The global heating equipment market size was valued at USD 33.56 billion in 2018 and is expected to register a CAGR of 5.4% from 2019 to 2025 on account of growing installations of energy-efficient heating systems. Government initiatives for improving energy efficiency across industries coupled with technological innovations are also expected to drive the market. Growing spending in the construction sector is also anticipated to contribute to product demand over the coming years. Initiatives, such as the Leadership in Energy and Environmental Design (LEED) in the U.S., is also expected to benefit the industry growth.
Demand for industrial furnaces in the U.S. is expected to increase over the coming years on account of rising in refurbishing and renovations in the industrial sector. Also, the presence of a stringent regulatory framework in the country is expected to drive market growth over the forecast period. The global market is highly competitive and major companies focus on minimizing the overall product cost by leveraging the significant price of technology and the high cost of installation.
Therefore, companies are investing in R&D for developing efficient technologies, remote monitoring devices, and control systems to strengthen their foothold in the market. Favorable government initiatives like the Climate Action Programme (COP21) are contributing to the green transition and are projected to augment the development of energy-efficient products. Manufacturers are mandated to comply with the U.S. Department of Energy (DOE) energy conservation standards for air conditioners and heat pumps.
Increasing disposable income levels in developed as well as developing economies have resulted in increasing demand for technologically advanced systems and comfortable housing solutions, which is projected to boost the demand further. Besides, increasing the number of remodeling activities due to easy credit accessibility or financial support is estimated to have a positive impact on market growth.
Heating equipment plays an important role in the processing and manufacture of ferrous & non-ferrous metals, mining, oil & gas, and the automotive industry. The demand for heating equipment solutions that lower operational costs and improve energy savings is anticipated to increase as energy consumption in the industrial and residential sectors rises.
Global energy consumption has increased dramatically as a result of the expanding population and rapid industrialization. Large quantities of processed heat are utilized by many industrial production processes and methods, which typically results in high energy expenditures for organizations.
The preference for energy-saving products in the industrial and residential sectors is also anticipated to rise as a result of government restrictions. Additionally, energy-efficient solutions significantly reduce operational costs to a larger extent. The International Energy Agency estimates that greater energy efficiency in buildings, industrial processes, and transportation networks could reduce global energy consumption by one-third and help in reducing greenhouse gas emissions by 2050.
Growing consumption of fossil fuels such as coal, oil, and natural gas to meet heating requirements has a detrimental impact on the environment. The demand for energy-efficient goods and solutions is anticipated to increase with growing awareness of climate change and greenhouse gas emissions.
The type of equipment used and its capacity influence the price of installing a heating system. High Heating Seasonal Performance Factor (HSPF) and SEER ratings are typically associated with more expensive heat pumps. The energy-efficient models help save on energy bills and operational costs, but they require higher initial investments.
The Department of Energy (DOE) in the U.S. establishes energy-efficiency standards for a variety of appliances and equipment. These criteria apply to more than 60 different products such as heat pumps, furnaces, and boilers. The efficiency and performance of the heating equipment will be enhanced by this regulation. For instance, In November 2021, DOE announced a partnership with the Heating Industry to Improve the performance and energy efficiency of Cold Climate Heat Pumps and further reduce the carbon footprint of cold climate heating solutions.
The heat pumps segment held the largest share and were valued at USD 14.16 billion in 2018; registering a CAGR of 5.5% during the projected period. Heat pumps are popular due to its ability to effectively transfer at low operational costs. Furnaces are the most common heating systems used on account of their quick heating capability and ease of replacement.
Electric furnaces are gaining wide preference as they require less maintenance, do not give off any harmful emissions, and are affordable. Increasing demand for upgraded heating systems that meet the required regulatory standards is expected to gain traction over the next seven years which in turn is expected to drive the industry growth over the forecast period.
Boiler products are used for various applications such as water heating, power generation, cooking, and sanitation. They are widely used in the commercial, institutional, industrial, as well as the educational sector. Increasing the use of boilers in the residential sector is projected to boost market demand over the coming years.
The industry is expected to register notable gains on account of the production of advanced heating systems for use in residential and commercial construction. Also, a rise in the demand for electrically operated products on account of ease of installation coupled with low emissions is expected to drive the industry growth over the forecast period.
