The United States HVAC Equipment Market size is estimated at USD 45.46 billion in 2024, and is expected to reach USD 60.14 billion by 2029, growing at a CAGR of 5.76% during the forecast period (2024-2029).
The HVAC equipment market is thriving in the United States, fueled by various factors. Given the vast geographic expanse of the United States, temperatures can swing from extreme cold to intense heat, varying by state, city, and coast. This climatic variability makes HVAC installations essential in residential/commercial spaces. As a result, the pressing need to regulate indoor temperatures, regardless of external weather conditions, bolsters the HVAC industry's growth in the nation.
In the United States, the government is ramping up its building renovation projects to enhance energy efficiency. These energy-efficient upgrades curtail greenhouse gas emissions and lower energy bills for homeowners and businesses. They bolster indoor air quality, underscoring their significance for public health and fostering a conducive environment for market growth.
For example, in June 2024, the US General Services Administration (GSA) Administrator unveiled an investment plan: channeling USD 80 million from the Inflation Reduction Act (IRA) into intelligent building technologies. These technologies aim to cut emissions, boost efficiency, trim costs, and elevate comfort levels across approximately 560 federal buildings.
The growing consumer awareness regarding sustainability and energy efficiency is also driving the country's adoption of smart home technologies, creating a favorable ecosystem for the growth of innovative HVAC systems. For instance, according to the Consumer Technology Association (CTA), the US smart home hardware sales revenue was estimated to reach USD 23.5 billion in 2023, compared to USD 19.70 billion in 2018. Hence, the confluence of such trends is expected to support the studied market's growth during the forecast period.
Factors such as higher energy consumption, especially of legacy/older HVAC systems, and the high cost of replacement and new installation challenge the studied market's growth. The impact of such trends has intensified in recent years owing to the changing geopolitical dynamics between the United States and China, as trade restrictions continue to influence the supply chain and pricing of components/HVAC systems in the region.
Starting in 2023, new regulations mandate that all HVAC systems in the country must achieve a seasonal energy efficiency ratio (SEER) between 14 and 15. Arizona legislators argue that these new mandates further strain an already challenging real estate market. They are advocating for a six-month extension to ease compliance, but this request remains unapproved.
With the introduction of these mandates and the gradual elimination of specific refrigerants in residential air conditioning, the HVAC industry is witnessing a surge in demand for replacement systems that align with the new standards. While these advanced systems promise enhanced energy efficiency and environmental benefits, inflationary pressures and other factors are inflating their costs. Suppliers project a cost increase of up to 20%, translating to steeper prices for homeowners in 2023.
The US HVAC equipment market features a diverse array of vendors, including industry leaders such as Daikin, Lennox, Trane, Mitsubishi Corporation, Nortek Air, Ingersoll Rand, and Carrier. These companies serve a wide spectrum of end customers. With the growing adoption of HVAC systems across residential, commercial, and industrial sectors, there has been a marked uptick in strategic execution plans, primarily driven by a heightened focus on exploring new revenue avenues.
Companies are aligning their strategies with industry peers to navigate the shifting technological and regulatory landscape and broadening their reach through inorganic methods like mergers and acquisitions. This trend is poised to heighten competition among market players in the coming years.
Market vendors are channeling investments into product development, capacity enhancement, and geographical expansion, all in response to the rising acceptance of HVAC technology. Key competitive strategies in play include acquisitions, partnerships with industry players, and the introduction of new products and services.
Given the industry's fragmented nature, partnerships and alliances have surfaced as pivotal competitive strategies. As a result, vendors are increasingly seeking collaborations with technology providers to enhance their integrated service offerings.
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