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, 2023 - 2030

Report Overview

The U.S. HVAC systems market size was valued at USD 17.15 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 6.5% from 2023 to 2030. Global warming and the resultant extreme climatic conditions will help uptick the market demand over the forecast period. In addition, the demand for energy-efficiency equipment together with the growing real estate market will also upkeep HVAC demand in the U.S. over the next few years. 2020 was an uncertain year with the onset of the pandemic, with an unfavorable impact on several sectors in the first two quarters.

Furthermore, the U.S. government also offers rewards to promote low power consumption or the use of renewable energy sources. On account of rising concerns regarding global warming, standards established by the U.S. government to keep a check on HVAC systems operations will play a pivotal role in driving the demand. In addition to efficiency standards on the demand side; standardizing manufacturing processes on the supply side of the market has also helped tremendously in reducing hazards to the environment and carbon emissions. For instance, tax credits are offered approximately 20-30% of the installation cost on energy-efficient products. 

As such, the HVAC industry also witnessed a minor setback in terms of slow sales; however, the last two quarters of 2020 registered above-average sales figures. Therefore, the market growth matched the 2017 levels in 2020 without the much-anticipated massive dip in sales. The U.S. customers have an access to favorable tax credit and rebate programs making HVAC systems a lucrative commodity in the country. In addition, the citizens also enjoy several other monetary benefits ascribed to the purchase and installation of energy-efficient systems with minimum impact on the environment.

Another recent example is the New Jersey government’s COOLAdvantage Program, which aims at offering tax credits and rebates on using or installing energy-conserving central heat pumps or Air Conditioners (ACs). All these monetary programs and favorable government support will help the product demand thrive over the long term. After China, the U.S. AC systems market is the largest, in terms of volume sales. Over 70% of homes in the U.S. have ACs installed as per a report published by the U.S. Department of Energy (DOE). Therefore, there is over 20-30% market opportunity for OEMs in terms of new unit sales as well as the oncoming replacement demand due to aging products.

Statistics suggest that on an average 2-3 million heating & cooling systems are replaced in the U.S. indicating avenues for favorable growth. In addition to the new and replacement demand, maintenance & repair activities will also witness an uptick. Frequent cleaning to avoid damage or failure of the entire system is another potential revenue stream for existing OEMs. Similarly, the replacement of parts and components, such as motors, coolants, and filters, due to their shorter lifespan will also help OEMs thrive in the otherwise competitive industry. Research suggests that over USD 10 billion are spent each year on HVAC repair & maintenance services. Although this could create a potential growth area for OEMs by expanding their service offering along with products, it could also pose a challenge to product sales.

Product Insights

On the basis of products, the overall market has been further divided into three main types, namely, heating, ventilation, and cooling. The cooling product segment dominated the market in 2022. The segment accounted for the largest share of 57.8% of the total revenue in the same year. The cooling segment is further projected to retain its dominant market position expanding at the fastest growth rate during the forecast period. This product category largely comprises unitary ACs, split & packaged systems, portable ACs, and cooling towers.

These products are ideal in commercial as well as residential settings making them a popular choice. As the real estate sector keeps growing, the demand for such cooling products will continue to grow. Replacing indoor air to improve or control the quality of an indoor space is referred to as ventilation. The ventilation product segment is estimated to register a significant growth rate over the next eight years as the ventilation is pivotal to any closed space to remove odor, pollutants, humidity, etc. Ventilation, over the years, has proven an efficient way of improving the building’s air quality.

End-use Insights

On the basis of end uses, the overall market has been further segmented into residential, commercial, and industrial. HVAC products are used in residential, commercial, and industrial buildings. The demand for HVAC systems in the commercial end-use sector is anticipated to witness the fastest growth rate of more than 7.0% from 2023 to 2030. The growth of the commercial segment can be attributed to the rapidly expanding real-estate sector in the U.S., particularly commercial spaces, such as malls, hotels, airports, and offices.

HVAC also forms an integral part of the industrial sector, particularly in manufacturing plants or cold chain storage spaces. It is critical to maintaining the temperature in such spaces to maintain the quality of the products and, hence, the demand for HVAC systems is gaining traction in the industrial end-use segment. Some of the industrial HVAC systems include furnaces, boilers, thermostats, and chillers. However, the industrial segment is expected to register a slightly sluggish growth rate owing to the low frequency of upgrades or replacements in industries.

Regional Insights

On the basis of regions, the market has been sub-segmented into Northeast, Southeast, Midwest, Southwest, and West. The market in the Midwest region of the country accounted for the maximum revenue share of more than 22.4% in 2022. The western region of the U.S. boasts the highest population according to the U.S Census Bureau report published in 2019. This has driven the growth of the residential sector. In addition, the median income in most states on the west coast is translating to the high consumer disposable income levels. Furthermore, varied weather conditions in the U.S. throughout the year demand the installation of HVAC systems to maintain ambient indoor temperatures.

