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HVAC Systems Market

HVAC Systems Market Size, Share & Trends Analysis Report By Product (Heating, Ventilation, Cooling), By End-User (Residential, Commercial, Industrial) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Report Code: SREI54800DR
Study Period 2019-2031 CAGR 6.8%
Historical Period 2019-2021 Forecast Period 2023-2031
Base Year 2022 Base Year Market Size USD 189.33 Billion
Forecast Year 2031 Forecast Year Market Size USD 341.40Billion
Largest Market Asia Pacific Fastest Growing Market North America
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Market Overview

The global HVAC systems market size was valued at USD 189.33 billion in 2022. It is estimated to reach USD 341.40 billion by 2031, growing at a CAGR of 6.8% during the forecast period (2023–2031). The HVAC Systems Market is expanding due to rising demand for energy efficiency, increased construction, a focus on indoor air quality, technological improvements, and government laws that encourage energy-saving techniques.

Heating, ventilation, and air conditioning (HVAC) is the application of various technologies to regulate the temperature, humidity, and cleanliness of the air in an enclosed space. Its goal is to provide suitable thermal comfort and indoor air quality. The laws of fluid mechanics, thermodynamics, and heat transfer provide the basis of the branch of mechanical engineering known as HVAC system design. Sometimes the field's acronym for "refrigeration" is added as HVAC&R or HVACR, or "ventilation" is eliminated as in HACR (as in the designation of HACR-rated circuit breakers).

In residential structures like single-family homes, hotels, apartment complexes, and senior living facilities, as well as in medium- to large industrial and office buildings like skyscrapers and hospitals, as well as in transportation like cars, trains, airplanes, ships, and submarines, as well as in marine environments where secure and healthy building conditions are controlled for temperature and humidity using outside air, HVAC systems play an important role.


  • Cooling dominates the product segment
  • Residential dominates the end-user segment
  • Asia-Pacific is the highest shareholder in the global market

Market Dynamics

Global HVAC Systems Market Drivers:

Government Tax Credits and Rebate Programs

The HVAC systems market is expected to increase sales with the availability of tax credit and rebate programs and other monetary benefits associated with purchasing energy-efficient systems. Governments at various levels, namely federal and state governments, have established standards to improve the operation of HVAC systems. In addition, proactive government initiatives will emerge as market growth drivers over the forecast period. For instance, under the Taxpayer Relief Act of 2012 (U.S.)-2017, customers can apply for the Federal Energy Tax Credit. The credit does not apply to all HVAC units. HVAC systems eligible for the tax credits can claim 25C tax credits, which are 10% of the overall installation costs (maximum up to USD 500) or a certain amount ranging from USD 50 to USD 300.

Similarly, Australia's Department of the Environment and Energy has introduced the 'discounted energy efficient air conditioners for household programs that provide a discount ranging between USD 200 to USD 1,000 to New South Wales residents buying high-efficiency air conditioners for household purposes. Launching similar programs would be pivotal in driving market growth over the forecast period.

Growing Real Estate Sector

The real estate industry is one of the major consumers of HVAC systems. The growth of real estate is increasing owing to the rising demand for office space, semi-urban and public accommodations, and the growth of the corporate environment. The global market for HVAC equipment is primarily driven by the factors like growing industrial and commercial units, developments in the residential markets, and rising population.

The value of the global real estate market was estimated to be USD 10.5 trillion in 2020, and it is anticipated to expand steadily over the forecast period. The rising disposable income, growing population, and emerging nations like China and India make the Asia-Pacific region's real estate market more likely than others to grow quickly. Similarly, the development of smart cities, growing demand for smart homes, and IoT-enabled appliances is an emerging trend in the real estate sector, which will give rise to the adoption of technologically advanced HVAC systems. Therefore, the growth of the real estate industry is anticipated to boost the growth of the HVAC market.

Global HVAC Systems Market Restraints:

High Maintenance and Installation Costs

The average life of HVAC systems is about 13 years with proper maintenance. This maintenance includes frequent cleaning to remove any sediment and dust settled on the filters to avoid damage, which can lead to the failure of the entire system. Moreover, several components or parts in HVAC units, such as filters, motors, refrigerant, coolant, etc., must be replaced or repaired frequently due to their short lifespan and operating life cycle. The cost of these parts starts from USD 50 and can grow to USD 200 and even more.

