Climate change, urbanization, and energy efficiency demands are driving sales in the HVAC industry. Last year’s (2024) $263.56 billion revenue on a global scale shows how people are getting more dependent on HVAC systems and solutions for their comfort. By 2029, it is projected to be $304.96 billion.
However, Asia, being the second largest contributor to it, has only $21.52 per capita revenue. This is a significant difference from the leading contributor, the United States’ $120.84. Large numbers from different regions can be skewed by population groups. This is often troubling for stakeholders. So, this post discusses the total revenue and per capita revenue trends that are affecting the rise of global HVAC spending.
Key Takeaways
|
Global HVAC Market Overview
| Year | Revenue |
| 2019 | $203.54 billion |
| 2020 | $220.04 billion |
| 2021 | $243.68 billion |
| 2022 | $235.12 billion |
| 2023 | $255.10 billion |
| 2024 | $263.56 billion |
| 2025 (estimated) | $271.90 billion |
| 2026 (forecasted) | $280.11 billion |
| 2027 (forecasted) | $288.39 billion |
| 2028 (forecasted) | $296.68 billion |
| 2029 (forecasted) | $304.96 billion |
On a global scale, the HVAC industry experienced a $203.54 billion revenue in 2019. It is expected to reach $271.90 billion by the end of 2025 and $304.96 billion by 2029.
It is a CAGR (Cumulative Annual Growth Rate) of 2.96%!
The United States has the largest growth potential, from $85.12 billion in 2019 to $143.08 billion in 2029.
With the global revenue, the average revenue is also expected to rise. The US also leads that list at $146.95 per capita by 2029.
Last year, in 2024, the global HVAC revenue was $263.56 billion. Segmented by regions,
- The United States leads globally, generating $126.26 billion.
- Asia also had a substantial revenue of $95.00 billion in 2024 with an anticipated growth rate of 3.96%.
- Europe’s total revenue is estimated at $26.77 billion, and it is expected to grow at 3.44%. The air conditioning market alone contributed $9.46 billion in revenue.
- Africa’s reported revenue was $3.51 billion, of which $1.23 billion was from air conditioners.
- Australia and Oceania reported a revenue of $1.42 billion with a CAGR of 1.82%.
Key Drivers of Revenue Growth
The overall global HVAC revenue trend is upward. There are multiple factors behind it:
- Climate Change and Extreme Weather Conditions: The overall global temperature is rising each year. In 2024, it was 0.97°C warmer than 20th 20th-century average. People are also careful about sudden extreme temperature shifts in summer and winter.
- Urbanization and Construction Boom: The rising population demands more buildings and consequently, more HVAC dependency. China and India’s huge populations contribute to Asia’s large HVAC revenue numbers. As of 2020, 56.2% of the global population lived in urban areas. It is expected to gradually rise to 70% by 2050.
- Government Regulations and Energy Efficiency Standards: The US Department of Energy sets minimum efficiency standards and ENERGY STAR programs for efficient products, leading more people to upgrade. The regulations continue to shift towards newer standards.
- Newer and Advanced Technologies: Newer technologies like smart thermostats, AC, and heaters have a CAGR of 10.24%. With updated features, people are spending more on the upgrades.
Per Capita HVAC Spending Trends (2019-2029)
Per capita spending is the average amount of money spent by each person within a sample in a period of time (usually a year). It is calculated by total revenue/population.
The per capita spending varies across regions within a country, and of course, the world:
- In the US, the per capita spending on HVAC systems was $94.74 in 2019. It is expected to rise to $146.95 in 2029. (leading per capita spending globally)
- Europe is forecast to see an increase from $26.52 in 2019 to $37.64 in 2029.
- Australia & Oceania’s per capita spending is expected a rise from $45.91 to $60.94 in the same period.
- Asia had per capita spending of $18.88 in 2019. It is projected to be $23.90 in 2029.
- Africa has the lowest per capita spending. It was $2.33 in 2019 and projected to be $3.26 in 2029.
Factors Influencing Per Capita Trends
Since per capita spending is a measurement of relative standard in a specific area, the factors influencing it are mostly location-based.
- Income Levels and Affordability: With higher disposable incomes, people spend more on non-essential goods. For example, Africa has a disposable income of $1,551 in 2025; so it has a very low per capita spending on goods like HVAC.
- Consumer Spending and Confidence: If the area (or country) is experiencing economic prosperity, people and businesses are likely to invest in accessories. In economic downturns, they focus on essentials only.
- Housing Market Trends: If an area constructs more homes with smart HVACs, the region will experience a revenue increase from the same population size.
- Adoption of Low-cost vs. Premium Systems: Income level, climate necessity, and government policies often dictate how much a group of people is willing to spend on their HVAC system. For example, the Middle East and India’s extreme heat demand any cooling solution, regardless of cost and luxury.
Contrasting Total Revenue vs Per Capita Trends
Total revenue statistics can be good for a regional expansion in terms of gross numbers. However, it can be misleading when it comes to population demand. For example, China has a massive HVAC revenue, but the 1.4B population makes per capita spending very low.
There’s still a catch. The low per capita spending and high total revenue indicates the market is good for budget system’s expansion.
In 2024:
- The US had a total revenue of $126.26 billion. Per capita, it was $369.38. This region leads the market in both category.
- Europe’s total revenue was $36.23 billion, and per capita revenue was $31.72 billion. Notably, Northern Europe had a per capita number of $64.20 billion.
- The total HVAC revenue from Asia was $95 billion. The number is mostly inflated by the number of air conditioner sales in China ($67.32 billion). Per capita HVAC revenue was $20.90 in Asia.
