During the year 2023, every industry has faced a huge downfall due to the coronavirus pandemic. Different industries and markets had to go beyond their traditional offerings in an effort to fulfill the sudden shift in need of their target audience. And the HVAC industry was no different than others!
The HVAC industry sector has gone through an intense period of transformation, propelled by new market demands and new technological possibilities. The HVAC systems are getting smarter due to new innovations, HVAC software, and advanced tools. And the increasing preference for considering boilers is one of the major drivers for the growth of the HVAC industry.
“The global HVAC market is predicted to grow at a CAGR of 4% during 2022-2027 and will hit the market value of USD 301 billion by 2026.”
If you are running a heating or cooling business or performing home energy audits, you must be struggling with the thought of being competitive in this ever-changing and growing industry. And to help you out, we’ve come up with some of the most interesting trends that are reshaping the HVAC industry.
Emerging HVAC Trends and Statistical Insights in 2024
The HVAC industry trends have been steering the sector towards remarkable growth and development. In 2022, the global HVAC market surged to nearly USD 159 billion. Projections paint an optimistic picture, envisioning the market reaching an impressive $227 billion by 2028, highlighting a robust global expansion.
In the United States, the HVAC industry serves as a pivotal economic force, boasting an annual revenue of $150 billion and providing employment to over 1.5 million individuals nationwide. Sustaining this upward momentum, the industry is poised for a consistent Compound Annual Growth Rate (CAGR) of 6.1% from 2021 to 2026, showcasing a promising trajectory.
The replacement of over 3 million heating and air conditioning systems annually in the U.S. underscores the industry’s vitality, with a hefty $14 billion investment directed towards HVAC services and repairs, emphasizing the sector’s significance.
Adapting to evolving standards, the minimum HVAC SEER grading in the U.S. witnessed incremental changes. In 2023, the Southeast and Southwest regions elevated their minimum SEER from 14 to 15, while the Northern United States increased requirements from 13 to 14 SEER for new AC units.
Technological advancements have spurred notable trends in the HVAC industry, particularly focusing on Indoor Air Quality (IAQ) and smart thermostats. The smart thermostat market, valued at $1.2 billion in 2022, is projected to soar to $3.8 billion by 2029. Similarly, the U.S. indoor air quality market, standing at $9.8 billion in 2022, anticipates significant growth, aiming to reach $11.9 billion by 2027. These trends underscore the industry’s dedication to innovation and efficiency in meeting consumer demands.
Exploring the Current Landscape of the HVAC Industry
Understanding the pulse of the HVAC industry is crucial before delving deeper into its dynamics. These insights illuminate the present state and potentially map out the industry’s trajectory in the near future.
The global HVAC market is on a remarkable ascent, poised to achieve unprecedented heights by 2030. According to Statista’s 2019 projections, this industry is set to soar to $367.5 billion by the end of the decade, showcasing a steady compound annual growth rate (CAGR) of 3.9% from 2020 to 2030. However, this growth narrative isn’t solely confined to numbers.
Today’s HVAC units are more environmentally conscious than ever, meeting the growing demand for energy-efficient solutions in heating and cooling systems. Anticipating this shift, market experts estimate a staggering figure: by 2024, the global sales of HVAC units are expected to surpass 151 million units.
The HVAC sector, already a substantial player in the market, is destined for further expansion. The trajectory indicates a promising future, signaling substantial profitability in the years to come. If you’re part of this industry, growth prospects are ripe for exploration. Yet, capitalizing on this potential necessitates proactive preparation and a keen understanding of emerging trends.
Being well-versed in forthcoming trends is pivotal for leveraging the expanding landscape of the HVAC industry. Stay informed to seize the opportunities that lie ahead and navigate this evolving sector successfully.
HVAC Industry Insights and Trends in 2024
Understanding the Dynamics and Future of HVAC
Costs and Services:
- In 2024, HVAC repairs will average around $350 per service, while unit replacements range between $8,000 to $15,000, contingent upon the AC unit’s SEER rating.
- Common repairs involve capacitors, compressors, fan motors, or condenser coils. Heat pump repairs remain a prevalent service in heating repair.
- Annual HVAC maintenance typically costs about $200, varying based on the required work. Maintenance agreements usually cover two yearly visits, ensuring efficient AC unit operation and reducing repair needs.
Market Segments and Companies:
- Cooling and air conditioning lead the HVAC market, contributing 57.8% to total industry revenue in 2022.
- The U.S. HVAC landscape encompasses new construction, retrofits, and serves residential, commercial, government, and industrial sectors.
- Residential services dominate HVAC sales, capturing over 50% of the market, followed by commercial services at 30% and industrial services at 20%.
- Leading HVAC equipment manufacturers include Goodman Manufacturing (owned by Daikin Industries), Trane, York, Carrier, Rheem, Johnson Controls, and Lennox.
