HVAC Market - By Product Type (Heating Equipment, Ventilation Equipment, Air Conditioning Equipment, Chillers, Cooling Towers), By End Use (Residential, Commercial, and Industrials), By Installation, By Distribution Channel & Forecast, 2024 – 2032

HVAC Market - By Product Type (Heating Equipment, Ventilation Equipment, Air Conditioning Equipment, Chillers, Cooling Towers), By End Use (Residential, Commercial, and Industrials), By Installation, By Distribution Channel & Forecast, 2024 – 2032

HVAC Market Size

HVAC Market was valued at around USD 294 billion in 2023 and is anticipated to register a CAGR of 5.6% between 2024 and 2032. The global industry is driven by rising demand for energy-efficient and sustainable cooling solutions.

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According to the International Energy Agency, energy consumption for space cooling increased by more than 5% in 2022 from 2021. According to the U.S. Energy Information Administration, nearly 88% of U.S. households use Air-conditioning (AC). Two-thirds of U.S. households use central AC or a central heat pump as their main AC equipment. Higher energy consumption for space cooling leads to peak electricity demand, especially during hot days, increasing the possibility of power outages.

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HVAC system adoption is also being driven by strict government regulations that aim to promote energy efficiency and reduce greenhouse gas (GHG) emissions. For instance, in March 2023, the U.S. Department of Energy finalized new energy efficiency standards for room air conditioners and portable air cleaners that will reduce household energy costs. The new regulations for room air conditioners will be enforced in 2026 and for air cleaners in 2024. The U.S. Department of Energy estimates that the new regulations would save customers more than USD 25 billion over the next 30 years of trade. As per the International Energy Agency, 17 additional countries including Zimbabwe, Indonesia, Venezuela, and Brazil, have approved or adopted the Kigali Amendment to the Montreal Protocol, which restricts the use of Hydrofluorocarbon (HFC) refrigerants. The treaty was approved by the Bahamas, Korea, and Eritrea at the beginning of 2023, reaching a total number of 149 member countries.

The energy shortage and crises across the globe are emerging as a major challenge for the global HVAC market. The world is currently experiencing an unprecedented energy crisis due to events including the COVID-19 epidemic, the economic crisis, and the Russia-Ukraine war. In 2022 and 2023, the UK experienced an energy crisis, leaving millions struggling to pay for their energy bills. Additionally, in July 2022, China faced a power shortage due to heatwaves and drought. This shortage of energy has increased public awareness of issues associated with energy-efficient air conditioners & heaters, renewable energy sources, and energy-storing batteries. Consumers are looking for efficient air conditioning and heating.

HVAC Market Trends

The use of smart technologies enables users to control temperature, humidity, and air quality parameters automatically. Sensors and data analytics are also used by intelligent systems to maximize energy efficiency while lowering expenses and their negative effects on the environment. Predictive maintenance is continuing to expand, increasing system dependability, and optimizing operating costs. Numerous factors contribute to noise in HVAC systems, such as fans, air compressors, air handlers, and ducting. Excessive noise levels result in lower output, disrupted sleep, and increased dissatisfaction among residents. Modern solutions for reducing noise concentrate on the source, enhancing insulation and putting sound control mechanisms in operation. Furthermore, duct lining materials and vibration isolation techniques reduce noise transmission through the ductwork. These innovations help HVAC systems operate more silently while offering building occupants a relaxing interior environment.

HVAC Market Analysis

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Based on product type, the HVAC industry can be segmented into heating equipment, ventilation equipment, air conditioning equipment, chillers, cooling towers. In 2023, the air conditioning equipment product type segment accounted for revenue of around USD 124 billion in the year 2023 and expected to reach around USD 210 billion by 2032. This substantial growth can be attributed to the escalating demand for energy-efficient and environmentally responsible air conditioning systems. Innovative technologies, such as inverter-based systems, smart controls, and Internet of Things (IoT) integration for enhanced energy management and remote monitoring capabilities, are garnering significant attention from users across residential, commercial, and industrial sectors. These cutting-edge solutions offer improved energy efficiency, convenience, and cost savings, making them increasingly appealing to consumers.

