HVAC Renewable Materials Market Analysis (2024 – 2030)

As of 2023, the Global HVAC Renewable Materials Market had a valuation of $38.18 Billion, with projections indicating a growth to $55.17 Billion by 2030. The market is anticipated to expand at a Compound Annual Growth Rate (CAGR) of 5.4% during the forecast period of 2024-2030. This surge in market value is chiefly propelled by the increasing emphasis on reducing energy expenditures and augmenting energy efficiency. The adoption of renewable HVAC systems is on the rise, spurred by a heightened focus on energy conservation due to concerns about climate change and escalating oil and gas prices.

INDUSTRY INSIGHTS:

In pursuit of emission reduction objectives, environmental engineers collaborate to develop sustainable technologies. Concurrently, governments are formulating sustainability targets to safeguard natural resources and the global environment. Countries are progressively diminishing the carbon footprint of their electricity infrastructures through the advancement of renewable energy sources. The widespread integration of renewable energy is fundamentally reshaping daily lifestyles and impacting various economic sectors. Notably, the HVAC sector stands out as one of the most significantly affected, primarily due to the substantial energy consumption of HVAC systems. The adoption of renewable energy sources is transforming the HVAC sector and its associated systems, thereby influencing their operational mechanisms, requisite expertise, and ecological and societal ramifications. The efficient utilization of renewable HVAC equipment serves to deter wasteful energy practices in building heating and cooling processes. Energy-efficient heating, ventilation, and air-conditioning (HVAC) systems refer to systems that deliver comparable performance to traditional HVAC systems while utilizing fewer energy resources.

COVID-19 IMPACT ON THE HVAC RENEWABLE MATERIALS MARKET

The global economy experienced a substantial impact from the outbreak of COVID-19. This impact manifested through workforce constraints, travel limitations, disruptions in the supply chain, and a decrease in demand and spending across multiple sectors. Numerous manufacturing firms were compelled to suspend operations at their facilities owing to partial or complete lockdowns imposed across regions. Consequently, a noticeable downturn was observed in infrastructure development and installation projects, particularly within the construction market. The global supply chain suffered due to material shortages and disruptions in electronic components supply. Planned projects faced delays, and reductions in capital budgets posed challenges to the global economy. In comparison to other industries, key players in the renewable HVAC system market endured a slight negative impact from the COVID-19 crisis. The short-term performance of the renewable HVAC system market was adversely affected by reduced business activities, with a gradual recovery anticipated in the post-pandemic period.

MARKET DRIVERS:

Expansion of the Construction Industry as a Growth Catalyst:

The burgeoning construction sector is a primary driver of the expanding market for Renewable HVAC equipment. This growth is propelled by increased investments in infrastructure and the rising disposable incomes across major nations. The pervasive impact of climate change underpins the escalating demand for HVAC systems globally. With rising temperatures and erratic weather patterns, HVAC equipment is increasingly viewed as a prudent investment by consumers. Additionally, an upsurge in consumer preferences for enhanced comfort levels has further bolstered the demand for renewable HVAC systems.

Demand for Reduced Energy Expenditure as a Growth Propeller:

During the projected period, one of the pivotal factors positively influencing the global market for energy-efficient renewable HVAC systems will be the imperative to curtail energy consumption and operational costs. A diverse array of heating, cooling, and climate management systems are deployed across numerous residential, commercial, and industrial buildings worldwide to ensure thermal comfort and acceptable indoor air quality levels. Excessive energy consumption for heating and cooling operations elevates the operational expenses for building owners or operators. Consequently, the demand for energy-efficient renewable HVAC systems is expected to surge in response to the escalating need to lower building energy consumption rates and operational costs.

Proliferation of Government Initiatives towards Renewable Energy Infrastructure Creates Lucrative Opportunities:

Governments play a pivotal role in advancing initiatives aimed at energy conservation, the construction of smart buildings, and infrastructural transformations. Various regulatory frameworks and policies have been instituted to enhance energy efficiency and diminish a building's reliance on non-renewable energy sources, particularly in lighting and HVAC systems. The heightened investments in grid digitalization, facilitated by the implementation of advanced communication technologies, are poised to propel the growth of the home energy management system market.

MARKET RESTRAINTS:

Cost Implications of Renewable HVAC Systems Hindering Widespread Adoption:

The substantial setup and maintenance costs associated with renewable HVAC systems pose a significant barrier to market penetration. Renewable HVAC systems encompass high-end equipment, coupled with expenses related to installation and ongoing maintenance, thereby escalating the overall costs. Moreover, the requisite regular maintenance and inspections for optimal functionality further contribute to the operational expenditures, which might not align favorably with the budgets of many consumers.

Lack of Public Awareness and Skilled Workforce Shortage in the BEMS Sector Negatively Impacting Market Growth:

A noteworthy challenge hindering market growth is the prevalent lack of awareness among the public and consumers regarding the myriad benefits of building energy management systems (BEMS) and the underutilization of renewable HVAC systems in residential and commercial settings. Furthermore, the installation of these systems necessitates a skilled workforce capable of analyzing system parameters and configuring them for optimal performance. The existing shortage of skilled labor in the market exacerbates this challenge, thereby acting as a pivotal factor decelerating the market growth trajectory.

