The HVAC industry sits at the intersection of climate change, urbanization, and the global push toward decarbonization — three forces that show no signs of slowing. The global HVAC market reached an estimated $310.6 billion in 2024 and is expected to grow at a CAGR of 5.8% through 2034 , driven by surging demand for energy-efficient cooling, stricter building codes, and the rapid expansion of smart building technologies. In the United States alone, HVAC companies generate $150 billion in annual revenue and employ over 1.5 million people . This is no longer a mature industry coasting on replacement cycles — it is a growth engine reshaped by electrification, artificial intelligence, and an unprecedented workforce crisis.
This article maps the HVAC landscape across nine critical dimensions: global and U.S. market size projections, regional breakdowns, workforce challenges, heat pump adoption trends, energy efficiency mandates, smart HVAC controls, residential and commercial segment dynamics, and the industry's role in the broader decarbonization agenda. Every statistic draws from major market research firms, government agencies, and industry associations to present the most current picture of an industry undergoing fundamental transformation.
Global HVAC market size and growth trajectory
The global HVAC market is expanding across every major research estimate, though figures vary depending on how broadly each firm defines the market's boundaries. Grand View Research places the global HVAC systems market at $258.96 billion in 2025, projecting it to reach $445.73 billion by 2033 at a CAGR of 7.0% . MarketsandMarkets estimates the market at $299.28 billion in 2025, growing to $407.77 billion by 2030 at a CAGR of 6.4% . Regardless of the specific valuation methodology, the direction is unmistakable: the HVAC industry will likely grow by 40–70% over the next decade.
Urbanization, rising construction activity, and climate volatility anchor this growth. The industry expands on the back of rising construction activities, urbanization, and an increasing need for thermal comfort in residential, commercial, and industrial buildings . Technavio projects HVAC market growth of $90.5 billion between 2025 and 2029, at a CAGR of 7% .
Global market valuations and projections:
$310.6 billion was the estimated global HVAC market size in 2024, projected to grow to $545.4 billion by 2034
Fortune Business Insights values the market at $165.88 billion in 2024, projecting it to reach $256.95 billion by 2032 at a 5.7% CAGR
InsightAce Analytics values the market at $233.12 billion in 2024, predicting $403.76 billion by 2034 at a 5.8% CAGR
Precedence Research calculates the market at $233.33 billion in 2025, anticipating $403.06 billion by 2034 at a 6.27% CAGR
The heating equipment segment dominated the market in 2025, accounting for 51.5% of market share
The commercial segment is expected to grow at a CAGR of 7.5% from 2026 to 2033, the fastest among application segments
U.S. HVAC market dominance and regional dynamics
The United States remains the world's largest single-country HVAC market, powered by a massive installed base, extreme climate diversity, and aggressive energy policy. The U.S. HVAC market is expected to reach $65.20 billion in 2025 and grow at a CAGR of 4.88% to reach $82.72 billion by 2030 . Heating and air-conditioning contractor industry revenue has grown at a CAGR of 2.6% over the past five years to reach an estimated $159.4 billion in 2026 , underscoring the scale of the services economy that wraps around equipment sales.
The replacement and retrofit cycle drives the majority of domestic activity. The replacement/retrofit segment dominated about 55% of the U.S. residential HVAC market in 2024 , reflecting the reality that America's aging housing stock requires continual system upgrades. Each year, over 3 million heating and air conditioning systems are replaced across the country, and $14 billion is spent on HVAC services and repairs .
U.S. market size and segment data:
The U.S. HVAC systems market was estimated at $29.89 billion in 2024, projected to reach $54.02 billion by 2033 at a 6.9% CAGR
The U.S. residential HVAC market exceeded $15.4 billion in 2024 and is expected to reach $31.4 billion by 2034 at a 7.5% CAGR
Heating equipment accounted for 69.2% of the U.S. HVAC systems market share in 2024
The residential segment held a 39.8% market share in the U.S. in 2024
HVAC installation and repair account for approximately 60% of total industry revenue
The average HVAC repair costs about $350 per service call, while a full unit replacement ranges from $8,000 to $15,000
HVAC maintenance costs an average of $200 per year depending on the scope of work performed
Workforce crisis: the technician shortage reshaping the industry
The HVAC industry faces a labor crisis that threatens to constrain growth for years. The industry confronts a shortage of 110,000 technicians , and around 25,000 leave the workforce annually through retirement, burnout, and career changes . The HVAC industry currently has over 480,000 unfilled skilled trade jobs , a staggering gap that drives up costs, delays projects, and forces companies to overwork existing crews.
An aging workforce amplifies the problem. 40% of HVAC technicians are over 45 years old , and younger workers are not entering the trades fast enough to replace retirees. Workforce research indicates a 50% decrease in certified HVAC technicians over the past decade . The pipeline from trade schools remains inadequate — only 35% of trade schools offer HVAC-specific programs .
