HVAC System Market Growth Report & Industry Analysis by 2030

HVAC System Market Forecast to 2030 - Global Analysis by Component (Thermostat, Air Handling Units, Central ACs, Furnace, Heat Pump, Compressor, and Others), Type (Split System, Ductless System, and Packaged System), Implementation (New Installation and Retrofit), and Application (Residential, Commercial, and Industrial)

Publication Month : Aug 2023

  • Report Code : TIPRE00005293
  • Category : Electronics and Semiconductor
  • Status : Published
  • No. of Pages : 185
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[Research Report] The HVAC system market size is expected to grow from US$ 246.10 billion in 2022 to US$ 597.7 billion by 2030; it is estimated to record a CAGR of 11.3% from 2022 to 2030.

Analyst Perspective:

Asia Pacific has surfaced as a key regional HVAC system market. Countries such as China, India, Japan, and Australia are the major contributors to this regional market. Increasing industrial and infrastructural operations in Asia Pacific, especially in China and India, led to an increase in construction projects, propelling the demand for HVAC systems. Due to the increasing investment in infrastructure in China and significant consumer spending on home repairs and renovations, the construction business is thriving, thus bolstering the HVAC system market in the country.

The demand for HVAC products in Europe and the US is gaining momentum due to advancements in smart infrastructure and the rising number of smart homes. Moreover, the rising construction sector across the Middle Eastern countries, such as the UAE, Saudi Arabia, and Qatar, is also projected to play a vital role in the global HVAC system market growth over the next few years.

The UK, France, Italy, Russia, Spain, and Germany are a few of the worst-affected European countries by the COVID-19 outbreak. Businesses in the construction sector faced severe economic difficulties as they had to suspend their operations or substantially reduce their activities. However, construction activities have resumed now due to the ease of lockdown restrictions and successful vaccination drives. This is expected to propel the HVAC system market in Europe during the forecast period.

Market Overview:

The HVAC system market is highly fragmented and demonstrates strong competition among the HVAC system market players. The surge in demand for eco-friendly HVAC systems and smart homes has encouraged participants to undertake innovative developments in HVAC technologies, focusing on enhancing energy efficiency. Significant corporations engage in partnerships, acquisitions, product innovation, and development strategies.

Additionally, in 2023, the HVAC industry is shifting toward smart connected systems. With smart connected systems, homeowners and building managers can control their HVAC systems remotely using mobile devices and smartphones. These systems feature precise temperature control and can adjust automatically to changing weather conditions to improve energy efficiency. Moreover, the rise of heat pumps is changing the HVAC system market outlook, as there is a need to phase down HFC refrigerants. Other agents of change include greater connectivity among systems.

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HVAC System Market: Strategic Insights

Market Size Value inUS$ 246.10 billion in 2022
Market Size Value byUS$ 597.7 billion by 2030
Growth rateCAGR of 11.3% from 2022 to 2030
Forecast Period2022-2030
Base Year2022
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Market Driver:

Emerging Technologies Promote Demand for Smart HVAC Systems

There is a growing penetration of IoT-enabled devices across residential, commercial, and industrial sectors. HVAC manufacturers are manufacturing smart HVAC systems utilizing wireless technology to communicate with nearby smart devices and adjust the indoor environment automatically. A smart HVAC system can understand the temperature or humidity of different rooms and adjust the climate accordingly. It can also customize the climate based on individual members’ preferences present on the floor. Additionally, these systems can save energy in commercial settings while providing a quieter environment. Such systems can be improvised for predictive maintenance by harnessing the power of artificial intelligence (AI) and machine learning (ML), thus offering better cost savings and longer operational life. The adoption of smart HVAC systems has been rising across residential, commercial, and industrial sectors due to the integration of such advanced technologies. HVAC manufacturers have been collaborating with different ecosystem companies to improve their product offerings. In June 2020, Schneider Electric SE, Somfy Group, and Danfoss A/S partnered with Assa Abloy AB to develop and deploy seamless smart solutions for commercial and residential applications. Danfoss A/S is one of the largest manufacturers of HVAC systems in Europe, and the company’s participation in such collaboration can strongly aid in HVAC product development. Thus, collaborations can offer customers with cutting-edge connected solutions such as smart HVAC systems, which, in turn, is expected to positively impact the growth of HVAC system market.

Segmental Analysis:

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Based on component, the HVAC system market is segmented into thermostat, air handling units (AHU), central ACs, furnace, heat pump, compressor, and others.

The central ACs segment held the largest HVAC system market share in 2022. The term “central air conditioning” or “central A/C” refers to a system in which air is cooled centrally and then delivered to and from various rooms using several fans and ducting. An air conditioner's compressor does the bulk of the work that allows for air conditioning. Cool air is produced by forcing heat out of the building using refrigerant gas, which is compressed. Central air conditioning removes air from different rooms in the premises where it is installed; air is sucked through the air filter, which filters airborne particles such as dust and lint. Central air conditioning units provide quieter operation and cleaner air. According to a report by Yale School of Environment 2020, the demand for air conditioning solutions will grow by 59% by 2050 due to climate changes, and demand for air conditioning in commercial buildings where central ACs are used is expected to increase by 17%. According to the International Energy Agency, central AC units are expected to grow to 5.6 billion units by 2050 worldwide. The rising global temperature will generate the need for central ACs. Some of the prominent players providing central ACs are Lennox International, Carrier, and Daikin.

