|Study Period:||2018 - 2026|
|Fastest Growing Market:||Asia Pacific|
|Largest Market:||North America|
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The Global HVAC Equipment Market was valued at USD 98.76 billion in 2020, and it is expected to reach USD 144.24 billion by 2026, registering a CAGR of approximately 7.5%, during the forecast period (2021-2026). The demand for environmental control during this COVID-19 crisis significantly increased because air filtration, airflow, and humidity are all three critical components used in minimizing the risk. Due to this, shutting down an HVAC system during a crisis such as this is not recommended. Filtration is an essential element in assuring indoor air quality (IAQ), because if the virus can be captured in the filtration system, it cannot make someone sick inside the building.
- The booming construction business in individual emerging economies and the increasing end-user markets, like the data center market, are significant factors driving the growth of the HVAC equipment market over the forecast period. Some of the benefits of adopting HVAC equipment include energy-efficient, improved results, and lifespan, among others.
- Changes in urbanization, industrialization, and migration are some of the critical factors influencing the growth of the market; this has given rise to the number of factories, manufacturing units, and residential complexes, which use HVAC equipment. According to the Population Reference Bureau, In 2019, the degree of urbanization worldwide was at approximately 54%. According to the source, North America, with 82% of the population living in cities was the most urbanized continent worldwide.
- An AHR Expo and ASHRAE Journal survey found that nearly 88% of respondents in the HVAC industry are witnessing a "good" or "excellent" business year in 2019. 43% of those respondents anticipate 5-10% growth for their business, and 23.5% expect growth at exceeds 10%.
- Moreover, at the 2019 AHR Expo in Atlanta, Samsung HVAC North America announced the expansion strategy of its residential and commercial air conditioning market in the region by building, training, and supporting a wide range of specific representatives, distributors, and installers. The growth in the construction industry and the increase in the disposable income in developing countries, has increased the requirement of HVAC equipment for a broader consumer base. According to the Bureau of Labor Statistics, the construction industry's business in the United States is expected to amount to almost USD 1.58 trillion by 2028.
- According to a report from the US National Academy of Sciences (NAS), the first decade of the 21st century was 0.8°C (1.4°F) warmer than the first decade of the 20th century. The variation in climatic changes has led to the increasing demand for electrical cooling systems in summers and, simultaneously, for natural gas, heating oil, wood, and electrical heating systems in winters. Moreover, climate change harms energy consumption in the buildings and influences air conditioning loads, which vary according to the ambient temperature and humidity. With the advent of new government regulations, like in the US, HVAC systems' energy efficiency is expected to rise. This has opened a gateway to the smart HVAC control systems for most advanced heating and air conditioning units in buildings.
Scope of the Report
HVAC equipment is an indoor and vehicular environment comfort technology that engages in providing thermal comfort and appropriate indoor air quality. It is a critical part present in various residential structures which include single-family homes, apartment buildings, hotels, and senior living facilities, medium to large industrial and office buildings, such as skyscrapers and hospitals, vehicles, such as cars, trains, airplanes, ships and submarines, and in marine environments, where safe and healthy building conditions are regulated, concerning temperature and humidity, using fresh air from outdoors.
The study tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry that support the market estimations and growth rates over the forecast period.
The study further analyzes the overall impact of COVID-19 on the demand-side market dynamics and the ecosystem, in the near & short-term basis. The recent changes in trade scenario are also analyzed in the study.
|Rest of the World|
Key Market Trends
Air Conditioning is Expected to Hold Significant Share
- Air conditioning equipment is expected to hold a prominent share of the HVAC equipment market, owing to the trend of an increasing number of residential and commercial users, combined with government regulations for energy efficiency and eco-friendly equipment. Since 1990, the energy demand for space cooling has more than tripled, making it the fastest-growing end-use equipment in buildings.
- For instance, according to the International Energy Agency (IEA), space cooling was responsible for the emission of about 1 GT of CO2 and nearly 8.5% of the total final electricity consumption in 2019. Moreover, roughly 2 Billion AC units are now in operation worldwide, making space cooling the leading driver of electricity demand in buildings, with a capacity to meet the peak power demand. Residential units account for 68% of the total air conditioners. Such instances depict that there is a significant demand for air conditioning equipment, and thus, the market is likely to grow at a significant rate over the forecast period.
- Moreover, the rooftop air conditioner standards in North America, which cover new units, found on low-rise buildings, such as hospitals, schools, and big-box stores, will take effect in two phases: increasing the minimum efficiency by about 10% as of January 1, 2018, and by 25%-30% as of January 1, 2023. Such developments are expected to further increase the demand from the commercial sector.
- Furthermore, the Federal Energy Management Program (FEMP) has set standards for minimum energy efficiency requirements, with Energy Star. For example, when the air conditioner's minimum efficiency starts from 9.5 EER and 11.0 IEER and goes up to 15.0 SEER and 12.5 EER (for single-phase), the efficiency rating varies based on the equipment size and capacity.
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North America is Expected to Hold Significant Share
- HVAC systems are finding widespread adoption across the North American region, due to the multiple advantages offered by these systems, most notably, the power-saving techniques.
- The United States and Canada rank among the world's top 10 energy-consuming countries, with the United States taking the second place, only behind China. The increased activity within the industrial sector, comprising manufacturing facilities (specifically the food industry), hospitals, data centers, and other institutional and industrial facilities, has been driving the market demand for HVAC equipment.