Workforce and employment statistics:
Employment of HVAC mechanics and installers is projected to grow 8% from 2024 to 2034, much faster than the average for all occupations
About 40,100 openings for HVAC technicians are projected each year on average over the coming decade
The median annual wage for HVAC mechanics and installers was $59,810 in May 2024
The lowest 10% earned less than $39,130, while the highest 10% earned more than $91,020
Women make up only about 3% of the HVAC workforce
In the U.S., 423,000 people worked in the HVAC industry in 2024
Companies investing in robust training programs report a 24% higher profit margin and see technician retention rates increase by 30–50%
Florida (38,290), California (34,020), and Texas (32,070) employ the highest number of HVAC workers by state
Heat pump revolution: electrification accelerates
Heat pumps represent the single most disruptive technology shift in the HVAC industry. The U.S. heat pump market crossed $11.2 billion in 2024 and is growing at an 8.4% CAGR through 2034 . In 2024, manufacturers shipped 32% more heat pumps than gas furnaces — 4.1 million units versus 3.1 million units . This is not a niche trend; it is a structural transformation of how Americans heat and cool their homes.
The momentum continues into 2025. Heat pump sales outpaced gas furnaces by more than 26% from July 2024 to July 2025 . Over the past 20 years, annual heat pump sales have increased by 115% while gas furnace sales have decreased by 11% . Over the past decade, heat pumps have increased their monthly market share of residential cooling equipment from 34% to 50% .
Heat pump market data:
The global heat pump market was estimated at $86.5 billion in 2024 and is anticipated to reach $148.0 billion by 2030 at a 9.5% CAGR
The residential segment dominated the global heat pump market in 2024, accounting for 80.3% of revenue
Air-source technology held over 84.7% of the heat pump market in 2024
Heat pumps still meet only about 10% of the global heating need in buildings, well below the deployment level required for net-zero targets
The IEA estimates heat pumps have the potential to reduce global CO2 emissions by up to 500 million tons in 2030
McKinsey predicts the industrial heat pump market will grow at 15% annually through the end of the decade
The Inflation Reduction Act provides individual tax credits of up to $2,000 toward a new heat pump, with rebates of up to $8,000 for low- and middle-income households
Smart HVAC controls and building automation
The smart HVAC controls market is experiencing a technology-driven explosion. The global HVAC controls market was valued at $23.96 billion in 2024 and is projected to reach $39.07 billion by 2030 at an 8.6% CAGR . AI-driven optimization platforms, IoT-enabled sensors, and predictive maintenance tools are transforming how buildings manage climate, with measurable returns in energy savings and equipment longevity.
The integration of AI into HVAC operations delivers striking results. Honeywell and Cisco launched AI-driven platforms in September 2024 that enable up to 30% energy savings, improved air quality, and predictive maintenance capabilities . 45% of global HVAC system upgrades now incorporate smart controls , driven by IoT integration and stringent energy regulations. The commercial sector leads adoption — the commercial segment held 47% of the smart HVAC controls market share in 2024 .
Smart HVAC and building automation metrics:
The global smart HVAC systems market is anticipated to reach $178.29 billion by 2033, growing at a 7.0% CAGR
The global building automation and controls market was valued at $100.14 billion in 2024, projected to reach $232.28 billion by 2033 at a 9.8% CAGR
HVAC systems represent 40% of total building energy consumption
Over 50% of commercial buildings integrate AI-based HVAC systems, while residential smart thermostat adoption has grown by 45%
AI-driven predictive maintenance delivers a 40% reduction in maintenance costs and a 90% decrease in unexpected equipment failures
The smart thermostat market was worth $1.2 billion in 2022 and is projected to grow to $3.8 billion by 2029
Asia-Pacific leads global HVAC expansion
Asia-Pacific is the undisputed engine of global HVAC growth. The region dominated the HVAC industry with a market share of 49.58% in 2024 , driven by rapid urbanization, surging middle-class incomes, and large-scale infrastructure development across China, India, and Southeast Asia. The Asia-Pacific HVAC system market is estimated at $109.67 billion in 2025 and is expected to reach $191.45 billion by 2034 at a 6.38% CAGR .
India stands out as a breakaway growth story. The HVAC systems industry in India is expected to grow at a rapid CAGR of 8.3% from 2026 to 2033 , fueled by urbanization and the country's extreme climate. Cooling already accounts for more than 10% of global electricity use , and that share will rise dramatically as developing economies expand air conditioning access.
Regional market breakdown:
Asia-Pacific HVAC systems accounted for a 50.6% revenue share in 2024
The cooling equipment segment is expected to grow at a CAGR of 6.9% from 2026 to 2033, driven by rising ambient temperatures and urban populations in Asia-Pacific, the Middle East, and Latin America
Asia-Pacific smart HVAC controls are predicted to grow at a CAGR of 12.15% through 2032
China is responsible for nearly 33% of global heat consumption and is the world's largest market for building heat pumps
In 2022, China dominated global heat pump manufacturing capacity at 50 GW of production
Energy efficiency regulations and decarbonization mandates
Government policy is accelerating the HVAC industry's transformation at an unprecedented pace. In February 2025, the U.S. Department of Energy issued a final rule to update energy conservation standards for residential and commercial air conditioners and heat pumps , targeting reductions in energy consumption and greenhouse gas emissions. In December 2023, the U.S. joined 60 nations in pledging to increase the global average efficiency of new air conditioners by 50% .