There is a growing need of controlled usage of air conditioners as customers are growing increasingly conscious about the harmful impact of prolonged usage of ACs on the environment. This has led to a surge in the demand for Wi-Fi enabled thermostats, which incorporate wireless connectivity and enable remote monitoring and control over the air conditioning unit settings.  This functionality lets users create scheduling programs from any location with an internet connection. The ability to remotely control AC units optimizes comfort and energy usage.

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Based on end use, the global HVAC market is categorized into residential, commercial, and industrials. In 2023, residential end use segment accounted for revenue of around USD 140 billion in the year 2023 and expected to reach USD 228 billion by 2032. HVAC systems are integral to maintaining comfort and indoor air quality for households worldwide. These systems encompass various heating options like furnaces, heat pumps, and boilers for regulating indoor temperatures during colder seasons, alongside air conditioning units such as central systems or ductless mini splits for cooling in warmer climates. Ventilation systems are also essential, ensuring proper airflow and minimizing indoor pollutants.

On the other hand, in the commercial premises such as offices, retail spaces, restaurants, hotels, and educational institutions, HVAC systems are designed to create comfortable environments for occupants while meeting specific operational needs. Here, centralized heating and cooling systems, rooftop units, and variable refrigerant flow (VRF) systems are common solutions used to regulate indoor temperatures efficiently across larger areas.

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North America dominated the global HVAC market with revenue of around USD 105 billion in the year 2023 and expected to reach around USD 165 billion by 2032. The North America region boasts a high penetration of HVAC systems, with a focus on advanced technologies like variable refrigerant flow (VRF) systems and smart thermostats. Rising energy costs and government regulations promoting energy efficiency are driving demand for high-efficiency HVAC solutions. According to the International Energy Agency, energy consumption for space cooling increased by more than 5% in 2022 from 2021. According to the U.S. Energy Information Administration, nearly 88% of U.S. households use Air-conditioning (AC). Two-thirds of U.S. households use central AC or a central heat pump as their main AC equipment. Higher energy consumption for space cooling leads to peak electricity demand, especially during hot days, increasing the possibility of power outages.

The demand for environmentally friendly and energy-efficient products is changing the market dynamics and pushing manufacturers to come up with new ideas and solutions that support the concept of responsible consumption.

In terms of country US dominating with the overall market share of around 82% in the North America market. The U.S. HVAC market is mature but continues to grow steadily, supported by factors such as construction activities, replacement demand, energy efficiency regulations, and the adoption of advanced HVAC technologies. The residential and commercial sectors remain the primary drivers of the market, with a focus on energy-efficient and sustainable HVAC solutions. Major manufacturers operating in the country include Carrier, Trane, Lennox, Rheem, and York.

On the other hand, Canada HVAC industry expressing notable growth rate of around 4.8% in 2023. Market growth in Canada is driven by factors such as new construction, replacements, and energy efficiency initiatives.

The Europe market was valued at around USD 80 Billion in 2023 and is anticipated to register a CAGR of 4.8% between 2024 to 2032. Europe prioritizes energy efficiency due to stringent environmental regulations and high energy costs.  Heat pumps are gaining traction due to their ability to provide both heating and cooling efficiently. Additionally, the European market is witnessing a surge in demand for district heating systems, which utilize centralized heating plants to distribute heat to multiple buildings, promoting energy conservation.

In terms of country, Germany is dominating the Europe HVAC market in terms of market value of around USD 12.3 Billion during the 2023. Germany stands as a prominent player, driven by its robust manufacturing sector and the adoption of energy-efficient building practices.

