HVAC Systems Market By Equipment Type, By Service Type, By Application, By End-User, By Region and By Country: By Size, Share, Industry Growth, Outlook and Forecast, 2025 – 2035

Report Summary

HVAC Systems Market Statistics

• As per Vertex, HVAC Systems Market will grow at a CAGR of 7% during 2025 to 2035.

• The value of the Global HVAC Systems Market is projected to reach USD 450 Billion by 2035.

• The size of Global HVAC Systems Market was worth USD 250 Billion in 2024.

The global market for HVAC systems is experiencing substantial growth, driven by the need for energy-efficient technologies, urbanization, increasing disposable incomes, and the evolution of smart HVAC technologies. Other drivers of market growth are infrastructure construction, increasing attention to indoor air quality in terms of health, and climate change that contributes to more intense weather patterns. One of the primary trends driving the industry is the universal use of smart HVAC systems with IoT integration, which provides improved automation, efficiency, and energy savings. Sustainability efforts and more stringent government regulations regarding energy efficiency and refrigerant consumption are also driving market forces. Additionally, economic indicators such as interest rates and levels of construction activity influence market growth, impacting new installations as well as retrofitting.

HVAC Systems Market Overview 

HVAC (Heating, Ventilation, and Air Conditioning) systems are integrated solutions designed to manage indoor temperature, humidity, and air quality. HVAC systems are essential in making residential, commercial, and industrial areas comfortable and safe. Global HVAC systems market includes the sales of varied equipment and services such as heating, cooling, ventilation, and air purification. The HVAC business operates in a dynamic ecosystem involving many stakeholders such as HVAC equipment companies, HVAC control companies, HVAC system integrators, HVAC distributors, HVAC service companies, and HVAC end-customers.

HVAC Systems Market Report Key Insights 

• Based on equipment type, heat pumps segment dominated the HVAC systems market, accounting for 40% share in 2024. The heating equipment category as a whole contributed to 50% of the total HVAC systems market share.
• Based on service type, installation services segment is projected to lead the global HVAC market during the forecast period.
• Based on application, new construction/installation segment is expected to dominate the global HVAC systems market during the forecast period till 2035.
• Based on end-user, commercial segment held the largest market share in revenue terms, closely followed by the residential segment in 2024.
• Based on Region, Asia Pacific accounted for almost 50% share of global HVAC Systems Market in 2024.

What are the Growth Drivers, Opportunities, and Challenges in HVAC Systems Market?

Rising Demand for Energy Efficiency and Sustainability Driving HVAC Systems Market

Governments worldwide are imposing tighter energy efficiency standards, compelling manufacturers to design environmentally friendly HVAC equipment. As there is greater sensitivity towards environmental issues and rising energy prices, businesses and homeowners are demanding for HVAC solutions that consume less energy and decrease long-term operating costs. This has fueled demand for energy-saving cooling and heating appliances, such as heat pumps and variable refrigerant flow (VRF) systems, that are presently leading the growth of HVAC market.

• LG launched its groundbreaking Dual Air Conditioner in March 2024 that elegantly combines contemporary design with cutting-edge functionality. Double outlet design enables the product to offer quick and precise temperature adjustment and indirect airflow for enhanced comfort and safeguard against direct drafts of cold air. Equipped with the power of LG's Dual Inverter Heat Pump Compressor, this air conditioner runs energy-saving throughout the year and has also been awarded an A+++ level of energy efficiency under EU regulations, further testing its sustainability and affordability.

Growing Construction Activities and Infrastructure Development Propel HVAC Systems Market

Increased urbanization and a construction boom are fueling demand for HVAC installations. The residential and industrial segments are experiencing unprecedented infrastructure growth, resulting in substantial new HVAC system deployments. Simultaneously, the market is witnessing strong push to retrofit old HVAC systems with state-of-the-art, energy-efficient equivalents. As compliance requirements and cost-cutting become top priorities, demand for replacements & upgrades to existing HVAC systems is expected to boost additional growth in HVAC systems market.

• For reference, In January 2024, LG launched the Multi F heat pump, offering all-year comfort with effortless integration into new and current HVAC systems.

Smart HVAC Systems and IoT Integration Provide Growth Opportunities in HVAC Systems Market

The convergence of the Internet of Things (IoT) and smart technologies is driving new business opportunities in the heating, ventilation, and air conditioning (HVAC) market. Smart HVAC systems nowadays involve AI-based automation, cloud-connected analytics, and real-time monitoring. This makes it easy to control and optimize energy use. Inclusion of sensors, smart thermostats, and smart devices adds ease to the customers through creation of remote accessibility along with predictive maintenance. These smart solutions not only boost the system efficiency but also help in reducing operational expenses, and hence are highly appealing among residential and commercial consumers.