HVAC RENEWABLE MATERIALS MARKET – BY TYPE

• Geothermal Heat Pumps
• Solar HVAC Systems
• Hydronic Heating Technology
• Ice-Powered AC Units
• Wind Power Heaters

Segmented according to end-use, the HVAC renewable market includes Geothermal Heat Pumps, Solar HVAC Systems, Hydronic Heating Technology, Ice-Powered AC Units, and Wind Power Heaters. Among these, Geothermal Heat Pumps emerged as the preferred renewable HVAC system. During this period of transition, the adoption of green electricity has become commonplace. Utilizing geothermal energy stands out as an ecological method for heating and cooling. Geothermal heat pumps have become the favored sustainable heating solution for a majority of homeowners and building proprietors. These systems rely on the consistent subsurface temperatures of the Earth to store and transfer heat. Given that the Earth's core is notably warmer than its surface, geothermal heaters circulate a refrigerant through subsurface pipes to naturally generate heat. The high-efficiency rate of this sustainable heating technology leads to reduced electricity usage costs. Nevertheless, an environmental concern arises due to the carbon footprints of geothermal heat pumps. The construction process exposes subterranean environments to the Earth's surface, resulting in limited emissions of sulfur dioxide and carbon dioxide into the atmosphere. Despite these emissions, the lower carbon footprint of geothermal heat pumps maintains their position as a more environmentally friendly alternative to traditional HVAC systems.

Solar HVAC Systems also gained significant traction in 2021. The defining feature of these HVAC systems lies in their direct reliance on solar energy, effectively reducing emission pollution and driving market growth. Green heating and cooling systems utilize Photovoltaic (PV) panels to generate electricity and regulate indoor temperatures. With an efficiency range of 15% to 22%, PV panels contribute to the sustainability of structures by producing emission-free electricity. This technology offers reasonable pricing, enabling users to lower their recurring electricity expenses. Owners of buildings equipped with PV panels typically recover their initial investment within three to six years. Furthermore, they can sell any surplus power back to the grid, thereby creating a passive income stream.

The United States and other developed nations are committed to high sustainability goals. America, for instance, is leveraging wind energy to decarbonize its electricity infrastructure, a resource that individuals can also tap into for HVAC power needs. Environmental engineers have developed wind-powered heaters using small windmills that attach to heat sources and emit warmth into radiators. These innovative systems provide heating without generating any pollution.

HVAC RENEWABLE MATERIALS MARKET - BY END-USE

• Residential
• Commercial
• Industrial

Categorized by end-use, the HVAC renewable market encompasses Residential, Commercial, and Industrial sectors. Among these, the Residential sector dominated the market for renewable HVAC systems in 2021, boasting a revenue share of 40.1%. The increasing availability of multi-family and single-family residences has opened up substantial opportunities for the residential renewable HVAC market. Consequently, the segment's estimated value was notably high in 2021. Demand for home HVAC (Heating, Ventilation, and Air Conditioning) systems is expected to remain relatively stable in established regions worldwide, while experiencing moderate growth in developing regions. This growth is attributed to the expanding populations in developing nations, maturing markets in industrialized countries, heightened public awareness of climate change, and the desire for more affordable energy prices.

The Commercial renewable HVAC sector holds significant potential for expansion. From 2024 to 2030, the category is projected to witness a Compound Annual Growth Rate (CAGR) of over 6.0% in the renewable HVAC systems market. Several trends, ranging from automated systems to green and smart technologies, are expected to shape the future of the commercial renewable HVAC industry. As the COVID-19 pandemic transitions to an endemic state and permanent work-from-home models shift toward hybrid operational paradigms, the need for renewable HVAC systems in commercial settings is anticipated to increase.

HVAC RENEWABLE MATERIALS MARKET - BY REGION

• North America
• Europe
• The Asia Pacific
• Latin America
• The Middle East
• Africa

Regionally, the HVAC Renewable Materials Market is segmented into North America, Europe, Asia Pacific, Latin America, the Middle East, and Africa. In 2021, the Asia Pacific region held the dominant position in the market for renewable HVAC systems, boasting a revenue share exceeding 40.0%. The region has witnessed substantial growth attributed to rapid urbanization, population expansion, and increased consumer disposable income. Notably, the commercial sector has experienced recent growth, hinting at potential regional expansion in the future. North America followed closely as the second-largest consumer of renewable HVAC systems in 2021, with Europe trailing closely behind. While the market for HVAC systems as a whole has matured, replacement sales driven by aging infrastructure or retrofit projects are generating new revenue streams for Original Equipment Manufacturers (OEMs) in addition to growth in the services and maintenance sector. Over the forecast period, the region is estimated to observe a CAGR exceeding 5.5%.

HVAC RENEWABLE MATERIALS MARKET - BY COMPANIES

Key players in the HVAC Renewable Materials Market include:

1. Apollo America
2. Azbil
3. Belimo
4. Daikin Industries
5. Delta Controls
6. Distech Controls
7. Emerson Electric
8. Honeywell
9. ICM Controls
10. Ingersoll-Rand
11. Jackson Systems
12. KMC Controls
13. Lennox
14. LG Electronics
15. PECO
16. Sauter
17. Schneider Electric

NOTABLE DEVELOPMENTS IN THE HVAC RENEWABLE MATERIALS MARKET

• PRODUCT LAUNCH - In February 2020, Johnson Controls introduced wrap-around heat exchangers (WAHX) to its YORK Solution Indoor and Outdoor air-handling systems. These integrated, factory-built, and installed exchangers cater to the rising demand for small-footprint, energy-efficient dehumidification techniques.
• PRODUCT LAUNCH - Havells India Ltd. unveiled the Grande Heavy-Duty Air Conditioner in February 2020. Equipped with catechin-coated dust filters, Green Bio air filters, and antibacterial Eva Coils, this AC model enhances indoor air quality.
• MERGER - In March 2020, Gardner Denver completed its merger with the Industrial division of Ingersoll Rand, forming the newly combined entity, Ingersoll Rand Inc. This merger expands the range of products offered by the company, significantly impacting the industrial technology and mission-critical flow management market.