Time moves forward, so after 2024, we have reached 2025. In terms of climate awareness, our industry has come a long way in 2024, with even more to come from the beginning of 2025. For example, according to United States Environmental Protection Agency (US EPA), “Beginning January 1, 2025, certain technologies may no longer use high Global Warming Potential (GWP) HydroFluoroCarbons (HFCs) or HFC blends. Prohibitions apply to the manufacture, distribution, sale, installation, import, and export of products containing restricted HFCs and on the installation of new systems that use restricted HFCs.” Examples of a few mandates (not all) are listed in Table 1.
In an attempt to capping production of HFCs, the states in the European Union are to receive rights equivalent to 60% of their average annual production from 2011 to 2013. This rate will decline to 15% by 2036.
If we recall, on 8th December 2023 through a notification, Government of India mandated, “…the vehicles manufactured on or after the 1st October, 2025 shall be fitted with an airconditioning system for the cabin of vehicles of N2 and N3 category and the testing of the cabin fitted with airconditioning system shall be as per IS14618:2022, as amended from time to time: Provided also that any vehicle of N2 and N3 category, manufactured in the form of drive-away chassis, on or after the 1st October, 2025, the chassis manufacturer shall supply a type approved kit of air conditioning system as per IS 14618:2022 to facilitate the body builder in installing the kit.”
Contextually, Category N2 refers to motor vehicles used for carriage of goods and having a gross vehicle weight exceeding 3.5 tons but not exceeding 12 tons. Category N3 includes motor vehicles used for carriage of goods and having a gross vehicle weight exceeding 12 tons.
So, by the turn of this year 2025, several changes, better to say innovations, are expected in our HVAC industry.
Growth expected in the overall HVAC industry in 2025
According to a recent report by The Business Research Company – titled ‘HVAC System Global Market Report 2025’, the HVAC system market size has grown strongly in recent years. It will grow from $182.15 billion in 2024 to $193.18 billion in 2025 at a Compound Annual Growth Rate (CAGR) of 6.1%. The growth in the historic period can be attributed to urbanization and construction boom, global temperature variations, energy efficiency concerns, government regulations and standards, indoor air quality awareness, health and comfort factors.
The company’s research report further predicts that the HVAC system market size is expected to see strong growth in the next few years. It will grow to $254.07 billion in 2029 at a CAGR of 7.1%. The growth in the forecast period can be attributed to globalization of markets, focus on net-zero buildings, advancements in refrigerants, renewable energy integration, resilience to climate change, evolving building codes.
Major trends that it foresees in the forecast period include rise of smart HVAC systems, integration of Artificial Intelligence (AI), Variable Refrigerant Flow (VRF) systems, hybrid and integrated HVAC solutions, remote monitoring and control, electrification and heat pump adoption.
Which way the residential HVAC market to go
A recent report from the leading global technology research and advisory company Technavio estimates that the global residential HVAC market size to grow by USD 39.62 billion from 2025-2029 at a CAGR of 8.1%. Rise in demand for HVAC in construction industry is driving the market growth, with a trend towards power evaluation software used in HVAC systems.
The Residential HVAC market is experiencing significant growth due to increasing temperatures and consumer spending on heating equipment and air conditioners. Heat pumps are gaining popularity in cold regions with policy support for reducing greenhouse gas emissions. Smart equipment, including AI and automation, is becoming a trend with brands like Hisense, IntelliPro, CoolingXpert, and SLEEP mode leading the way.
The residential HVAC market is experiencing a significant shift with the introduction of power evaluation software programs. Previously, HVAC contractors and homeowners had to manually check power bills and consumption data to determine if a new HVAC unit was necessary. However, advancements in technology have streamlined this process. Power evaluation software now enables contractors to easily access and analyze energy records, saving both time and money for clients. This software calculates the lifetime power usage and related statistics for HVAC systems, allowing for accurate comparisons to other options. By tracking performance, it calculates potential savings, providing valuable insights for informed decision-making in the residential HVAC market.
Developments expected in the commercial HVAC market
The market for air conditioning equipment in the commercial sector is showing significant expansion trend due to factors such as increasing urbanization, infrastructure development, and the growing emphasis on comfort in business environments – notes Mordor Intelligence, a market research firm.
According to Mordor Intelligence’s recent report, “The Commercial HVAC Market size is estimated at USD 45.47 billion in 2025, and is expected to reach USD 69.32 billion by 2030, at a CAGR of 8.8% during the forecast period (2025-2030).”
Any commercial building, including offices, restaurants, hotels, hospitals, and schools, needs heating and cooling systems to give its occupants a comfortable space. These systems are widely used in offices to maintain the right temperature and ventilation, which enhances worker productivity and working conditions while preventing health problems brought on by incorrect humidity levels.
The increasing government initiatives and investments in the adoption of energy-efficient equipment will drive market growth. The increasing energy prices worldwide make energy-efficient HVAC systems attractive for cost savings.
HVAC maintenance service segment’s potential
According to the available records, the advent of commercial HVAC systems dates back to 1902, when ‘the father of modern air conditioning’ Willis Carrier developed the first modern electrical Air Conditioning unit.
As per Wikipedia, in 1887, Nikola Tesla developed an induction motor that could run on Alternating Current (AC), a power system format that was rapidly expanding in Europe and the United States because of its advantages in long-distance, high-voltage transmission. Further development of the device paved the way for developing oscillating fans.
Thus, the journey of creating comfort zone started and so far, it has passed through several milestones. Like any other field of technology, continuous modifications and upgrade have enriched the field.
Anyway, let us come back to the talk of HVAC maintenance services. What are the things included in its gamut? Custom Market Insights (CMI) a market research and advisory company, has precisely explained this in their latest report. They have stated that HVAC Maintenance Services include various types of services such as repair, upgrade, maintenance, and consulting.
Explaining the market trend, the report states, “The growing emphasis on energy-saving solutions and stringent government regulations are mainly driving the market growth of this segment.”
The report also states that various factors, such as growing adoption of HVAC systems in residential construction, rapidly expanding end user industries, growing disposable income, supportive government policies and incentives for HVAC systems, growing demand for improved indoor and outdoor air, increasing investment in construction activities, and advancements in HVAC systems, are mainly driving the market growth.
What kind of growth are they foreseeing? As per the report, the HVAC Maintenance Service Market was valued at approximately USD 77,670 Million in 2023 and was expected to reach USD 78,998 Million in 2024. Now, it is expected to reach a value of around USD 1,55,630.9 Million by 2033, at a CAGR of about 6.57%.”
Conclusion
Global warming and air pollution are two major factors that will drive the HVAC market in the coming days. Governments’ regulations in almost all parts of the world will effect major transformations in the industry.
Adoption of new technologies such as Internet of Things (IoT) and Artificial Intelligence (AI) will cause a big shift in the industry towards more energy efficiency and carbon footprint reduction.
Governments’ regulations and stricter measures will force manufacturers to use more environment-friendly refrigerants. There is a possibility of introduction of several new refrigerants that will be much more conducive to the nature.
However, the pace of all developments will depend on the economic ease around the world. There is a plethora of opportunities for the HVAC industry to grow, but as far as the global climate is concerned, it will still remain at stake. The reason has been nicely explained by the UN Foundation – as it communicates, “The road ahead remains riddled with complex obstacles that will test global cooperation: coping with the fallout of ongoing wars, navigating changes in leadership in the U.S. and elsewhere, bracing for the unpredictable impact of global warming, addressing systemic inequalities, and tackling the need for UN reform. But within these challenges lie opportunities for progress and a reset for multilateralism.”
By P. K. Chatterjee (PK)
