HVAC systems. Homeowners and builders are increasingly opting for units that offer higher SEER (Seasonal Energy Efficiency Ratio) ratings, which indicates better energy efficiency. This trend is supported by government regulations and incentives promoting energy-efficient appliances.

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Consumers are becoming more conscious of their carbon footprint and are opting for systems with higher energy efficiency ratings, such as those with ENERGY STAR certifications. This trend is further fueled by government regulations and incentives aimed at promoting energy-efficient technologies. For instance, the U.S. Department of Energy estimates that ENERGY STAR certified products can save homeowners up to 30% on energy costs.  

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The rising demand for energy-efficient and sustainable cooling solutions is the primary factor boosting the North America residential unitary HVAC market growth. With an increasing focus on sustainability and energy efficiency, consumer behavior has changed significantly in the last several years. People are choosing unitary HVAC systems that offer comfort, energy efficiency, and minimal environmental impacts. According to the International Energy Agency, energy consumption for space cooling increased by over 5% in 2022 from 2021.

According to the U.S. Energy Information Administration, nearly 88% of U.S. households use Air-conditioning (AC).  The North America residential unitary HVAC market is experiencing a surge in demand, driven by emerging advancements in technology for unitary HVAC. These technologies are advancing energy efficiency, improving Indoor Air Quality (IAQ), enhancing user comfort, and expanding market opportunities. Unitary HVAC equipment can offer cooling, heating, or both. A direct expansion (DX) system is most commonly used for cooling, while heating can be delivered by a variety of systems including gas (natural or propane), electric resistance, and heat pump (air-to-air).

Furthermore, developments in building automation technology have resulted in new unitary HVAC products that can optimize energy use through real-time data analysis. These sophisticated controls continually monitor elements such as occupancy, outdoor temperatures, and humidity levels, adjusting HVAC operation to maximum economy while preserving comfort.

The energy shortage and crises across North America are emerging as major challenges for the North America residential unitary HVAC market. According to the U.S. Energy Information Administration, two-third of North America is at risk of energy shortfalls in summer during periods of extremely high electricity demand. In summer, electricity demand increases as temperatures rise and homes and businesses turn up the air conditioning to cope.

Above-normal summer temperatures further push up the demand and can reduce electricity supply if power plant outages or reduced output stem from heat-related issues. In addition, widespread heat waves can limit electricity transfers as electricity is needed to meet the local demand. The combination of higher electricity demand and reduced supply can cause energy shortfalls.

North America Residential Unitary HVAC Market Trends

In recent years, there has been an increased emphasis on energy-efficient HVAC systems. This involves the use of high-efficiency equipment including variable speed compressors and condensers, which not only save energy but also minimize electricity expenses. Additionally, people are more conscious of the value of clean air in their homes and workplaces.

As a result, there is an increasing need for HVAC systems capable of efficiently filtering contaminants and improving indoor air quality. In response to recent trends, residential unitary HVAC products manufacturers are constantly looking for ways to innovate and offer advanced unitary HVAC products for residential applications. One of the key strategies adopted by these businesses is the launch of new products and services.

For instance, in June 2024, Bosch Home Comfort Group, a unit of German industrial conglomerate Robert Bosch GmbH, introduced new water source heat pumps intended for use in both new buildings and renovation projects. Additionally, the product is available with both vertical & horizontal cabinets, use R-454B as a refrigerant, and rely on water coil & air coil freeze protection.

Additionally, in January 2024, LG Electronics (LG) unveiled its latest HVAC solutions at AHR Expo 2024. LG latest HVAC solution includes the R32 air-to-water heat pump and furnace, and the Multi F heat pump, both designed for residential applications. LG’s R32 air-to-water heat pump, which employs the low Global Warming Potential (GWP) refrigerant, R32. Meeting the latest refrigerant standards, R32 contributes to the solution’s ability to deliver a reliable heating performance at low temperatures.

North America Residential Unitary HVAC Market Analysis

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The market by product type is segmented into air conditioning equipment, ducted heat pumps/ packaged terminal heat pumps (PTPHS), variable refrigerant flow (VRF) systems, packaged heating & cooling unit, and others such as air handlers, gas furnaces, evaporator coils, etc. The air conditioning equipment segment dominated the market, generating a revenue of USD 3 billion in 2023 and is projected to reach USD 4.9 billion by 2032.