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Regional Analysis:

The HVAC system market is segmented into five major regions—North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South America. In 2023, North America led the HVAC system market with a substantial revenue share, followed by Asia Pacific. Further, Asia Pacific is expected to register the highest CAGR in the HVAC system market from 2023 to 2030.

The growth in the construction industry in developed countries—such as the US and the UK—and emerging economies—including China and India—is fueling the demand for HVAC systems. These countries have also witnessed a rise in activities in the industrial sector, comprising manufacturing and other institutional and industrial facilities, which has been driving the need for HVAC systems. Further, favorable initiatives taken by companies for improving HVAC have increased the uptake of eco-friendly HVAC systems worldwide. In 2022, Chromasun, an Australian manufacturer of advanced high-temperature solar panels, announced that it was developing chillers that utilize gas and solar panels to function efficiently.

Key Player Analysis:

Daikin Industries, Ltd.; Emerson Electric Co.; Honeywell International Inc.; Johnson Controls Inc.; LG Electronics; Carrier Global Corporation; Lennox International Inc.; Trane; EVAPCO, Inc.; and Rheem Manufacturing Company are among the key players operating in the HVAC system market.

Recent Developments: 

Inorganic and organic strategies such as mergers and acquisitions are highly adopted by companies in the global HVAC system market. A few recent developments by key HVAC system market players are listed below: 

  • In 2022, DAIKIN announced the expansion of its new heat pump heating factory in Poland. The company announced an investment of around US$ 300 million toward the factory. The new production base will start operations in July 2024 to meet the rapidly increasing demand for heat pumps in Europe.
  • In 2021, Honeywell announced its collaboration with DunAn Environment for the HVAC industry transition to Solstice® N41 (R-466A) by developing their product line of HVAC components as compatible.
  • In 2022, Rheem Manufacturing company announced the acquisition of DEJONG from Nordian Capital. The acquisition will accelerate growth and expansion for European manufacturers and expand product offerings for the Rheem manufacturing company.
  • In 2022, Daikin announced the completion of the acquisition of Duplomatic MS S.p.A. The share purchase agreement included a price of US$ 220 million. The acquisition is scheduled to be completed in July 2022.
Report Coverage
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered
Segment Covered

Component, Type, Implementation, and Application

Regional Scope
Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope
Country Scope

This text is related
to country scope.

Frequently Asked Questions

What are market opportunities for the HVAC system market?

Need for replacement of traditional HVAC systems with newer HVAC systems, growing adoption of low global warming potential refrigerants are some of the factors likely to provide new opportunities for market vendors during the forecast period.

Which region to dominate the HVAC system market in the forecast period?

In the North American region, HVAC systems are experiencing widespread adoption given the features provided in these systems. Moreover, the complexity of emerging requirements for a more clean and efficient use of energy is another aspect contributing to innovation in the industry. According to Air Conditioning Contractors of America ACCA, the HVAC services in North America are set to increase in value from US$25.6 billion in 2019 to US$35.8 billion in 2030. The market is witnessing potential growth given the adoption of advanced technologies and the increasing need for green construction solutions.

What are reasons behind HVAC system market growth?

Rise in demand for energy-efficient HVAC solutions, growth in government regulatory policies for energy saving and conservation, and development of smart HVAC system are promoting the demand for HVAC systems.

Who are the major vendors in the HVAC system market?

Daikin Industries, Ltd., Johnson Controls International plc, Carrier, Trane, and Lennox top five key market players operating in the global HVAC system market.

What is the future trend for HVAC system market?

IoT sensors installed on HVAC equipment can increase energy efficiency by monitoring usage trends and even considering weather predictions as they provide access to real-time data. The end effect is improved interior climate management with little electricity use. HVAC systems can be a significant component of IoT-enabled smart grid connectivity. IoT technology makes remote system monitoring possible, allowing users to identify issues from a distance by consulting a smartphone app or online portal. For Instance, some sensors track vital information, such as pressure, vibration, flow, temperature, humidity, on-off cycles, and fault tolerance for providing leak detection information.

The List of Companies - HVAC System Market

  1. Daikin Industries, Ltd.
  2. Emerson Electric Co.
  3. Honeywell International Inc.
  4. Johnson Controls Inc.
  5. LG Electronics
  6. Carrier Global Corporation
  7. Lennox International Inc.
  8. Trane
  9. EVAPCO, Inc.
  10. Rheem Manufacturing Company

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. Data Collection and Secondary Research:

As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.

Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.

  1. Primary Research:

The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.

For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.

A typical research interview fulfils the following functions:

  • Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
  • Validates and strengthens in-house secondary research findings
  • Develops the analysis team’s expertise and market understanding

Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:

  • Industry participants: VPs, business development managers, market intelligence managers and national sales managers
  • Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.

Below is the breakup of our primary respondents by company, designation, and region:

Research Methodology

Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.

  1. Data Analysis:

Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.

  • 3.1 Macro-Economic Factor Analysis:

We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.

  • 3.2 Country Level Data:

Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.

  • 3.3 Company Profile:

The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.

  • 3.4 Developing Base Number:

Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.

  1. Data Triangulation and Final Review:

The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.

We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.

We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.

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