- The presence of long-standing manufacturers in the region, with custom solutions to industrial problems, has been a catalyst to the market growth. For instance, Daikin’s 160-ton Daikin WGS water-cooled screw compressor provided Camoplast Inc. with an 80,000-sq-ft automotive component injection molding facility with a reduced annual electricity usage of 30%. The company’s chiller replaced eight small chillers, during the upgradation project, to cool water for industrial processes.
- Besides, the maintenance of hygienic conditions is of vital importance for food processing facilities. Therefore, the Environmental Protection Agency (EPA) has laid down certain energy performance indicators to assess the energy efficiency of food processing plants with performance measurements in comparison to that of other facilities, across the United States. For a facility to acquire an Energy Star certification, it must surpass a score of 75 out of 100. By providing custom-made solutions with an outlook toward increased capacity and energy efficiency, the industrial HVAC equipment caters to the larger market.
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The HVAC equipment market is quite competitive and consists of significant players. In terms of market share, a few prominent players currently dominate the market. The players, with a leading share in the market, are focusing on expanding their customer bases across other geographical locations. Daikin Industries Ltd., Johnson Controls - Hitachi Air Conditioning Company, and Honeywell International, Inc. were some of the leading players operating in the HVAC market globally. Further, a significant portion of companies started offering HVAC systems with higher energy efficiency and green technology compatible with various smart devices.
- February 2020 - Honeywell introduced one of the first autonomous building sustainability solutions which evaluate whether a building's HVAC system is running at peak efficiency. Honeywell Forge Energy Optimization is a cloud-based, machine learning solution that regularly studies patterns such as building's energy consumption and automatically adjusts them to optimal energy saving settings without compromising occupant comfort levels.
- November 2020 - Daikin Industries Ltd signed a MOU (memorandum of understanding) with Singapore Power Group to establish a joint venture to realize district-level centralized cooling system for Tengah Town( smart energy town project). The company’s energy-saving air conditioners and far advanced systems were adopted for the project based on the technology and experience that the company has cultivated.
- January 2020 - LG Air Conditioning Technologies USA announced the installation of its HVAC technologies in The Ebell of Los Angeles, a performance art facility located in Los Angeles, and The Lido Hous, a high-end property located in California. The company said that its Variable Refrigerant Flow (VRF) technology and ducted and duct-free solutions make significant inroads in the United States where the demand for high-performance, flexible HVAC technology continues to grow.
Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Market Drivers
4.3.1 Supportive Government Regulations Including Incentives for Saving Energy through Tax Credit Programs
4.3.2 Growing Demand for Energy-efficient Devices
4.3.3 Increased Construction And Retrofit Activity To Aid Demand
4.4 Market Challenges
4.4.1 High Initial Cost of Energy Efficient Systems
4.4.2 Dependence on Macro-economic Conditions
4.4.3 Growing Competition to Limit Margins
4.5 Market Opportunities
4.5.1 Emergence of IoT and Product Innovations to Aid Replacements
4.6 Industry Ecosystem Analysis
4.7 Impact of COVID-19 on the HVAC Equipment Market
4.8 Industry Regulations and Policies
4.9 Distribution Channel Analysis
5. MARKET SEGMENTATION
5.1.2 Air Conditioning
5.1.4 Other Types
5.2 Equipment Type
5.2.1 Unitary Equipment (Site-Assembled)
18.104.22.168.3 Other Unitary Equipment
22.214.171.124 End-user Industry
5.2.2 Applied Equipment (Semi-Custom)
126.96.36.199.1 Custom-built AHU
188.8.131.52.2 Central AHU
184.108.40.206.1 Air-cooled Chillers
220.127.116.11.2 Water-cooled Chillers
18.104.22.168.3 Absorption Chillers
5.2.4 Heat Pumps
5.2.5 Ductless Systems
5.3.1 North America
5.3.3 Asia Pacific
5.3.4 Rest of the World
6. COMPETITIVE LANDSCAPE
6.1 Company Profiles*
6.1.1 Daikin Industries, Ltd.
6.1.2 Johnson Controls - Hitachi Air Conditioning Company
6.1.3 LG Electronics Inc.
6.1.4 Raytheon Technologies Corporation (United Technologies)
6.1.5 Emerson Electric Co.
6.1.6 Honeywell International, Inc.
6.1.7 Mitsubishi Electric Trane HVAC US LLC
6.1.8 Nortek Global HVAC
6.1.9 Danfoss AS
6.1.10 Panasonic Corporation
6.1.11 Haier Inc.
6.1.12 Midea Group
6.1.13 Whirlpool Corp.
7. INVESTMENT ANALYSIS
8. FUTURE OF THE MARKET
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Frequently Asked Questions
What is the study period of this market?
The HVAC Equipment Market market is studied from 2018 - 2026.
What is the growth rate of HVAC Equipment Market?
The HVAC Equipment Market is growing at a CAGR of 7.5% over the next 5 years.
Which region has highest growth rate in HVAC Equipment Market?
Asia Pacific is growing at the highest CAGR over 2021- 2026.
Which region has largest share in HVAC Equipment Market?
North America holds highest share in 2020.
Who are the key players in HVAC Equipment Market?
Daikin Industries Ltd., Johnson Controls - Hitachi Air Conditioning Company, LG Electronics, Inc., Mitsubishi Electric Trane HVAC US LLC, Honeywell International, Inc. are the major companies operating in HVAC Equipment Market.