The split air conditioning (AC) systems segment, including both ducted and ductless units, continues to dominate the North America residential unitary HVAC market. According to a report by Freedonia Group, the demand for split AC systems in the U.S. is projected to grow at an annual rate of 4.2% through 2024, driven by factors such as new housing construction and the replacement of older, less efficient units. The increasing popularity of ductless mini-split systems, particularly in urban areas and renovations, is also contributing to this segment's growth.

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Based on the installation type the North America residential unitary HVAC market is classified into new construction and replacement/retrofit. The new construction segment dominated the market, generating a revenue of USD 4.1 billion in 2023 and is poised to cross USD 6.3 billion by 2032, driven by the burgeoning housing market.

This growth reflects the increasing focus on energy efficiency in modern building codes and the desire of homeowners for advanced climate control systems from the get-go. Manufacturers are responding by developing HVAC units specifically designed for new construction, often featuring high-efficiency ratings and smart technology integration. For instance, high-efficiency HVAC systems with SEER ratings of 16 or higher are increasingly being specified in new residential constructions.

New construction projects have traditionally been a significant driver of demand in the residential HVAC market. The trend in new construction installations is closely tied to housing starts and overall construction activity.

According to data from the U.S. Census Bureau, housing starts in the U.S. reached 1.55 million units in 2023, highlighting a robust market for new residential buildings. This trend is expected to continue, with new construction accounting for a substantial portion of the North America residential unitary HVAC market. A study by AHRI (Air-Conditioning, Heating, and Refrigeration Institute) estimates that approximately 60% of HVAC equipment sales in the residential sector are attributed to new construction projects.  

Based on the distribution channel the North America residential unitary HVAC market is categorized into direct sales and indirect sales. Indirect sales dominate this market, accounting for 69% of the market share in 2023, and is slated to surpass USD 7 billion by 2032. Indirect sales channels involve manufacturers selling their products through a network of distributors, wholesalers, and HVAC contractors. This approach offers wider market reach and often translates to more competitive pricing for consumers.

Within the indirect sales channel, the wholesale distribution network plays a crucial role. HVAC equipment wholesalers and distributors have established robust logistics and supply chain networks, enabling them to efficiently reach contractors, installers, and retailers across North America. A report by the Heating, Air-conditioning & Refrigeration Distributors International (HARDI) revealed that the combined sales of HVAC equipment and supplies by its member distributors in the U.S and Canada reached $55.6 billion in 2021.

Additionally, contractors and installers are critical partners in the indirect sales channel, as they often serve as the primary point of contact for homeowners seeking HVAC system installations or replacements. Manufacturers and distributors actively cultivate strong relationships with local contractors and installers through training programs, marketing support, and incentives. According to a survey by the Air Conditioning Contractors of America (ACCA), over 80% of residential HVAC installations in North America are carried out by professional contractors or installers.

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The U.S. dominates the North American residential unitary HVAC market, accounting for 69.6% in 2023. This dominance is primarily driven by the sheer size of the U.S. population and its diverse climate zones.  Warmer southern regions naturally experience a higher demand for air conditioning, while colder northern areas require efficient heating solutions. This variety fuels a market for a wider range of HVAC system types. The residential unitary HVAC industry in the U.S. is robust and dynamic, driven by several key trends. Firstly, there is a strong emphasis on energy efficiency.

The U.S. Department of Energy (DOE) has implemented stringent energy efficiency standards for HVAC systems, which has led to increased adoption of higher SEER-rated units. The residential construction sector and existing home sales play a crucial role in shaping the demand for HVAC systems in the U.S. market.

According to data from the U.S. Census Bureau, new privately-owned housing starts in the country reached 1.55 million units in 2022, representing a 3.8% increase from the previous year. Additionally, the National Association of Realtors reported that existing home sales in the U.S. totalled 6.12 million in 2022, indicating a strong demand for HVAC replacements and upgrades.

