HVAC Market Size

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.

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.

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.