Additionally, the initial cost of energy-efficient HVAC systems is very high and can outweigh its short-term energy-saving benefits. The installation cost of the HVAC systems can cost customers from USD 3,000 to USD 30,000 and more. Further, replacing an entire HVAC system may cost in the range of USD 15,000 to USD 40,000. Thus, the high upfront and maintenance cost of the HVAC systems is expected to hamper the growth of the HVAC equipment market.

Global HVAC Systems Market Opportunities:

Integration of IoT with HVAC Systems

Various industries, such as automotive, BFSI, transportation and logistics, manufacturing, and healthcare, are discovering the potential uses of IoT. It offers real-time data processing by helping businesses to analyze and identify hidden patterns, relationships, and unique insights that drive better decision-making. Integrating IoT with HVAC systems enables companies to analyze external data such as the number of occupants in the room, comfort preferences of each occupant, humidity level, and outside temperature, among others. HVAC systems use this data to set optimum temperatures, change fan speeds, and increase the energy efficiency of the entire system.

Additionally, IoT enables predictive maintenance for customers and HVAC companies, which helps reduce maintenance costs and prevent severe system breakdowns. The proliferation of IoT-enabled devices is expected to grow due to such benefits. As reported by IoT Analytics GmbH, the number of IoT device connections is expected to reach 30.9 billion in 2025 from 11.7 billion in 2020, growing at a CAGR of 13%. The proliferation of IoT-enabled devices is expected to increase the adoption of connected HVAC systems, thereby creating opportunities for market growth.

Regional Analysis

Based on region, the global HVAC systems market is bifurcated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global HVAC systems market shareholder and is estimated to exhibit a CAGR of 6.2% during the forecast period. The Asia-Pacific region holds the largest share of the global market for HVAC systems due to rising demand from the housing, commercial office, and building sectors. Commercial construction activity is increasing in major Asia-Pacific economies like China, Japan, and India as many businesses in various industries open offices across the region to secure their target and potential consumer base. Due to China's rapid urbanization, the country's market is also seeing an increase in public and private investment in real estate projects and various residential, commercial, and industrial developments, fostering the expansion of the heating, ventilation, and cooling system market.

Additionally, India is quickly becoming a prominent player in the Asia-Pacific area. Government organizations provide manufacturer-friendly foreign direct investment (FDI) programs. As a result, these producers, including DAIKIN INDUSTRIES, LTD. and Johnson Controls, give heating, ventilation, and refrigeration systems considerable consideration during production and development. For instance, in October 2019, Johnson Controls-Hitachi Air Conditioning invested USD 22.5 million to open a brand-new, cutting-edge development facility in Gujarat, India. Creating residential and commercially packaged air conditioners for the Indian, Middle Eastern, Southeast Asian, and European markets, which will increase market share, is the key priority.

North America is estimated to exhibit a CAGR of 5.5% over the forecast period. The market for HVAC systems has matured in this region, but replacement sales prompted by aged infrastructure or retrofit projects are generating new sources of income for OEMs and their growth in the services and maintenance sector. Due to the green construction approach being one of the most significant footholds in this industry, North America is also anticipated to have a significant portion of the market. In addition, green buildings have energy-efficient designs and construction methods for cooling or heating the building. Builders repair systems for HVAC. They concentrate on employing environmentally friendly building materials that keep a building's temperature stable and encourage natural ventilation to lower the energy consumption of the HVAC system.

Europe is estimated to witness substantial market expansion owing to the presence of Western Europe, which has two significant economies, i.e., France and Germany accounting for one-third of the market. The primary variables influencing HVAC system sales in Europe are rising retail construction prices, industrial expansion, rising government spending on sustainable building development, shifting climatic conditions, quick urbanization, and rising disposable income in European countries. Moreover, the European tourism industry's growth results in new commercial space construction. This fuels demand for new hotels, airports, shopping malls, and other service infrastructure, which is expected to bolster the demand for HVAC equipment in the region.

South America is still regarded as an emerging region globally. Increased adoption of split units, which are simpler to install and more energy efficient, is primarily responsible for the growth. In addition, the Middle East and Africa is anticipated to experience substantial growth in the future years. Due to regulations adopted by the governments of Middle Eastern nations to support energy-efficient and environmentally benign refrigerants that have the least impact on the environment, the demand for HVAC systems that use refrigerants to improve energy efficiency in the region is increasing.