While smaller in comparison to the U.S. market, the Canadian residential unitary HVAC market is also experiencing steady growth. The Canadian residential HVAC market was valued at $1.98 billion in 2023 and is projected to reach $3.3 billion by 2032, growing at a CAGR of 5.7% during the forecast period. This growth is driven by factors such as the replacement of aging HVAC systems, increasing emphasis on energy efficiency, and government incentives for energy-efficient home renovations.

North America Residential Unitary HVAC Market Share

The North America residential unitary HVAC industry is moderately fragmented, with the presence of prominent players such as Daikin Industries Inc., LG Electronics, Lennox International, Hisense HVAC equipment Co., Ltd., and Trane Technologies. These players hold a market share of 28 – 30% collectively. Manufacturers are adopting strategic steps, such as mergers, acquisitions, partnerships, and collaboration, to meet the growing consumer demand and consolidate their position in the market.

For instance, in April 2024, Carrier Global Corporation announced that its venture arm, Carrier Ventures, is heading an investment and technology partnership with Strategic Thermal Labs (STL). Through this collaboration, Carrier aims to harness STL's innovative technology to develop a liquid cooling solution for data centers. Furthermore, in March 2024, Daikin Comfort Technologies North America, Inc., a Daikin group manufacturer based in the US, donated 88 HVAC systems to support a temporary housing project in west Maui, which was severely impacted by the 2023 wildfire.

North America Residential Unitary HVAC Market Companies

Major players operating in the North America residential unitary HVAC industry include

• Carrier Group
• Daikin Industries Inc.
• Danfoss A/S
• GREE Electric Appliances, inc
• Haier Group
• Hisense HVAC equipment Co., Ltd.
• Johnson Controls Plc
• Lennox International
• LG Electronics
• Midea Group
• Mitsubishi Electric Group
• Panasonic Corporation
• Rheem Manufacturing Company
• Robert Bosch GmbH
• Trane Technologies

North America Residential Unitary HVAC Industry News

• In June 2024, Bosch Home Comfort Group, a unit of German industrial conglomerate Robert Bosch GmbH, introduced new water source heat pumps intended for use in both new buildings and renovation projects. Additionally, the product is available with both vertical & horizontal cabinets, use R-454B as a refrigerant, and rely on water coil & air coil freeze protection.
   
• In March 2024, Trane Technologies announced its new residential product portfolio with innovative design upgrades to its highly efficient heat pumps and air conditioners, including next-generation refrigerant with 78% less global warming potential (GWP). Designed for even higher efficiency, the company’s re-engineered products will enable homeowners to meet their heating and cooling needs while reducing their energy costs and carbon footprints.
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• In March 2024, Mitsubishi Electric Trane HVAC US LLC announced the launch of Premier Wall-mounted Indoor Units (MSZ-GS/MSY-GS), an update to the former models (MSZ-GS/MSY-GL). The Premier Wall-mounted Indoor Units can heat or air-condition any residential room. They are compatible with single-zone and multi-zone heat pump outdoor units, including both single- and multi-zone Hyper-Heating INVERTER® (H2i®) units. It is a single-zone, cooling-only air conditioner for climates where heating is unnecessary.
   
• In January 2024, LG Electronics (LG) unveiled its latest HVAC solutions at AHR Expo 2024. LG latest HVAC solution includes the R32 air-to-water heat pump and furnace, and the Multi F heat pump, both designed for residential applications. LG’s R32 air-to-water heat pump, which employs the low Global Warming Potential (GWP) refrigerant, R32. Meeting the latest refrigerant standards, R32 contributes to the solution’s ability to deliver a reliable heating performance at low temperatures.

The North America residential unitary HVAC market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD Million) and volume (‘000 Units) from 2021 to 2032, for the following segments

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Market, By Product Type

• Air Conditioning Equipment
  • Split AC (Ducted)
  • Window AC (Ducted)
• Ducted Heat Pumps/ Packaged Terminal Heat Pumps (PTHPs)
• Variable Refrigerant Flow (VRF) Systems
• Packaged Heating & Cooling Unit
• Others (Air Handlers, Gas furnaces, evaporator coils, etc)

Market, By Installation

• New Construction
• Replacement/Retrofit

Market, By Mounting Type

• Wall-Mounted Units
• Ceiling-Mounted Units

Market, By Distribution channel

• Direct sales
• Indirect sales

The above information is provided for the following countries

• U.S.
• Canada