However, it varies from region to region. For example, Eastern Asia had a per capita revenue of $49.34, and Southeast Asia had $6.28. Countries like India have rapid total revenue growth ($9.81B in 2024) but low per capita revenue ($2.63) due to affordability barriers. - Australia & Oceania had a total revenue of $3.84 billion from the HVAC industry. However, this region had a per capita revenue of $57.27. It indicates that although the number of people living here is low, they are willing to spend more on premium products.
- Africa’s total HVAC revenue was $3.51 billion. The revenue per capita was $2.70, which is the lowest among all regions. The highest of this distribution comes from Southern Africa, but that is still $7.40.
Implications for Stakeholders
So the per capita revenue indicates how much each person has spent or would spend from a region. But what does it mean for stakeholders in the HVAC industry?
- HVAC Manufacturers & Suppliers
- The focus needs to be on budget systems in high-revenue, low-capita markets like China, India, and Southeast Asia. To meet high-volume demand, cost-effective and mass-market units like basic split systems at a scale production is the way to go.
- High capita markets, like the US, Australi, and Northern Europe, benefit from premium and smart HVAC systems including heat pumps and other IoT-enabled units.
- Africa & low-spending regions are dependent on ultra-low-cost solutions. The pay-as-you-go financing is a good option to explore.
- Policymakers and Regulators
- Policymakers can strengthen energy efficiency standards (e.g., banning low SEER units) and subsidize greener HVAC upgrades in high per capita markets (US, Europe).
- For low-capacity markets (India, Africa), they can incentivize affordable, efficient units by tax breaks or subsidies.
- Investors and Industry Analysts
- High total revenue & low per capita: The rising middle class is the future of demand. Betting on market penetration growth, like China and India, should yield the highest return.
- High per capita markets: Innovation-driven companies are the safest bet in this market.
- Overall low-spending and low-revenue markets: Investing in regions like Africa is a long-term growth plan. Different factors, such as urbanization and income growth, will contribute to the overall outcome.
- Commercial and Residential Constructors/Builders
- Premium HVAC systems and sub-systems like smart thermostats and zoning are safe selling points for luxury markets with high total revenue and high per capita revenue/spending (markets like the US, Europe).
- Emerging economies like India and Southeast Asia have a cost-competitive market. Low-maintenance and budget systems are safe bets for regions like these.
Future Outlooks and Challenges
Regardless of the upward market trends, the HVAC industry still faces some local and global issues in manufacturing and the supply chain. However, newer technologies, inventions, and integrations open up new opportunities in the industry.
| Challenge | Quick Description |
| Low Disposable Income | $1551 avg. in Africa limits HVAC purchases. |
| Unreliable Electricity Grids | Frequent power outages hurt AC performance (e.g., India). |
| Lack of Skilled Labor | Shortage of qualified HVAC installers in emerging markets. |
| Carbon Taxes & Regulations | May increase costs of older HVAC units. |
| Market Saturation in High-Capita Areas | US & Europe shifting from sales to repair/service. |
Potential Barriers
- Low disposable income groups (e.g., $1551 in Africa) have limit on their HVAC spending. However, subsidies, microloans, and scaled-down project designs can be a potential solution.
- Lack of skilled installers, unreliable electricity grids, and overall supply chain and infrastructure problems discourage people from investing in their HVAC systems. Power outages in India also reduce the effectiveness of air conditioners.
- Carbon taxes can raise the cost of conventional systems in high capita markets.
- Uses of cheap, inefficient units could be banned in the upcoming days, with countries like India also pushing for ISEER standards.
- For high capita markets like the US and Europe, the growth can slow down with market saturation. However, the competition is more likely to shift towards repairs and services.
Long-Term Projections
- The global per capita will rise overall. However, the spending will remain uneven from the growth trend.
- Even at the projected $394.96 billion in 2029 in the US, the focus will shift towards AI-driven predictive maintenance and other optimizations, especially with the promise the AI technology is showing.
- With the rise of gas prices, heat pumps can dominate in the US/European markets.
- Solar-powered ACs have the potential for sun-rich and low-income regions like the Middle East, especially with the emerging technologies.
- High population regions, like China and India, might still have low per capita income due to its population size.
- Regions like Southeast Asia are expected to experience income rises with events like Vietnam’s manufacturing booms. So, the region has potential for rapid growth.
- Africa’s projected $3.26 billion by 2029 is still going to be the lowest. However, the area is expected to have 2.5 billion population by 2050. So, it offers a high-scale potential.
Conclusion
The global HVAC spending has an upward trend. The US and Europe lead both in the high per capita and total revenue lists. So, the demand for premium and energy-efficient systems are also on the rise for these regions.
Economies like China and India boost Asia’s total revenue due to their huge population size, but they are constrained by low individual spending power. This region has a dual challenge: scaling affordable solutions for mass markets while advancing green HVAC innovations in wealthier regions.
As climate change intensifies, the industry must balance growth with accessibility so that cooling technology reaches not just those who can pay the most, but those who need it most.
Methodology
The blog uses existing market and forecast data from Statista. It focuses on the rise of global spending in the HVAC industry. The total revenue and per capita spending/revenue across different regions are represented in US dollars. Some future forecasts and other data were included for larger insights in some cases.
I’m Francis Kaspar, a 35-year-old HVAC technician with over 10 years of experience in the industry. I hold a certification in HVAC technology from Texas State Technical College, where I gained hands-on skills that shaped my career.
Currently, I’m working at The Chill Brothers, specializing in AC installation, repair, and energy-efficient solutions. Outside of work, I enjoy spending time with my wife and two kids.
I’m also passionate about sharing my HVAC knowledge written by articles that provide practical tips and tricks for homeowners.