Report Scope

Report Metric Details
By Product
  1. Heating
  2. Ventilation
  3. Cooling
By End-User
  1. Residential
  2. Commercial
  3. Industrial
Company Profiles Carrier Corporation Emerson Electric Co. Hitachi Ltd. Daikin Industries, Ltd. Johnson Controls International plc Trane Technologies Lennox International, Inc. Samsung Electronics Co. Ltd. Rheem Manufacturing Company LG Electronics Havells India Ltd. Mitsubishi Electric Haier Group
Geographies Covered
North America U.S. Canada
Europe U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
APAC China Korea Japan India Australia Taiwan South East Asia Rest of Asia-Pacific
Middle East and Africa UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
LATAM Brazil Mexico Argentina Chile Colombia Rest of LATAM
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
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Segmental Analysis

The global HVAC systems market is segmented by product and end-user.

Based on the product, the global market is bifurcated into heating, ventilation, and cooling. 

The cooling segment dominates the global market and is projected to exhibit a CAGR of 5.91% over the forecast period. Generally, the cooling segment comprises two major systems: air conditioning and refrigeration. The demand for new cooling systems is expected to rise due to technological developments like remote systems, IoT-integrated HVAC systems, and smaller, high-performance units that enable cost savings and improve energy efficiency and comfort. According to data published by the International Energy Agency (IEA), over 10 percent of the world's electricity consumption is used for refrigeration. The staggering statistics likely explain why cooling equipment has dominated the HVAC systems market. Increasing population and disposable incomes, especially in the world's hottest regions, have prompted the use of air conditioners, thereby boosting demand for cooling systems like air conditioners (AC), unitary ACs, etc.

The demand for ventilation units such as air purifiers, humidifiers, and dehumidifiers is rising due to the increasing awareness and desire for safe and non-contaminated air. Additionally, manufacturers are expected to introduce ventilation systems with new modifications to abide by the Centers for Disease Control and Prevention guidelines to enhance indoor air circulation quality to reduce the spread of the COVID-19 virus. Such developments are expected to demand new ventilation systems and retrofit HVAC equipment.

Based on end-user, the global market is segmented into residential, commercial, and industrial. 

The residential segment owns the highest market share and is estimated to exhibit a CAGR of 5.4% during the forecast period. The rising adoption of HVAC equipment across several verticals is expected to expedite market growth. The residential sector accounts for a substantial share of the overall HVAC market and is expected to retain its dominance over the forecast period. An increase in multi-family and single-family homes creates opportunities for the residential HVAC market. Consequently, the segment had an estimated value of more than 50 billion dollars in 2021. The demand for residential HVAC systems is expected to remain stable in developed regions of the world but to rise slightly in newer markets, especially developing markets. This is primarily attributable to the rising population in emergent markets and the maturation of markets in developed nations. The increasing adoption of HVAC units for personal comfort and the rising disposable income is the reason for the high growth of this segment.

The commercial HVAC market presents enormous expansion opportunities. The growing number of commercial spaces such as shopping malls, offices, theatres, and hotels is anticipated to fuel the demand in the commercial sector. Several trends, including ecological and intelligent technology and automated systems, are anticipated to play a substantial role in shaping the future of the commercial HVAC market.

Market Size By Product

Recent Developments

Top Key Players

Carrier Corporation Emerson Electric Co. Hitachi Ltd. Daikin Industries, Ltd. Johnson Controls International plc Trane Technologies Lennox International, Inc. Samsung Electronics Co. Ltd. Rheem Manufacturing Company LG Electronics Havells India Ltd. Mitsubishi Electric Haier Group Others

Frequently Asked Questions (FAQs)

What is the projected market value of the global HVAC Systems market?
The global HVAC Systems market size is projected to reach USD 189.27 billion by 2031.
Asia Pacific region has the highest growth rate in the HVAC Systems market.
The cooling market sector is expected to dominate over the forecast period.
Carrier Corporation; Emerson Electric Co.; Hitachi Ltd.; Daikin Industries, Ltd.; Johnson Controls International plc; Trane Technologies; Lennox International, Inc.; Samsung Electronics Co. Ltd.; Rheem Manufacturing Company; LG Electronics; Havells India Ltd.; Mitsubishi Electric; Haier Group; and Hitachi Ltd. are the prominent players in the market of HVAC Systems.
Integration of IoT with HVAC Systems is one of the key trends in the market of HVAC Systems.

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