The western part of the country accounted for a significant revenue share in 2022, a trend expected to continue over the long term. Illinois, Michigan, and Ohio in the Midwestern part of the U.S. have the presence of a large number of manufacturing units. Therefore, the demand for industrial HVAC systems in the region is high. The regional market is expected to grow at a significant CAGR from 2023 to 2030. On the other hand, the Southeast region is estimated to expand at the fastest growth rate during the forecast period.

Key Companies & Market Share Insights

The industry is competitive and moderately consolidated with vendors with a global presence dominating the space. In 2021, key OEMs in the market were Carrier Corporation, Lennox International, Inc., Mitsubishi Electric U.S. Inc., Daikin Industries, Ltd., and Johnson Controls International Plc. Research and development, particularly in terms of producing region-specific products aligning with the climatic conditions, will be a key success factor for most players. Furthermore, IoT penetration has increased over the years and consumers are often fascinated by-products that boast the latest features while also being pocket-friendly. A focus on these factors over the short and mid-term will help vendors maintain a profitable level of sales.

In addition, companies are also engaging in inorganic growth strategies, such as mergers & acquisitions, strategic partnerships, and geographical expansions, to stay afloat in the competitive market scenario. For instance, in September 2019, Trane acquired the 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 in the U.S. HVAC systems market include:

• Carrier Corporation

• Daikin Industries, Ltd.

• Emerson Electric Co.

• Johnson Controls International plc

• Lennox International, Inc.

• Trane Technologies

Recent Development

• In June 2023, Automated Logic Corporation, a part of Carrier, announced that it had signed an agreement for the acquisition of Standard Plumbing Heating Controls (SPHC), a Washington-based independent Automated Logic Dealer. SPHC provides HVAC and building automation services for various establishments, including colleges, schools, commercial buildings, universities, and healthcare facilities

• In June 2023, Daikin announced the opening of the Daikin Sustainability & Innovation Center in Washington, D.C. to promote innovation and environmental technologies. The center will focus on the development of sustainable and efficient HVAC systems, including heat pumps and inverters, while also promoting the transition to the low-global-warming-potential refrigerant R32

• In May 2023, Johnson Controls introduced the ‘Johnson Controls Ducted Systems (DS) Solutions App’ to expand their collection of commercial and residential contractor resources. The application is free and offers instant access to information regarding residential and commercial equipment to contractors, thus helping streamline the installation, troubleshooting, and maintenance processes

• In April 2023, Daikin announced the commencement of construction of its new heat pump facility in Poland, which is expected to begin production by July 2024. The facility will serve as the company’s European production base and will aid in augmenting the production in Belgium, Germany, and the Czech Republic. The development will help address the demand for heat pumps in the region, which grew by an average annual rate of 10% in 2021 to reach sales of 1 million units

• In February 2023, GE Appliances Air and Water Solutions, a part of Haier, announced the completion of a multi-year launch of their Residential Ducted HVAC product portfolio for professionals, which has been made available through select wholesale distribution partners. The lineup includes heat pumps, air conditioners, evaporator coils, air handlers, gas furnaces, and packaged units with a range of efficiencies

• In January 2023, Lennox Industries announced the launch of the Lennox S40 Smart Thermostat and accessories, which includes the Smart Air Quality Monitor that detects and tracks carbon dioxide, particulates, and volatile organic compounds in the indoor environment; and the Smart Room Sensor, which offers accurate humidity and temperature readings to the S40 Smart Thermostat that is part of the ‘Ultimate Comfort System’ HVAC system

• In January 2023, Trane Technologies demonstrated the connectivity of its energy-efficient and sustainable Trane and American Standard Heating and Air Conditioning solutions with other smart home devices and appliances, at the Consumer Electronics Show in Las Vegas. It follows from the company’s launch in December of the Trane Link and American Standard Link technology that uses real-time data for aiding better efficiency in home HVAC service calls

• In November 2022, Carrier released a new version of its Hourly Analysis Program (HAP) peak load and energy modeling software to address the needs of HVAC design engineers. This version has helped in drastically cutting down the time required for building model creation from a few days to a couple of hours. It leverages the U.S. DOE’s EnergyPlus calculation engine to bring advanced system simulation capabilities, and the ASHRAE Heat Balance load calculation method for more accurate representation of building physics

U.S. HVAC Systems Market Report Scope 

U.S. HVAC Systems Market Report Segmentation

The report forecasts revenue growth at regional level and provides an analysis on the latest trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the U.S. HVAC systems market report on the basis of product, end-use, and region:

• Product Outlook (Revenue, USD Billion, 2018 - 2030)

  • Heating

  • Ventilation

  • Cooling

• End-use Outlook (Revenue, USD Billion, 2018 - 2030)

  • Residential

  • Commercial

  • Industrial

• Region Outlook (Revenue, USD Billion, 2018 - 2030)

  • Northeast

  • Southeast

  • Midwest

  • Southwest

  • West