The regulatory push extends to refrigerants and minimum efficiency standards. All residential and light commercial air conditioners and heat pumps manufactured after January 1, 2025 must use A2L refrigerants . In 2023, minimum HVAC SEER ratings increased from 14 to 15 SEER in the Southeast and Southwest, and from 13 to 14 SEER in the Northern United States .
Policy and efficiency data points:
The U.S. Department of Energy allocated $90 million for 25 projects nationwide to implement updated energy codes in buildings in 2024
Space heating and cooling accounts for more than half of home energy use
A group of 25 state governors committed in September 2023 to quadrupling the country's number of heat pumps by 2030
Retrofitting buildings is expected to create 1.3 million jobs, though the labor shortage presents a major challenge to the IEA's net-zero emissions goal for 2050
Almost 88% of U.S. households employ air conditioning
Two-thirds of U.S. households use central AC or a central heat pump as their primary cooling device
Trane Technologies' prototype cold-climate heat pump operated with backup electric heating only 10% of the time while delivering 15–20% energy bill savings
Residential versus commercial segment dynamics
The residential and commercial segments drive HVAC demand through fundamentally different mechanisms, yet both point toward the same conclusion: growth. The residential segment made up 48% of the global HVAC market in 2024 , powered by housing construction, home renovation spending, and the consumer shift toward smart, energy-efficient systems. Commercial HVAC services hold the second-largest share at over 30% of total HVAC sales , with industrial services capturing the remaining 20%.
Data centers represent a rapidly expanding commercial subsegment. In February 2025, Carrier Ventures invested in ZutaCore, a liquid cooling specialist for data centers, as AI computing demands explode . SPX Technologies reported a 32.5% increase in HVAC-related revenue in Q3 2024, driven by high demand for cooling products in data centers and pharmaceutical facilities .
Segment-specific statistics:
The replacement/retrofit segment made up 53% of the global HVAC market in 2024
The U.S. heat pump segment generated $7.4 billion in revenue in 2024
Industrial HVAC services account for 20% of total HVAC sales
The online distribution channel is expected to grow at a CAGR of 7.7% from 2026 to 2033
Retail stores dominated U.S. HVAC distribution in 2024, accounting for 48.1% of market share
The average HVAC technician generates between $200–$650 in revenue per service call during peak season, handling 10–12 calls per day
M&A activity and competitive landscape
Consolidation is reshaping the HVAC competitive landscape at a rapid clip. HVAC merger and acquisition activity increased by 41.7% in 2024 , as major manufacturers pursue scale, technology capabilities, and geographic reach. The industry's top players — Daikin, Carrier, Trane Technologies, Johnson Controls, Lennox, and Bosch — are spending billions to position themselves for the electrification and digitization wave.
The dealmaking reflects a clear strategic priority: securing capabilities in heat pumps, smart controls, and sustainable refrigerants. As of mid-2024, manufacturers had announced more than $4 billion in expanding production capacity for heat pumps and related efforts . The HVAC equipment sector saw 34 deals announced or completed in 2024, including 8 private equity acquisitions .
Key M&A and competitive data:
Bosch announced the acquisition of Johnson Controls' and Hitachi's residential ventilation businesses for $8 billion, its largest-ever deal
Daikin completed an $800 million acquisition of AHT Cooling Systems in 2023, expanding its heat pump and refrigeration capabilities
Carrier acquired Giwee Group, a Chinese heat pump manufacturer, for $400 million in 2023
Trane Technologies acquired BrainBox AI in April 2025 to embed autonomous optimization algorithms into its HVAC control stack
LG Electronics' acquisition of Webeloit is expected to generate annual synergies of approximately $100 million
Expanding heat pump production capacity to net-zero levels by 2030 would require additional global investments of $15 billion
HVAC is now a climate-critical growth industry
The data tells a consistent story across every dimension of this market. The global HVAC market is on track to surpass $545 billion by 2034 , powered by urbanization, electrification, and the global regulatory push toward decarbonization. Heat pumps have already overtaken gas furnaces in U.S. shipments — 4.1 million units versus 3.1 million — and that gap is widening. Smart HVAC controls, AI-driven optimization, and building automation are no longer futuristic concepts; they represent multi-billion-dollar markets growing at double-digit rates.
The workforce challenge remains the industry's most urgent constraint. With over 480,000 unfilled positions and 25,000 technicians leaving annually , the industry must invest aggressively in recruitment, training, and technology-assisted field operations to meet surging demand. Companies that solve the labor equation through apprenticeship pipelines, competitive compensation, and digital tools will capture disproportionate market share in the decade ahead.
The HVAC industry has evolved from a comfort utility into a frontline weapon in the fight against climate change, and the companies, policymakers, and workers who recognize that shift will define its next $300 billion chapter.