On the other hand, Italy experiencing notable growth in HVAC industry and anticipated to grow at 5.4% CAGR during the forecast period. Italy's HVAC industry is influenced by both new construction activities and the replacement of aging systems, particularly in historical buildings. France's market is driven by stringent energy regulations and the demand for comfortable indoor environments in residential and commercial spaces.

The Asia Pacific market was valued at around USD 81.4 Billion in 2023 and is anticipated to register a CAGR of 6.9% between 2024 to 2032. Asia Pacific region is expected to witness the fastest growth in the market due to rapid urbanization, rising disposable incomes, and government initiatives promoting sustainable infrastructure.

In terms of country China is dominating the Asia Pacific market in terms of market value around USD 45 Billion in the year 2023 and expected to reach around USD 84 Billion by 2032. Key drivers in China include rapid urbanization, infrastructure development, and growing construction activities. The residential sector is the largest end-user, followed by the commercial and industrial sectors.

On the other hand, India is emerging as a fastest growing country for the HVAC market in terms of CAGR of 7.5% between 2024 to 2032. Market growth in India is driven by factors such as rising disposable incomes, urbanization, and construction activities, with both residential and commercial sectors being significant consumers of HVAC systems.

HVAC Market Share

Key players involve in the market are Daikin, Midea Group, Gree Electric Appliances, Inc., Carrier Global Corporation and Trane Technologies plc. accounting market share of 25-30% in 2023. The surge in demand for energy-efficient cooling solutions, stringent government regulation for HVAC systems, and rapid advancement in technology are creating lucrative business opportunities for manufacturers in the global market. Manufacturers are striving to set themselves apart from the competition and take advantage of the growing demand for smart HVAC systems through technological innovation. The industry is constantly shifting, from customer-centric strategies and technological developments to pricing competitiveness and innovative product development.

HVAC Market Companies

Major companies operating in the market include

• Bosch
• Carrier Group
• Daikin Industries Inc.
• Danfoss
• 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
• Trane Technologies    

HVAC Industry News

• In February 2024, Rheem developed the Endeavor heat pump for homeowners who looking for more sustainable HVAC systems with reduced emissions and less environmental impact. The heat pump features industry-leading built-in Bluetooth connectivity that makes it faster and easier for a contractor to install & service a new system.
• In February 2024, Carrier introduced a smart thermostat that offers affordable connectivity for homeowners to cater to the growing demand for smart HVAC systems. The Carrier Smart Thermostat is developed with homeowner needs and preferences in mind including a clean, contemporary design. The unit supports accessories and integrates with smart home systems.  
• In September 2023, Daikin introduced Daikin Cloud Plus, an intelligent web-based remote monitoring and service solution. Cloud-based technology provides easy access through individual login to a central portal, enabling 24/7 tracking and control from configuration through to ongoing management of energy usage and operational performance, while simplifying maintenance to keep costs down through condition monitoring.
• In May 2023, Haier developed a new air conditioning system with supersonic cooling in 10-sec technology, ensuring rapid cooling. It is based on a new-generation DC inverter technology with pulse kill control and kick torque start technology, enabling stable operation and a rapid rise in the compressor frequency to 50Hz in just 0.24 seconds.

The HVAC market research report includes in-depth coverage of the industry, with estimates & forecasts in terms of revenue (USD Billion) (Thousand Units) from 2021 to 2032, for the following segments

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Market, By Product Type  

• Heating Equipment
  • Furnaces
  • Boiler
  • Heat Pumps
• Ventilation Equipment
  • Air Handlers
  • Ductwork
  • Fans
• Air Conditioning Equipment
• Chillers
• Cooling Towers   

Market, By End Use  

• Residential
• Commercial
• Industrials   

Market, By Installation  

• New Construction
• Replacement/Retrofit  

Market, By Distribution Channel  

• Direct
• Indirect

The above information is provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America
• MEA
  • Saudi Arabia
  • UAE
  • South Africa
  • Rest of MEA