Stringent Environmental Regulations & Economic Fluctuations May Restrain HVAC Systems Market

Strict environmental policies related to refrigerant discharge and energy efficiency are major compliance hurdles for manufacturers and service companies. Compliance with evolving regulatory mandates typically entails additional production expenses and capital outlay on new technology, which might be a fiscal burden for HVAC firms. Besides, economic volatilities and market uncertainties, including increasing interest rates and declining construction activities, can directly impact the demand for HVAC installations and upgrades.

What are the HVAC Systems Market Segmentations and Bifurcations?

HVAC Systems Market Segments by Equipment Type

• Heat Pumps
• Furnaces
• Unitary Heaters
• Boilers
• Air Filters & Purifiers
• Dehumidifiers
• Air Handling Units
• Ventilation Fans
• Unitary Air Conditioners
• VRF Systems
• Room Air Conditioners
• Chillers
• Cooling Towers
• Others

Heat pumps led the HVAC systems market in 2024 with a 40% market share. The overall heating equipment market (heat pumps, furnaces, unitary heaters, and boilers) held 50% share of the total HVAC market. Increased interest in energy efficiency and electrification has been a major driver for the adoption of heat pumps, especially in Europe and North America. Investments in cold-climate heat pump technology have expanded their applicability further, ensuring they remain a top selection in areas subject to harsh winters. The variable-speed compressors, smart-home compatibility, and eco-friendly refrigerants are driving market growth in this segment.

• Midea launched the MARS Series R290 commercial heat pump in March 2024, a highly efficient product which is the industry's first to be certified by Intertek's Ultra-High-Temperature Hot Water Performance Certification. It is an award that recognizes the system's high efficiency and reliability. The MARS Series uses environment-friendly R290 refrigerant, again proving Midea's care for the environment by reducing environmental load and delivering the optimal heating performance.

Unitary air conditioners segment maintains a strong market share in residential and commercial sectors. Global warming, urbanization, and growing disposable incomes are major drivers of demand. The market is moving towards energy-efficient products with increased SEER ratings, smart connectivity, and environmentally friendly refrigerants to meet changing regulatory requirements and sustainability programs.

VRF (Variable Refrigerant Flow) systems segment is also gaining momentum, particularly in commercial buildings that require effective climate control with flexible zoning capabilities. Increased adoption in regions where the climate remains mixed is further adding to the demand. The advancements in the segment are manifested through increased convergence with building management systems, enhanced efficiency, and lowered noise levels, which are establishing VRF systems as the sought-after technology for modern-day infrastructure projects.

HVAC Systems Market Segments by Service Type

• Installation Services
• Maintenance & Repair Services
• Upgrades & Replacement Services
• Consulting Services

On the basis of type of service, installation services will lead the market during the forecast period due to growing construction activity and the demand for HVAC system replacement in old facilities. Professional installation service is becoming increasingly popular due to more stringent energy efficiency codes that require building code compliance and optimal system performance. Furthermore, the integration of smart HVAC systems with IoT and automation is fueling the need for trained installation technicians.

HVAC Systems Market Segments by Application

• New Construction/Installation
• Retrofit/Replacement

On the basis of application, the new construction/installation segment is projected to lead the global HVAC systems market through 2035, driven by the expansion of residential and commercial construction. Growing investments in economic development, urbanization, and infrastructure are fueling the need for modern HVAC systems in new buildings. Also, growing emphasis on energy efficiency and smart technology is fueling the use of next-generation HVAC systems in new buildings.

HVAC Systems Market Segments by End-User

• Commercial
• Industrial
• Residential

The HVAC systems market is segmented by end-users into residential, industrial, and commercial categories. In 2024, commercial sector accounted for the largest revenue share, followed very closely by the residential segment.

The commercial end-user segment is expanding due to rising infrastructure construction, surging demand for central air conditioning, and widening issues related to sustainability. This has led to heightened demand for efficient climate control systems in offices, shopping malls, and business complexes. Companies are choosing VRF systems, chillers, and advanced building management systems (BMS) to enhance energy efficiency and reduce operational costs. One of the key trends driving the market is the growing adoption of AI-based climate control, zoning systems, and green building certifications, which are affecting investment.

