Hydronic HVAC Systems Market By Product Type, By Fuel Source, By Application, By End-User, By Region and By Country: Industry Size, Share, Trends, Growth Report and Forecast, 2025 – 2035

Report Summary

Hydronic HVAC Systems Market Size Statistics

• The value of the Global Hydronic HVAC Systems Market is projected to reach USD 80 Billion by 2035.
• The size of Global Hydronic HVAC Systems Market was worth USD 36 Billion in 2024.
• As per Vertex, Hydronic HVAC Systems Market will grow at a CAGR of 6% during 2025 to 2035.

The market for hydronic HVAC systems is fueled due to strict energy efficiency standards, the growing demand for sustainable heating and cooling systems, and rapid technology developments in hydronic HVAC. The primary drivers are the increasing popularity of the heat pumps, renewable energy integration, and accelerated construction activities. Furthermore, market demand is growing as a result of the need for retrofitting and replacement of existing HVAC systems. One of the key industry trends is the move towards electrification, with electric chillers and heat pumps gaining prominence. In addition, smart technology and IoT connectivity are transforming hydronic HVAC systems through real-time monitoring, optimization of energy, and predictive maintenance. Integration with renewable energy and smart control systems is expected to drive market growth of hydronic HVAC.

Hydronic HVAC Systems Market Overview 

Hydronic HVAC systems employ a fluid, generally water as a heat-transfer medium for heating and cooling. These water-based HVAC systems include boilers, heat pumps, chillers, and radiant heating technologies that provide an energy-efficient solution compared to conventional forced-air HVAC systems. Hydronic HVAC solutions maintain precise temperature control and consistent heat distribution by circulating hot or cold water through a network of pipes to radiators, underfloor heating systems, fan coil units, and other heat exchangers.

The hydronic HVAC value chain comprises raw material and component suppliers, HVAC equipment makers, controls suppliers, distributors, system integrators, and end-users. Major industry trends contributing to market growth are electrification, specifically the increasing use of heat pumps and electric chillers, and innovations in smart HVAC technologies. Industrial and commercial end-user markets contribute for high market demand, and data centers represent a high-growth segment as energy-efficient cooling solutions are in high demand. The Asia-Pacific market is projected to have the highest growth during the forecast period, led by urbanization, infrastructure construction, and government policies for energy efficiency.

Hydronic HVAC Systems Market – Key Insights

• Based on product type, Hydronic Heating Systems segment dominated the Hydronic HVAC systems market, accounting for 56% share in 2024. 

• Based on fuel source, Electricity segment is projected to lead the global Hydronic HVAC systems market during the forecast period. 

• Based on application, New Construction segment is expected to dominate the global Hydronic 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 Industrial segment in 2024. 

• Based on Region, Asia Pacific region is projected to lead the global Hydronic HVAC systems market during the forecast period with high growth rate.

What are the Hydronic HVAC Systems Market Segmentations and Bifurcations?

Hydronic HVAC Systems Market Segments based on Product Type

• Hydronic Heating Systems

  • Hydronic Boilers

  • Heat Pumps

  • Radiant Heating Systems

  • Hydronic Convector Heaters

• Hydronic Cooling Systems

  • Chillers

  • Air Conditioning Units

  • Fancoils

  • Air Handling Units (AHU)

  • Cooling Towers

Based on product type, the hydronic heating systems segment dominated the market in 2024 with 56% revenue share. Of these, heat pumps are growing at the fastest rate, spurred by their adaptability, government incentives, and increasing energy efficiency awareness. Radiant heating systems are also becoming increasingly popular in residential and commercial end-user markets, providing improved comfort and energy efficiency. Hydronic boilers still maintain a significant market share as they can provide steady heating for residential and commercial areas, although their growth rate is modest.

Under the hydronic cooling systems segment, chillers are expected to attain the highest CAGR over the forecast period. Their widespread adoption in large commercial and industrial applications is driving demand in this segment.

Hydronic HVAC Systems Market Segments based on Fuel Source

• Natural Gas
• Electricity
• Biomass
• Solar
• Oil

In 2024, natural gas segment accounted for about 45% of total revenue and was the leading fuel source in the hydronic HVAC systems market. Natural gas is still the favored fuel source because it is cost-effective, efficient, and capable of providing consistent, high-output heating & cooling. Natural gas is commonly utilized in residential and commercial use, especially in cold climates, where rapid response times and reduced emissions over other fossil fuels make it a good choice.

The electricity segment is expected to contribute the largest market growth over the forecast period. Hydronic HVAC systems powered by electricity offer a clean, efficient, and environmentally friendly option over fossil fuel-based solutions for heat, especially in areas with access to renewable energy for electricity. Hydronic HVAC systems are also finding favor due to reduced installation complexity, lesser maintenance needs, and growing use of heat pumps and electric chillers.

