The global HVAC maintenance and services market was valued at USD 78.50 billion in 2023 and is expected to reach USD 110.07 billion by 2029, growing at a CAGR of 5.79% during the forecast period. The surge in residential and commercial construction activities is anticipated to contribute exponentially to the market growth. Further, increased heat pump consumption is driving the global HVAC maintenance and services market. Most commercial construction buildings installed space cooling, heating, residential appliances, lighting, and other requirements. Hence, the growing energy consumption across the globe is expected to increase the energy efficiency of HVAC systems in the future.
The Heating, Ventilation, and Air Conditioning (HVAC) services include installation, replacement, maintenance, and repair services. HVAC systems are meant to provide comfortable air conditions and thermal balance in residential or commercial setups. HVAC systems generally deliver reasonable air quality and control heat and moisture. The HVAC systems commonly include various mechanical/electrical equipment, which ensure thermal comfort to occupants in the room/building. These systems are used across various end-users, such as industrial, commercial (including institutional structures), residential, and institutional. To keep equipment running properly and effectively, HVAC maintenance, such as changing filter belts, greasing bearings, and adjustments to equipment due to wear and tear, is done periodically, thereby supporting the growth of the HVAC maintenance and services market.
Global warming is caused by various heating mechanisms that emit pollutants in the air, eventually increasing carbon dioxide in the atmosphere. Decarbonizing initiatives such as implementing low-emission heat and cold supply systems by substituting fossil fuels with renewable and waste heat and cold energy sources are mandatory to meet climate change mitigation targets. The availability of the latest technologies has made it possible to achieve 100% decarbonization, as heat pumps are the most popular solutions in the market. Furthermore, the product's success also depends on the macro-environmental features such as social, legislative, and environmental aspects. North America, EU, and APAC countries are expected to drive the demand for heating systems due to the surge in new construction and buildings.
As regulations regarding energy consumption continue to evolve, vendors may find it challenging to ensure a sustainable presence in the HVAC maintenance and services market. Because of a highly competitive market, R&D investments in the pool heat pump market are limited, with the most substantial investments coming from large vendors. Moreover, the short time-to-market and focus on acceptance of new technologies have added to the challenges of HVAC vendors. R&D investments are more narrowed on cost reduction of the production method and improvement of the existing technologies for value addition than the development of new products.
HVAC employees play a crucial role in installing, repairing, and maintaining heating and cooling systems for businesses, homes, and industrial facilities. The demand for skilled heating and cooling systems employees is on the rise, and career chances in this field are expected to grow in the HVAC maintenance and services market in the coming years.
- Three of the most populated states (Texas, Florida, and New York) had more than 6,900 plumbing and HVAC contractor companies in 2022. California was leading with around 10,716.
- The U.S. Bureau of Labor Statistics projects the employment of HVAC mechanics and installers will increase by 15% by 2026, much faster than average for all other occupations.
- Consumers in developed countries like the U.S. spend around USD 10 billion yearly on HVAC maintenance services. In 2023, the average salary for an HVAC mechanic and installer was USD 70,050.
- The median yearly wage for employees who work in HVAC and refrigeration occupations is USD 45,760 as of May 2022. This includes mechanics and installers who work in educational services, retail trade, wholesale trade, and contracting.
MARKET TRENDS & DRIVERS
Rise in Disposable Income
The high disposable income of most of the population worldwide is attributable to the high literacy and employment rates. Thus, such factors contribute to an increasing consumer inclination toward premium and smart products available in the market. Despite premium pricing, the demand for the construction of swimming pools in the residential and commercial sectors is on the rise in developed countries such as the US. The surge in demand for construction would propel the demand for HVAC maintenance services. The considerably high demand for pool heat pumps worldwide can be attributed to the substantial disposable incomes of working individuals.
Favorable Government Policies and Incentives
The favorable government policies across the countries that support using renewable energy sources and prevent the emission of greenhouse gases into the atmosphere are eventually driving the HVAC maintenance and services market. For instance, the Chinese government also strives to promote the use of heat pumps across the country and provides subsidies for installation that can cover up to 90% of the total unit cost, especially where heating with coal fire is popular. The country has also been trying to take a sustainable approach, making it more significant to reduce the emission of hazardous gases into the environment. The China Heat Pump Alliance (CHPA) is the standard body for the HVAC market in the country.
High Installation and Upfront Costs
Despite the benefits associated with HVAC in terms of sustainable contribution to the environment, the high initial and upfront costs are hindering their adoption. Such factors can be a major challenge to the HVAC maintenance and services market, especially in the growing economies and price-sensitive markets of APAC and Latin America, where cost is a major influencing factor for purchase. According to estimates, the average installation costs for an HVAC with pool plumbing might range between USD 3,600 and USD 6,500, whereas the labor costs might range between USD 500 and USD 1,000. These prices are often quite high for middle-income consumers who form the major target segment. Although there is evidence of HVAC generating low operational costs over time when compared to conventional gas and solar heaters, the high installation cost is a burden for vendors in the market.