The residential segment is experiencing steady growth, driven by urbanization, rising disposable incomes, and shifting consumer tastes towards smart home technology. With increased emphasis on energy-saving technology, consumers are opting for heat pumps, smart thermostats, and high-efficiency HVAC systems that save them money while making them more comfortable. The rising demand for home automation and intelligent climate control systems is a major trend shaping this segment, with a clear shift toward eco-friendly and cost-effective heating and cooling technologies.

HVAC Systems Market Report Scope & Snapshot

What are the Regional and Country Trends in HVAC Systems Market?

Global HVAC Systems Market - Regional Insights and Trends

• North America
• Europe
• Asia Pacific
• South America
• Middle East and Africa

In 2024, Asia Pacific accounted for around 50% market share of global HVAC Systems Market. The Asia Pacific region represents the fastest-growing HVAC market, fueled by rapid urbanization and industrial expansion. The demand for unitary air conditioners and VRF systems is rising due to increasing construction activities in residential and commercial sectors. APAC countries governments and organizations are increasingly emphasizing indoor air quality and energy efficiency, which is driving the development of advanced HVAC technologies in the region. Asia Pacific market trends reflect growing demand for mid-to-high-end HVAC systems, particularly in high-density urban areas.

• In 2024, China HVAC Systems Market size stood at USD 55 Billion.

• In 2024, Japan HVAC Systems Market size was worth USD 26 Billion.

• India HVAC Systems Market size was valued at USD 9 Billion in 2024.

North America HVAC market is a mature market and emphasizes a lot on energy efficiency and sustainability. The region experiences huge demand for heat pumps, furnaces, and unitary air conditioners, with regulatory measures encouraging high-efficiency HVAC equipment. Retrofitting of existing older systems with efficient models is one of the prime market drivers. Key trends in North America are the increasing use of smart HVAC systems and AI-based automation for improved climate control.

• In 2024, the U.S. HVAC Systems Market size was valued at USD 30 Billion.

Europe HVAC market is driven by stringent energy efficiency policies and push towards decarbonization. Increased usage of heat pumps and VRF systems is in line with the region's sustainability objectives. There is a growing need for air purification and smart ventilation solutions in commercial and residential buildings as well. Key trends across Europe include an increase in residential heat pump installations and an increasing preference towards environmentally friendly refrigerants to meet changing environmental regulations. Heat pumps demand across Europe has augmented, driven by government incentives and energy efficiency regulations.

Middle East & Africa HVAC systems market has been experiencing growing investment in the construction of residential, industrial, and commercial buildings. HVAC systems are employed in these buildings to control ambient temperature, humidity, and ventilation. The Saudi Arabia market is growing tremendously due to rising industrialization, urbanization, and population growth. Government programs for enhancing infrastructure development and diversifying the economy under Vision 2030 are also driving this market further.

• Saudi Arabia HVAC Systems Market value stood at USD 7 Billion in 2024.

How is the Competition Scenario in HVAC Systems Market?

HVAC Systems Market - Competition Landscape

The HVAC Systems market includes numerous regional players and global players. Some of the key companies operating in HVAC Systems market include -

• Carrier 
• Daikin
• Danfoss
• Emerson Electric
• Fujitsu
• Haier 
• Honeywell
• Johnson Controls
• Lennox
• LG Electronics
• Madison Air
• Midea
• Mitsubishi Electric 
• Nortek
• Panasonic 
• Rheem Manufacturing Company
• Samsung
• Trane Technologies
• Whirlpool
• Others

HVAC Systems Industry Developments

• In February 2025, Grundfos introduced MIXIT, an advanced HVAC solution designed to enhance energy efficiency significantly. As part of its expanding portfolio, Grundfos is launching next-generation cooling solutions, including IE5 single-stage pumps (up to 55 kW) and enhanced LSV efficiency. These technologies are developed to provide enormous energy savings and respond to the increasing need for energy-efficient cooling in data centers and district cooling applications.
• In February 2025, Bosch Group secured CCI approval for its $8 billion acquisition of Johnson Controls International’s (JCI) residential and light commercial HVAC business. This deal also gives Bosch complete ownership of the Johnson Controls-Hitachi Air Conditioning Holding (UK) Limited joint venture, including a 40% stake held by Hitachi. Filed under the Green Channel route, this strategic move reinforces Bosch’s expansion in the global HVAC systems market, strengthening its position in residential and commercial climate control solutions.