HVAC 2030 – The Future of Residential Markets in the US, Europe and ChinaJanuary 2022

The industry is undergoing many changes and entering a decisive decade for climate action. HVAC products and systems play a key role in the construction industry’s efforts to minimise carbon emissions in buildings.

BSRIA Worldwide Market Intelligence’s latest strategic study explores likely future scenarios of the residential heating market. HVAC 2030 looks at heating, ventilation, and air conditioning in the decade to come, offering a long-term view of the winning and losing products and solutions in residential heating in the US, Europe and China.

The study takes a longer-term forecast, based on two opposing scenarios:

• Conservative scenario (continued focus mainly on traditional products and solutions)
• Progressive scenario (moving towards renewables at a faster rate)

US HVAC Market

Our analysis for the US points to a growth of the total heating market between 2020 and 2030, in both scenarios, due to new construction and acceleration of replacement. Some of this growth comes from increasing use of secondary heating and dual fuel systems. The main product migrations or substitutions will be from oil boilers to gas and air-to-water heat pumps in hydronic systems; from furnaces to ducted heat pumps in conventional heating and to a lesser extent from electric baseboards and conventional heating to ductless.

In terms of CAGR, the largest expected growth is for hydronic heat pumps. However, market expansion is from a very low base and will be modest in volume terms.

The second largest CAGR growth is for the ductless market. This will be significant in unit terms but will have a limited erosive effect on other heating markets. Ductless compete especially on the cooling side with window units and are utilised as dual fuel in several applications.

Europe HVAC Market

In Europe, our analysis focuses on the top five heating markets – France, Germany, Italy, Netherlands, and the UK. Except for gas and electric boilers, the major difference between the two scenarios in the individual countries has mainly to do with the pace of change rather than the direction the market is going.

In terms of CAGR, the largest expected growth is for hydronic heat pumps. For both scenarios, the European heating market is clearly moving toward the electrification of heat. Under the same assumptions, the market for air-air heat pumps is expected to grow although from a relatively small basis, Europe-wide.

This is also true as far as electric boiler sales are concerned even though volumes will remain limited.

Oil boilers have been a declining market for some time. Most oil-heated homes will switch to gas and, to a lesser extent, to heat pumps or hybrid systems – heat pumps backed up by boilers.

The domestic gas boiler market is forecast to shrink moderately because of conversions to hydronic heat pumps, collective heating, and connection to district heating networks. Heat Interface Units will be preferred in new blocks of flats in urban centres.

China HVAC Market

In China, the share of gas boilers will increase as there is no subsidy for heat pumps (other than Coal to Electricity projects) and no ban on fossil fuels. The government pushes natural gas to replace other fossil fuels (mostly coal) before 2030 while they are more likely to push for green electricity in the next decade.

Accordingly, the heat pump share is set to decline in the shorter term but to grow towards the end of the decade because of fluctuating energy prices, the decreasing price of heat pumps, and growing consumer awareness.

The situation will be very different from region to region as energy prices differ from one region to another making one product more competitive in some than others. Other factors include the existence in a region of a gas grid or PV and wind power farms and the type of houses to heat. Heat pumps are mainly used either in high-end villas in suburban areas, or cottages in rural areas but are not seen where space is limited, particularly in flats with access to the gas grid and flats are the dominant residential type in the country.

A minority of the population use air-to-air heat pumps as a primary heating source, such as single splits and VRF. District heating is encouraged and will grow in the north of the country.

HVAC 2030

BSRIA has been researching heating and cooling markets annually for 30 years. This wealth of historic data, combined with industry expertise and dedicated primary research, provides an unrivalled assessment of market factors and their impact. Our reports on the USA and Europe are available now. Our China report will be published at the end of January.

For further information about the study, please contact:

European sales enquiries: BSRIA UK: wmi@bsria.co.uk +44 (0) 1344 465 540 www.bsria.com/uk/

America sales enquiries: BSRIA USA: sales@bsria.com ¦ +1 312 753 6803 www.bsria.com/us/

China sales enquiries: BSRIA China: bsria@bsria.com.cn ¦ +86 10 6465 7707 www.bsria.com/cn/