Variable Frequency Drive (VFD) Market Size, Share & Trends Report

Variable Frequency Drive (VFD) Market Size, Share & Trends Analysis Report By Product (AC, DC, Servo), By Power Range (Micro, Low, Medium, High), By Application (Pumps, HVAC, Conveyers), By End-Use, And Segment Forecasts, 2018 - 2025

  • Published Date: Jul, 2018
  • Base Year for Estimate: 2016
  • Report ID: GVR-2-68038-187-0
  • Format: Electronic (PDF)
  • Historical Data: 2014 - 2015
  • Number of Pages: 110

Industry Insights

The global variable frequency drive (VFD) market size was USD 18.32 billion in 2016. It is likely to progress at a CAGR of 6.7% over the forecast period. Increasing government regulations for reducing energy consumption to achieve a Net Zero Energy goal are one of the key trends stoking market growth. Additionally, growing penetration of connected devices in household, commercial, and industrial sectors, coupled with technological advancements, is projected to stir up the demand for variable frequency drives worldwide.

China variable frequency drive market

Global energy intensity, which is measured as primary energy demand needed to produce one unit of GDP, fell by around 1.8% in 2016. On a global scale, energy efficiency may lead to a reduction of greenhouse gas emissions by around 40.0% and electric drives consume around 70.0% of the global power generation. Thus, in order to reduce this energy consumption across various electric drives, variable frequency/speed drives are integrated into the system. Therefore, various investments to spread awareness regarding energy efficiency are on role.

Before the use of VFDs for pump applications, flow was controlled through valves by increasing system pressure. This procedure adversely affected pump efficiency. The technology incorporating variable frequency drives into pump systems has helped achieve desired flow by operating pump motor at variable speeds, thus resulting in reduced energy consumption.

Furthermore, increasing investments in energy efficiency are poised to augment the demand for energy efficiency, thereby bolstering the growth of the market. For instance, in 2016, total investment in energy efficiency amounted to USD 231 billion, where HVAC and control, lighting, and appliances recorded an investment of USD 22.86 billion, USD 27.42 billion, and USD 13.94 billion respectively.

With ever-increasing energy consumption and its unit rate, the operational engineers in various process industries are more tending towards use of variable frequency drives for optimum operation, productivity, and energy efficiency of machines. This is expected to fuel the demand for VFDs across applications such as HVAC and elevators.

Power Range Insights

The low power segment is estimated to dominate the market throughout the forecast period. This can be attributed to applications such as metals & mining, power generation, pumps, and conveyors. The market is dominated by Asia Pacific owing to a wide rate of adoption of VFDs in pumps, extruders, and conveyor applications across emerging economies such as India and South Korea and technologically advanced nations such as China and Japan. Thus, the global market for low power variable frequency devices is anticipated to reach USD 13.37 billion by 2025, registering a CAGR of 6.5% during the same period.

Product Type Insights

The AC drives segment is likely to emerge as the fastest growing segment in the variable frequency drive market over the forecast period. This is due to its widespread deployment in almost all forms of industries. Furthermore, its extensive application in medium and heavy industries, such as oil and gas, power generation, infrastructure, food & beverages, automotive, and pulp & paper is projected to support the growth of the segment. These industries host the maximum use of electric motors. In order to achieve high productivity and save energy costs, integration of variable frequency drives is being preferred.

Global variable frequency drive market

Thus, the segment is poised to reach USD 22.96 billion by 2025, expanding at a CAGR of 7.1% over the forecast period. On the other hand, the demand for DC is limited by its high maintenance cost and large number of technical irregularities. The segment is expected to register a CAGR of 5.6% over the forecast period.

Application Insights

In order to improve penetration of VFDs in applications such as pumps, electric fans, conveyors, HVAC, and others, the European Union has proposed to revise its goal under Energy Efficiency Directive to 30.0% energy efficiency target by 2030 from previous 20% target by 2020. This shall include incentives for SMEs to undergo energy audits, monitoring efficiency levels in new energy generation capacities.

Additionally, variable frequency drive is considered as one of the finest and most effective energy management tool in order to intensify operational performance of HVAC as well as energy efficiency. Moreover, these drives reduce overall maintenance and operational cost post its integration, thus, bolstering their demand in HVAC application.

End-Use Insights

In industries such as oil & gas and wastewater, hydraulic drives integrated with pumps are being replaced by variable frequency drives, in order to lower energy consumption and simultaneously smoothen operations of motors. This is estimated to penetrate into other pump applications as well over the forecast period, thereby escalating the growth of the market. Moreover, advancements in technology such as incorporation of sensors in VFDs are anticipated to help industries such as food & beverages and pulp & paper enhance operational experience.

Regional Insights

Asia Pacific held the leading share in the market in 2016. The growth of the region is backed by prominent emerging economies, wherein governments and other organizations are investing heavily in energy efficient devices. However, the Latin America region is expected to witness higher growth opportunities due to increase in regulations and law enforcements pertaining to use of energy efficient devices.

In the Europe region, investments made by government, along with laws under EU regulations, are bolstering the growth of the market. For instance, in order to reduce power losses and increase energy efficiency, the European Union in January 2017 regulated compulsory use of variable frequency drives for motors with output rating from 0.75 kW to 375 kW.

Variable Frequency Drive Market Share Insights

Some of the prominent companies operating in the market are ABB, Ltd.; Siemens AG; Schneider Electric SE; Rockwell Automation, Inc.; Eaton Corporation; Danfoss Global; WEG; General Electric Company; Hitachi, Ltd.; and Yaskawa Electric Corporation. Moreover, these key players are making high investments in R&D to develop innovative solutions and gain a competitive edge over others.

These companies have been investing on functionalities and compatibility of VFDs with electric drives. Thus, to withstand stiff competition in the market, companies are primarily focusing on technological advancements without compromising on increase in differential cost.

Report Scope

Attribute

Details

Base year for estimation

2016

Actual estimates/Historical data

2014 - 2015

Forecast period

2017 - 2025

Market representation

Revenue in USD Million and CAGR from 2017 to 2025

Regional scope

North America, Europe, Asia Pacific, Latin America, and MEA

Country scope

U.S., Canada, U.K., Germany, China, Japan, South Korea, Brazil, Mexico, and India

Report coverage

Revenue forecast, company market share, competitive landscape, growth factors, and trends

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Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and analyzes industry trends in each of the sub-segments from 2014 to 2025. For this study, Grand View Research has segmented the global variable frequency drive market report based on product type, power range, application, end-use, and region:

  • Product Type Outlook (Revenue, USD Million, 2014 - 2025)

    • AC Drives

    • DC Drives

    • Servo Drives

  • Power Range Outlook (Revenue, USD Million, 2014 - 2025)

    • Micro

    • Low

    • Medium

    • High

  • Application Outlook (Revenue, USD Million, 2014 - 2025)

    • Pumps

    • Electric Fans

    • Conveyors

    • HVAC

    • Extruders

    • Others

  • End-Use Outlook (Revenue, USD Million, 2014 - 2025)

    • Oil & Gas

    • Power Generation

    • Industrial

    • Infrastructure

    • Automotive

    • Food & Beverages

    • Others

  • Regional Outlook (Revenue, USD Million, 2014 - 2025)

    • North America

      • U.S.

      • Canada

    • Europe

      • U.K.

      • Germany

    • Asia Pacific

      • China

      • Japan

      • India

      • South Korea

    • Latin America

      • Brazil

      • Mexico

    • MEA

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