Based on the application, the market has been segmented into the residential, commercial, and industrial sectors. The industrial segment accounted for the largest revenue share in 2018 and is estimated to expand further at the fastest CAGR of 5.7% from 2019 to 2026. Heating equipment is widely used in power generation, mining, automotive, and food & beverage industries.
Rapid industrialization in the Asia Pacific region is one of the primary factors positively influencing industry growth. Favorable government policies and tax rebates offered on installing energy-efficient products are expected to augment the demand further. Increasing product demand in processing, manufacturing, and smelting is also projected to drive the segment growth over the coming years.
The heating equipment market in Europe is expected to witness significant growth over the coming years on account of the increasing repair and renovation activities and rapidly recovering construction industries. The growing automotive industry will drive the demand for compact and technologically advanced heating equipment in the residential sector. In addition, sky-high gas prices have propelled the demand for heating equipment such as heat pumps.
The heating equipment market in Germany and France is majorly driven by regulations enforced by the German government who emphasized that the new heating pumps will run on renewable energy. This regulation doubled the production of technology in Germany and France and shifted subsidies to support the installation of new heat pumps, simultaneously insulating buildings to ensure maximum efficiency.
The Asia Pacific is characterized by an increasing number of residential and commercial construction, which is anticipated to contribute to the product demand for heating equipment. Rapid industrialization and increasing per capita income in Asia Pacific regions are expected to drive the market for heating equipment. Additionally, rising awareness regarding the use of such products is anticipated to fuel market growth. It is said that government-mandated rules in the commercial and industrial sectors and incentives for energy-saving technologies will accelerate market expansion for heating equipment.
Rapid industrialization coupled with increasing space heating requirements and growing demand for energy-saving heating solutions in the residential sector is projected to drive the demand for heating equipment in China. Additionally, strengthening building energy regulations by promoting the appropriate building and cooling system design, passive cooling, and opportunities for natural ventilation, will drive the demand for heating equipment.
Companies are adopting cost reduction strategies and are focusing on enhancing product offerings by diversifying their end-user applications and acquiring multiple distribution centers.
Companies are investing in expanding their production capabilities and acquiring certifications to cater to the increasing demand. They also comply with various energy efficiency requirements set by regulatory authorities.
Some of the major companies in this market include The Danfoss Group; United Technologies Corporation; Ingersoll-Rand Plc; Lennox International, Inc.; Johnson Controls; and Robert Bosch GmbH. Several other companies are Uponor Corporation; Emerson Electric Co.; Honeywell International Inc.; Schneider Electric SE; Siemens AG; Mitsubishi Electric Corporation; and Nortek, Inc.
The base year for estimation
Actual estimates/Historical data
2014 - 2017
2019 - 2025
Revenue in USD Million and CAGR from 2019 to 2025
North America, Europe, Asia Pacific, Central & South America, Middle East & Africa
U.S., Canada, Mexico, Germany, France, U.K., Russia, China, Japan, India, Indonesia, Brazil, and Saudi Arabia
Revenue forecast, company share, competitive landscape, growth factors and trends
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This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For this study, Grand View Research has segmented the global heating equipment market report based on product, application, and region:
Product Outlook (Revenue, USD Million, 2014 - 2025)
Application Outlook (Revenue, USD Million, 2014 - 2025)
Regional Outlook (Revenue, USD Million, 2014 - 2025)
Central & South America
Middle East & Africa
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The global construction industry, once thriving with increased investments, has been severely affected by the suspension of the construction activities in the wake of the ongoing pandemic. Shortage of labors coupled with potential supply chain bottlenecks of materials and equipment is expected to cause project delays in the ongoing funded projects and may lead to reduced spending in the upcoming projects. Uncertainty around the actual duration of the prevailing lockdown makes it hard to anticipate how a recovery in the construction industry will unfold. On similar lines, the HVAC industry has been adversely affected by the COVID-19 outbreak due to the shutting down of several component manufacturing facilities across China, European countries, Japan, and the U.S. This has consequently led to a significant slowdown in the production of HVAC equipment. Lockdowns imposed by the governments in the wake of the Covid-19 outbreak has not only affected manufacturing but also pegged back the consumer demand for HVAC equipment. The report will account for Covid19 as a key market contributor.
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