North America Air Conditioning Equipment Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

North America Air Conditioning Equipment Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The North America Air Conditioning Equipment Market is expected to register a CAGR of 8.1% over the forecast period (2022 - 2027). The increasing number of residential and commercial users, combined with government regulations for energy efficiency and eco-friendly equipment, is driving the adoption of air conditioners.

Key Highlights

• For instance, The Federal Energy Management Program (FEMP) has set standards for minimum energy efficiency requirements with Energy Star. For example, when the air conditioner's minimum efficiency starts from 9.5 EER and 11.0 IEER and goes up to 15.0 SEER and 12.5 EER (for single-phase), the efficiency rating varies based on the equipment size and capacity. ​
• Moreover, the rooftop air conditioner standards in North America are expected to take effect, which covers new units found in low-rise buildings, such as hospitals, schools, and big-box stores. The effect was determined in two phases, of which increased the minimum efficiency by about 10% already came into existence on January 1, 2018, and by 25%-30% is expected to be covered by January 1, 2023. Such developments are expected to further increase the demand from the commercial sector.
• However, with no clear direction from the federal government about the long-term approach to managing HFC refrigerants, the demand forecast of the studied market is declining. It is further anticipated that most OEMs will build toward the toughest regulatory environment and consolidate their portfolio around this to drive long-term business sustenance.
• Further, with the recent outbreak of Covid-19, decreasing consumer spending capacity has influenced the market demand for air conditioners in the region, with demand for ductless splits maintaining a steady pace due to the cost-effective nature of the products. This is expected to change over the coming months, with the demand for centralized AC equipment from the sector gaining traction post-COVID-19 impact.

Key Market TrendsUnited states is expected to hold significant demand

• The United States commands a prominent share of the region's demand for air conditioners due to the sheer size of the population, higher penetration rates, and climatic conditions in various states. According to Warner Service, about 84% of all US homes have some air conditioning type, and it is more common to have centralized air conditioning in the country.
• The country's demand for energy due to air conditioning is growing at an exponential rate. According to EIA, the United States will gain over 58 million people and 24 million households by 2050. The US residence's total square footage is expected to expand by 33%, with 71% of households being single-family homes that typically have more air-conditioned floor space. Such developments are expected to further expand the demand in the country.
• According to the US Department of Energy, air conditioners in the United States use about 6% of all the electricity with an annual cost of USD 29 billion to homeowners. A major share of the country's air conditioning systems employ halogenated chlorofluorocarbons (HCFCs) as a refrigerant; these are being gradually phased out with most production and imports stopped by 2020, and all production and imports are being stopped by 2030.
• Moreover, the shipments of air conditioners are expected to increase during the forecast. According to Air-Conditioning, Heating, and Refrigeration Institute, the shipments of air conditioners from the United States accounted for 6.28 million in 2021 compared to 5.91 million in 2020. Such growth indicates the demand for Air conditioner manufacturers in the country.

Indoor Packaged and Roof Tops is expected to hold significant market share

• Packaged AC units are used when air conditioning is required due to climate or in case of an inadequate main source of central air conditioning. For indoor installation of packaged air conditioners, they must be vented to push the heat from the controlled environment; these solutions are rarely the first choice as they are not efficient, and installation costs are comparatively higher than that of mini-splits and other options available in the market.
• A prominent share of the applications of such solutions is seen in commercial space owing to the demand for high and fast cooling requirements; the residential sector is expected to command a significantly smaller share of the market demand.
• In addition to this, the packaged & rooftop air conditioning solutions providers are preparing for the energy standards that are to be revised again in 2023, which was agreed upon during the previous revision in 2018. As part of the rooftop, air conditioner standards that cover the new units found on the buildings such as schools, hospitals, and big box stores were to take effect in two phases.
• Further, according to the US Census Bureau, the public construction spending on commercial projects accounted for USD 3.54 billion. However, despite the drop in spending for new commercial constructions, the need for energy conservation is driving the replacement of old AC conditioners with energy-efficient indoor packaged and Rooftop air conditioners.

Competitive Landscape

The North Amrica Air Conditioning Equipment Market is moderately fragmented due to many valve market players. Factors such as industrial automation, increased commercial and residential constructions in the region is driving the Vendors to expand the production capacity, exercise merger and acquistion and invest in research and development for newer innovations in the Market.

• In June 2022 - Carrier launched single-stage split system air conditioners (Compliant with upcoming 2023 Department of Energy's test procedures and efficiency requirements). The product has earned SEER2 rating of up to 16.5 (17 SEER), and EER2 up to 13.5 (14.5 EER). Additionally, the products have reduced SKUs for the southern regions of America.
• In February 2022 - LG launched range of AI Dual Inverter air conditioners. Powered by AI. The products are desinged with multiple in-built sensors and dual rotary compressors technology. Additionaly the products are equipped with anti-virus protection filter which is coated with Cationic Silve that is capable of 99% visrus and bacteria.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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