U.S. HVAC Systems Market Size, Share & Trends Analysis Report By Product (Heating, Ventilation, Cooling), By End-use (Residential, Commercial, Industrial), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The U.S. HVAC systems market size was valued at USD 15.16 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 6.0% from 2021 to 2028. Availability of high-efficiency equipment, extreme climate conditions, and growing construction activities are primary factors driving the country’s HVAC (Heating, Ventilation, and Air Conditioning) demand. Similarly, increased demand for energy-efficient systems fueled by growing environmental awareness will play a pivotal role in driving market demand. Although the market experienced a slight slump in 2020 due to the spread of coronavirus, key companies operating in the country have experienced elevated sales in the second half of the year. The trend is expected to continue over the coming years, thus, providing impetus to the market growth.

The market is expected to witness an increase in sales with the availability of tax credit and rebate programs as well as other monetary benefits associated with the purchase of energy-efficient systems. Governments at various levels, namely Federation and state governments have established standards to improve HVAC systems' operation. The governments have set forth some manufacturing processes for energy-efficient systems, thereby reducing environmental hazards and carbon footprints. In addition to tax and rebate programs, several governments also offer rewards for promoting energy efficiency through low power consumption or the use of renewable energy products, and subsequently attracts demand.

For instance, as per the Bipartisan Budget Act of 2018, the revised tax credit would be applicable on residential renewable energy products till 2021. Up to 30% of the total installation costs would be provided as tax credit benefits on products such as geothermal heat pumps and central air conditioning, among others. Additionally, the COOLAdvantage Program, launched initiative by the New Jersey government body, offers rebates and tax credit for energy-efficient air conditioners or central heat pumps. Similarly, Con Edison, an energy company based in New York, provides rebates on purchase energy-efficient room air conditioners. Over the forecast period, the launch of similar programs would play a pivotal role in driving the market growth.

The U.S. market is one of the largest consumers of air conditioning systems, only behind China in terms of unit sales. According to the U.S. Department of energy, seventy-five percent of homes in the U.S. have air conditioners installed. Therefore, in addition to new units, replacement demand for existing systems is a major factor driving market growth. Each year in the country, 3 million heating and cooling systems are replaced. Thus, the market is expected to experience substantial growth aided by the replacement cycles of the existing systems in the country.

High penetration of the HVAC equipment also leads to increased maintenance and repair demand. This maintenance includes frequent cleaning to remove any sediment and dust settled on the filters to avoid damage, leading to the failure of the entire system. Similarly, several components or parts such as filters, motors, refrigerants, coolants, etc., need to be replaced or repaired frequently owing to their short lifespan and operating life cycle. The frequent repair and maintenance needs add to the operating costs of the equipment. Studies suggest that every year, almost USD 14 billion is spent on HVAC services and repairsMoreover, the HVAC systems' installation cost can cost the customer anything between USD 3,000 to USD 30,000 or even more. Thus, the high upfront and maintenance cost of the HVAC systems is expected to hamper the growth of the U.S. HVAC systems market.

Product Insights

The cooling segment held the largest revenue share in 2020, accounting for over 50% of the overall revenue. The cooling segment comprises air conditioning units, including room air conditioners, unitary air conditioners, cooling towers, split and packaged systems, and portable units. Window air conditioning systems are available at a lower cost than other air conditioners and offer easy installation. Packaged air conditioning units are available in capacities ranging from 3 tons to 15 tons and are commonly used in places such as small halls, telephone exchanges, restaurants, and homes. Centralized air conditioning systems are used for large buildings such as airports, shopping malls, and hotels. Split air conditioning systems generally have one outdoor unit and up to five indoor units. The diverse usability of air conditioning systems is expected to drive the segment demand over the coming years.