Employment and Growth:
- The U.S. boasts approximately 145,142 HVAC companies, employing 659,906 professionals in 2023, with a 2.8% employment growth between 2018 and 2023.
- California, New York, and Texas hold the highest HVAC employment rates.
- The industry is poised for a 5% growth over the next five years.
Business Performance and Salaries:
- In 2022, 88% of HVAC business owners reported excellent business performance, expecting a 5-10% growth in 2023.
- HVAC business profit margins range between 2.5% and 25%, with an average owner salary of $57,767 yearly.
- Only a small fraction (less than 2%) of HVAC business owners earn over $100,000 annually, while technicians earn an average of $49,500 per year.
- Digital marketing for small HVAC businesses costs between $2,500 to $12,000 monthly.
- Most HVAC businesses invest 7-10% of revenue in marketing, utilizing Google ads as a primary tool (with a 33% click-through rate).
- The average cost per lead in HVAC marketing is $62, with Google ads averaging $6.62 per click.
- Social media platforms like Facebook, Instagram, and LinkedIn are pivotal for HVAC marketing, with leads costing between $72 to $166.
Looking Ahead: The evolving landscape of the HVAC industry underscores the importance of these upcoming trends, shaping its trajectory:
Smart HVAC automation technologies will be in huge demand.
Technology is pivotal in reshaping the HVAC industry because it is a lot easier to access and aid smartness. It will be possible for the HVAC businesses to implement HVAC systems that collect data and add intelligence to manage systems without any human intervention.
It is even possible to design HVAC cooling load calculation software to track and automate the entire home energy audits and consider all the necessary aspects to provide accurate results without any manual calculations.
Some of the current home automation applications include preventive maintenance and identifying the specific conditions under which heat and cold are more necessary based on the position of the sun. Since HVAC systems are getting smarter, the future trend will be to utilize automation technologies to improve the systems’ energy-saving capabilities and bring a more comfortable user experience.
HVAC systems are going to be “Ductless”
Yes, this is something that’s going to be an interesting trend to watch out for. Most of the HVAC service providers face challenges updating older buildings with air conditioning due to a lack of space to install ductwork. And it increases the overall expense to have an HVAC system installed. The only possible way to overcome the challenge is to go ductless in the future.
It will be possible for the users to install such compact units anywhere without worrying about additional space to install ducts. It is one of the most preferred solutions for modern infrastructures struggling with gaps and holes in ducts because of which air leaks. Rather than paying for expensive replacements, adopting a ductless HVAC system will be an ideal solution in the future.
Streamlining Operations with Digital Transformation
Industries, including HVAC, are witnessing a significant transformation, notably the transition towards a paperless ecosystem. Historically, paperwork has been integral to the service sector, managing work orders, technician reports, billing, and invoices, but it’s been cumbersome, time-consuming, and prone to errors. The pandemic’s restrictions further highlighted these inefficiencies, driving businesses to seek streamlined processes.
Enter the era of paperless operations – a shift propelled by automation and advanced technology. For HVAC companies, specialized HVAC business software has been a game-changer. This field service management software integrates cutting-edge tools like cloud storage, automated scheduling, GPS tracking, accounting, and more into a unified platform accessible via computers or smartphones. Beyond just eliminating paper trails, this technology enhances efficiency, scalability, and transparency.
Evolving Towards Sustainable Building Design
In tandem with this digital evolution, the construction industry is embracing green building designs for new structures, emphasizing energy efficiency. HVAC plays a pivotal role here as these designs focus on optimizing AC units to reduce energy consumption and enhance overall efficiency.
Exploring Innovative HVAC Systems
Innovations like DeVAP HVAC systems showcase promising advancements in air conditioning. These systems utilize evaporative cooling, employing a combination of desiccants and evaporative coolers to effectively cool a space. The primary benefit? Significant cost savings.
Additionally, solar and geothermal HVAC systems are gaining traction. Solar systems harness the sun’s energy to heat fluids that, in turn, warm the air, offering reduced energy bills and minimal environmental impact. Geothermal systems leverage below-ground pipes to regulate building temperatures efficiently, though their installation complexity and cost make them a more substantial investment.
Future-Proofing HVAC Businesses
Understanding these trends equips HVAC business owners to make informed decisions and remain competitive in a market poised for continuous growth. With the global population expected to surge in the coming decades and aging HVAC systems requiring upgrades, the demand for HVAC engineers and thermal engineering experts will persist or even rise.
Anticipating Future Trends
Looking ahead, the industry will emphasize energy efficiency, digitalization, and sustainability. Manufacturers are developing products with advanced technology to reduce energy consumption, contributing to decreased electricity demands. Smart HVAC technologies will gain popularity among homeowners, further reducing energy usage and carbon footprints.
Staying ahead in this dynamic landscape requires the right tools and technology choices. As we advance into the next phase, leveraging these advancements will be the key competitive advantage in the HVAC industry.