The U.S. heating equipment market size was valued at USD 2.91 billion in 2015 and is projected to grow at a CAGR of 5.6% from 2016 to 2025. Increasing investment in real estate and rapid industrialization is projected to drive demand over the forecast period.
Growing preference for energy-efficient certified products is anticipated to be one of the major factors influencing growth over the forecast period. Rising energy consumption in the industrial and residential sectors is projected to drive the preference for solutions that reduce overall operational costs and improve energy savings.
U.S. heat equipment market by product, 2014 - 2025 (USD Million)
The U.S. heating equipment market is further facilitated by the U.S. federal and state policies which provide tax credits, rebates, and supplementary incentives to support energy-efficient system installations and encourage the usage of renewable energy sources. Residential buyers in the U.S. can qualify for energy property credit, which allows residents to claim 10% of the cost of labor, professional preparation, and cost of installation.
Growing construction spending coupled with increasing repair & replacement activities are predicted to boost heating solutions growth. The construction sector in the U.S. is focused on developing sustainable and energy-efficient structures. The Leadership in Energy & Environmental Design (LEED) is a recognized green building certification program that is established by the U.S. Green Building Council (USGBC).
LEED focuses on reducing energy consumption by designing and developing energy-efficient projects. HVAC systems must comply with the requirements outlined by New Buildings Institute, Inc.’s publication titled “Advanced Buildings: Energy Benchmark for High-Performance Buildings.” Such policies have further enabled the development and installations of environmentally sustainable solutions.
The U.S. heating equipment market is projected to grow on account of increasing construction growth and favorable repair and replacement activities. In the production and processing of ferrous and non-ferrous metals, mining, oil and gas, and the automotive industry, heating equipment is crucial. The demand for products that are certified as energy efficient drive the market growth in the U.S. The demand for solutions that reduce operating costs and improve energy savings is expected to increase as energy consumption in the industrial and residential sectors continues to rise.
The increasing growth of the housing and construction sectors for single and multi-unit dwellings is expected to boost the demand for heating equipment. In addition, higher consumer spending habits are projected to increase the revenue of restaurants and other commercial establishments, which is expected to drive the demand for heating equipment in the commercial sector.
Heat pumps, boilers, furnaces, and unitary heaters are among the heating appliances that are predicted to have rapid growth in the United States. One of the key reasons driving the expansion of this market is the combination of rapid industrialization and rising demand for more advanced equipment. The rising need for home heating solutions that are energy efficient is also anticipated to increase market demand in the coming years.
Growing disposable income coupled with cheaper financing options has given companies more cash in hand to upgrade their capital equipment in offices, production facilities, and stores. Consequently, it is easier to invest in expensive equipment upgrades while loan rates are low, and hence, it is predicted to augment the market growth for heating equipment in the U.S.
The cost of installation is accompanied by high labor costs and the cost of drilling & excavation. A heating system requires fine-tuning and custom fabrication of parts during installation to ensure that it works smoothly, or the system is likely to fail prematurely. The cost of replacing old heating equipment includes removal & disposal of the old unit, lines, ducts, and wiring needed for the new system to run properly, thus limiting the demand for heating equipment.
Several policies such as The Leadership in Energy & Environmental Design (LEED) is established by the U.S. Green Building Council (USGBC), which is a recognized green building certification program LEED focuses on reducing energy consumption by designing and developing energy-efficient projects. Such policies further enhance the development and installation of heating solutions.
The heat pumps segment accounted for 33% of the total revenue in 2015 and is expected to grow at the highest CAGR from 2016 to 2025. Heat pumps are used for temperatures with moderate warming and cooling requirements. It can provide equivalent area conditioning at one-fourth operating cost than conventional HVAC systems.
Furnaces are the most common equipment used in the residential sector. The furnaces segment is projected to grow at a CAGR of 5.4% over the forecast period, on account of its high energy efficiency, easy availability of replacement parts, and quick warming capability.
According to the Consortium for Energy Efficiency (CEE), furnaces are widely used as domestic heating systems in the U.S., with 50% of households relying on natural gas furnaces for primary space warming. Moreover, furnaces cater for 52% of total yearly residential gas consumption and 78% of annual residential gas consumption.
Boilers are used for various applications such as water heaters, power generation, cooking, central heaters, and sanitation. They are extensively preferred in the commercial, institutional, industrial, as well as the educational sector.
Boilers are further segmented into two broad categories namely, water boilers and steam boilers. Hot water remains essential to daily requirements in kitchens and laundries. Increasing population & rapid development of housing projects is expected to augment the growth of the water boilers over the coming years. Steam boilers have been gaining preference in the domestic and industrial segments owing to ample consumption of steam in the industrial and commercial sectors.
The demand for boilers with a capacity of <10 MMBtu/hr was valued at USD 158.8 million in 2015. Boilers with the capacity ranging from 10-50 MMBtu/hr are generally used in residential, commercial, and industrial applications. They find major application in the food industry and other manufacturing units.
The industrial segment is likely to account for 59% of the revenue by 2025. Heating systems are widely used in the mining, automotive, and food & beverage industry. Increasing investment in developing the manufacturing sector of the U.S. is projected to influence demand over the coming years positively.
U.S. heating equipment market share by application, 2015 (%)
The U.S. residential sector is anticipated to grow at a CAGR of 5.4% from 2016 to 2025. Increasing repair & renovation activities are expected to drive the demand for upgraded technologies in the residential sector.
Key players include Robert Bosch LLC, United Technologies Corporation, Emerson Electric, Ingersoll-Rand Plc, Lennox International, American Heating Company Inc., Johnson Controls Inc., Honeywell International Inc., Burnham Holdings, Inc., and Rheem Manufacturing Company Inc.
Companies have invested in expanding production capabilities and acquiring certifications to cater to increasing market demand. They also comply with various energy efficiency requirements stated by regulatory authorities.
Base year for estimation
Actual estimates/Historic data
2014 - 2016
2017 - 2025
Revenue in USD Million and CAGR from 2016 to 2025
Revenue forecast, competitive landscape, growth factors and trends
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This report forecasts revenue growth and provides an analysis of the latest trends in each of the sub-segments from 2014 to 2025. For the purpose of this report, Grand View Research has segmented the U.S. heating equipment market on the basis of product and application.
Product Outlook (Revenue, USD Million, 2014 - 2025)
The U.S. boilers market product outlook
The U.S. boilers market size outlook
The U.S. boilers market technology outlook
Application Outlook (Revenue, USD Million, 2014 - 2025)
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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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