The ventilation segment is anticipated to record a healthy growth from 2021 to 2028. Ventilation is the process of replacing or changing indoor air to control and improve the air quality of the indoor space. Ventilation systems remove excess odors, humidity, pollutants, and other contaminants from the indoor area. It is the most energy-efficient and cost-effective way to cool and improve the air quality of the buildings. Owing to the aforementioned benefits, ventilation equipment is expected to continue gaining traction over the forecast period.

End-use Insights

The commercial HVAC equipment segment is expected to expand at a CAGR of exceeding 6% from 2021 to 2028, owing to the development of new energy-efficient HVAC systems and technological advancements. Heating and cooling systems installed in commercial spaces are larger and have complex management systems. Therefore, commercial places such as shopping malls, airports, and hotels use advanced technologies such as remote systems to maintain and diagnose HVAC systems to reduce maintenance costs by predictive maintenance. As a result, upgrading existing systems to install new advanced systems is anticipated to bolster commercial HVAC systems' demand.

Industrial HVAC equipment is used in industrial infrastructures such as manufacturing plants, airports, cold chains, and warehouses. These buildings are usually larger than residential and commercial spaces and have products that are required to maintain a particular temperature or specific climatic condition. Thus, industries generally need larger, robust, reliable, and energy-efficient HVAC systems. Some of the industrial HVAC systems include furnaces, boilers, thermostats, and chillers. The industrial segment is expected to register a slower CAGR owing to the low frequency of upgrades or replacements in industries.

Regional Insights

The Midwest held a substantial market share in 2020, accounting for more than 20% of the global revenue. The region is characterized by a large number of manufacturing firms, especially in Illinois, Ohio, and Michigan. More manufacturing plants create demand for more HVAC systems as they generally have to maintain a controlled indoor environment. Manufacturing plants also cover large spaces, thus, requiring more units as compared to small office/ house spaces.

According to a survey conducted by the U.S. Census Bureau in 2019, the western region has the highest population translating to a larger residential sector. Additionally, the region also has a higher median household income led by states such as Alaska, California, Washington, and Colorado. The large number of households coupled with higher annual income is expected to upkeep the regional market in the next seven years.

Key Companies & Market Share Insights

The key players operating in the market include, Lennox International, Inc.; Carrier Corporation; Johnson Controls International plc; Mitsubishi Electric U.S. Inc.; and Daikin Industries, Ltd. Companies are investing in research and developments to provide technologically advanced products. For instance, In February 2020, Johnson Controls International plc introduced wrap-around heat exchangers to its indoor and outdoor air handling unit’s product line. This new product is expected to offer efficient dehumidification benefits to the existing HVAC air handling systems.

Additionally, companies are also engaging in inorganic growth strategies such as mergers and acquisitions, strategic partnerships, and geographical expansion to stay afloat in the competitive market scenario. For instance, in September 2019, Trane announced its acquisition of Arctic Chiller Group, which is an HVAC manufacturer based in Canada. This acquisition provided Trane with access to high-efficiency air and water cooler modular and process chillers used for commercial HVAC applications. The acquisition also falls in line with Trane’s focus on achieving energy efficiency and sustainability. Some prominent players operating in the U.S. HVAC (Heating, Ventilation, and Air Conditioning) systems market are:

• Carrier Corporation

• Daikin Industries, Ltd.

• Emerson Electric Co.

• Johnson Controls International plc

• Lennox International, Inc.

• Trane Technologies

U.S. HVAC Systems Market Report Scope

Segments Covered in the Report

The report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For this study, Grand View Research has segmented the U.S. HVAC systems market report based on product, end-use, and region.

• Product Outlook (Revenue, USD Billion, 2017 - 2028)

  • Heating

  • Ventilation

  • Cooling

• End-use Outlook (Revenue, USD Billion, 2017 - 2028)

  • Residential

  • Commercial

  • Industrial

• Region Outlook (Revenue, USD Billion, 2017 - 2028)

  • Northeast

  • Southeast

  • Midwest

  • Southwest

  • West