INSIGHTS BY EQUIPMENT
The HVAC maintenance and services market by equipment is segmented into heating, air conditioning, and ventilation. The heating segment dominated the global market share in 2023. The heating equipment market is characterized by the presence of many vendors in producing both traditional and modern heating equipment. The market has several tools, each with a specific functional and distinct technology. Some of them include heating pumps, furnaces, boiler units, and other heating equipment. Heating pumps have been one of the most critical HVAC systems. They are mainly used in cold regions as their primary function is heating. The demand for heat pumps mostly results from efficiency since their output is four times the amount of energy they consume. Heat pumps are a steady revenue generator for the industry and have witnessed high growth and constant innovation. The key factors favoring the heat pump demand include high energy efficiency, low cost & payback period, and high reliability.
INSIGHTS BY SERVICE MODEL
The maintenance & repair service model segment holds the most prominent share of the HVAC maintenance and services market in 2023. In order to keep equipment running properly and efficiently, HVAC maintenance, such as changing belts and filters, greasing bearings, and making adjustments to equipment due to wear and tear, is done periodically. One convincing rationale for timely HVAC preventive maintenance is the potential for substantial savings on user utility bills. When an HVAC unit operates at peak efficiency, it doesn’t overexert itself, which helps to reduce energy consumption. Moreover, the U.S. Department of Energy suggests that this efficiency boost can translate into significant savings, potentially slashing end-user energy costs by as much as 30%. Embracing HVAC preventative maintenance is not only for efficiency but also helps foster healthier indoor air quality. The U.S. Environmental Protection Agency (EPA) mentioned indoor air can be two to five times more polluted than outdoor air. Proper HVAC maintenance can help remove pollutants and allergens, significantly improving indoor air quality. Such factors are projected to support the segmental growth during the forecast period.
INSIGHTS BY END USERS
The global HVAC maintenance and services market by end-users is segmented into residential, commercial, and others. The residential end-user segment has emerged as the largest HVAC maintenance and services market. The rise in disposable income, growing urbanization, willingness for a sophisticated lifestyle, and expansion of distribution networks to cater to domestic aftersales services have led to the dominance of the segment. With immense scope for commercial applications, the segment is booming in established markets of APAC, Europe, and the United States. Further, developing affordable and flexible HVAC that matches the complex and dynamic infrastructure and helps lower utility bills contributes to the segment's growth. Institutions such as schools, colleges, sports complexes, and water parks also use renewable technologies to signify or differentiate themselves from society by showcasing their environmental commitment by reducing their carbon footprint. Restaurants, hotels, spas, and recreation centers are the major end-users in the segment, which poses a strong growth prospect for the next five years. It is further accelerated by the growth in tourism, leisure activities, demographic factors, lifestyle modifications, and supportive incentives from the government to promote business activities.
APAC holds the most significant share of the global HVAC maintenance and services market in 2023. The increasing demand for energy-efficient HVAC systems and severe regulations for using explosion-proof HVAC equipment is growing in the APAC region. Also, the adoption of cleanrooms across industries will offer enormous growth opportunities. Moreover, the frequency of natural disasters in the Asia Pacific region is expected to remain high. With population relocation to coastal cities, a specific disordered urbanization process is the primary factor leading to the vulnerable climate change risk in APAC countries. Therefore, the fluctuating climatic conditions propel the demand for the dynamic nature of HVAC maintenance & service in APAC countries in the forecast period.
Global players in the HVAC maintenance and services market, like Systemair Manufacturing, Johnson Controls, Zehnder, and Ostberg, are trying to expand their markets through profitable partnerships and merger strategies. In contrast, the domestic vendors in the HVAC maintenance and services industry are capitalizing on the product portfolio that best suits domestic needs and wants. However, being a technology-oriented product, the scope of differentiation lies with sophistication and deployment of advanced features like energy efficiency, COP, eco-friendly refrigerant, installation costs, geographical climate, services analysis, and much more, through which the product can stay away from the competitive environment. With the recent advancements in engineering and technological features, the changing dynamics of the HVAC industry demand highly effective heating equipment for universal applications.
Key Vendor's Growth Strategy in the Global HVAC Maintenance And Services Market
- The HVAC maintenance and services market is characterized by the presence of many market participants in each country and equipment category. The HVAC industry benefits from large government incentives to end-users, with government objectives meeting carbon emission targets and other climate change control measures. Government schemes stimulated the demand for energy-efficient equipment.
- With technological upheaval, the industry has seen an influx of affordable systems. Vendors that have advanced technology and meet standards set from an ecological perspective have a competitive edge over other vendors. Hence, although sustainability is a major factor in the HVAC industry, incorporating technology and statutory standards is a step ahead in the competitive market.