Hydronic HVAC Systems Market Segments based on Application

• New Construction/Installation
• Retrofit/Replacement

The new construction segment is expected to lead the hydronic HVAC systems market during the forecast period. The increasing focus on energy efficiency and sustainability across the construction sector is fueling demand for water-based HVAC solutions. High-technology advancements in heat pumps, chillers, and radiant heating/cooling systems have made systems more flexible, reliable, and easier to install, thus becoming the preferred choice for modern buildings. Developers and designers are now more commonly including high-performance hydronic HVAC solutions to create custom, energy-efficient spaces to fulfill project-specific requirements. Market growth is further fueled by incentives and policy requirements that are supporting the transition to green building solutions.

Hydronic HVAC Systems Market Segments based on End-User

• Residential
• Commercial
  • Healthcare Facilities
  • Retail 
  • Restaurants & Hotels
  • Workspaces & Offices
  • Educational Institutions
  • Government Facilities
  • Other Commercial Applications
• Industrial
  • Data Centers
  • Manufacturing Plants
  • Power & Utility Facilities

The commercial segment dominated the hydronic HVAC systems market in 2024, contributing about 40% of the revenue. This is attributed to broad adoption in office buildings, hotels, retail outlets, and medical facilities, where organizations value energy efficiency, balanced climate control, and lower operational expenses. The industrial segment is experiencing strong growth, especially in data centers, where the need for high-performance cooling is on the rise with increased rack densities and higher thermal loads.

Hydronic HVAC Systems Market Drivers & Trends

• Rising Need for Energy Efficient Hydronic Heating & Cooling Systems

• Rising Construction Activities in Residential and Industrial Sectors

• Rising Demand for Data Centers Liquid Cooling Solutions

• Convergence of Hydronic HVAC Systems with Renewable Energy Sources

• Government Regulatory Policies and Incentives Drive Hydronic HVAC Adoption

• Large Growth Potential in Retrofit and Replacement Segment

• Convergence of IoT and Smart Controls in Hydronic HVAC Systems

• Growing Use of Underfloor and Ceiling Radiant Heating Systems Drives Market Penetration

• Electrification of Water-Based Heating and Cooling Systems

• Growth of Modular and Prefabricated Hydronic HVAC Systems

Hydronic HVAC Systems Market Report Scope & Snapshot

What are Regional & Country Trends in Global Hydronic HVAC Systems Market?

Hydronic HVAC Systems Market - Regional Insights

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

The Asia Pacific region led the global hydronic HVAC systems market revenue in 2024, with more than 50% of the market share. The growth in the region is mainly contributed by booming urbanization, industrialization, and the need for energy-efficient heating and cooling solutions. The growth in the construction activities and heightened sensitivity towards sustainability in the region are driving the installation of hydronic HVAC systems in upscale residential, commercial, and industrial settings. Key markets of this region are China, Japan, South Korea, India, and ASEAN countries.

Europe is experiencing market growth due to stringent energy legislation and high priority for sustainable construction methods and green building solutions. The initiative for curbing carbon emissions and enhancing the energy efficiency of new and existing buildings has speeded up the implementation of hydronic HVAC systems in residential, commercial, and industrial segments.

North America hydronic HVAC market is witnessing steady growth, primarily due to sustainability efforts and the growing uptake of smart HVAC technologies. Both new building developments and retrofitting activities are driving market demand. The growing demand for heat pumps and smart hydronic systems, along with aggressive energy efficiency regulations and government incentives, is influencing the market. The U.S. is the largest market in North America region.

How is the Competition Dynamics in Hydronic HVAC Systems Market?

The global hydronic HVAC systems market is highly competitive with an assortment of global and regional competitors. The significant competitive parameters include product innovation, energy efficiency, reliability, price, and customer service. The market is observing improved cooperation between HVAC industry companies and energy solution companies, and enhanced investments in hydronic HVAC systems integrated with renewable energy. In addition, the implementation of smart technology is transforming the competitive landscape, improving system performance, and maximizing energy management.

Some of the key companies operating in Hydronic HVAC Systems Market include (but not limited to):

• Ariston
• AO Smith
• Betherma 
• Bosch 
• Carrier
• Daikin
• Danfoss
• Fujitsu
• Grundfos
• JAGA 
• Johnson Controls
• KSB SE & Co
• Lennox
• Mitsubishi Electric
• Purmo 
• Trane
• Vasco Group
• Viessmann 
• Others

Hydronic HVAC Systems Industry Developments

• In March 2024, U.S. Boiler launched a hydronic heat pump suitable for residential installations. The company pointed out that the new unit is suitable for both new build and retrofit installations, and can be used as a sole source of heat or in dual-fuel configurations. It comes in a 5-ton capacity with a rating of 60,000 BTUs per hour.

• In April 2023, Daikin released a new water-sourced heat pump. This new heat pump is more energy efficient and environmentally friendly compared to the conventional heat pumps.

In March 2023, Panasonic announced it was accelerating its growth strategy for the HVAC firm in the European market, concentrating on the hydronic systems and air-to-water heat pump sectors. In addition, the firm invested a further 15 billion yen into its Czech Plant to increase production of A2W heat pumps.