Driven by technological advances, urbanization and increasing demand for energy efficiency, the heating, ventilation, and air conditioning (HVAC) market is undergoing continuous change.
As the industry evolves, smart technology, sustainability and eco-friendly systems and products are at the forefront of conversation.
Meanwhile, certain HVAC trends that emerged during the COVID-19 pandemic—when home and business owners were hyper-conscious of health and safety in indoor environments—have subsided.
With notable growth predicted in both the HVAC services and HVAC systems markets, there is plenty of opportunity for product manufacturers to respond with new innovations and marketing strategies to address the desires and concerns of industry professionals and homeowners in 2025.
What is Currently Trending in HVAC?
Being aware of current HVAC industry trends can help various channel stakeholders—from manufacturers and distributors to contractors, installers and repair/maintenance service providers—properly strategize for the future.
Here are a few key HVAC industry trends to monitor as you seek new business opportunities in the coming years:
1. Growth Continues for Both HVAC Services and Systems
The U.S. HVAC industry is growing based on findings across several research sources: The Home Improvement Research Institute publishes current U.S. size of market data for HVAC to it's member base based on findings from the U.S. Census Bureau. Separately, as of 2023, the U.S. HVAC systems market was estimated at $30.41 billion, and is projected to grow at a CAGR of 7.4% to reach $49.7 billion in 2030, according to Grandview Research. Mordor Intelligence has estimated the global HVAC services market at $69.85 billion; it is projected to grow at a compound annual growth rate (CAGR) of 6.28%, reaching about $94.71 billion by 2030.
For the most current, and accurate data, consider working with our custom market researchers at The Farnsworth Group. We will help you narrow in on the specific market your company is looking to address through strategic market sizing research.
There are several factors contributing to the uptick in market demand, including new construction and renovations; the drive toward sustainability and efficiency; and climatic conditions.
2. Customers’ Health and Safety Concerns Back to Pre-Covid Levels
During the height of the COVID-19 pandemic, there was a large influx of awareness around creating healthy home environments and a wide range of safety concerns. This helped spur projects in the HVAC arena to help improve indoor air quality (IAQ) and the comfort of home by managing household dust, enhancing ventilation, and mitigating internal and external air pollutants. Now, however, the number of homeowners who are concerned about home health and safety has nearly returned to pre-COVID levels, with only 32% expressing concern, according to our forthcoming 2024 Healthy Home Study. The change in concern levels is likely to affect what home improvement activities individuals prioritize in 2025.
3. Indoor Air Quality is the Primary Health and Safety Concern
Although home health and safety concerns have declined in general, IAQ remains the top concern among the majority of homeowners. According to our Healthy Home study, 53% of homeowners with health and safety concerns listed IAQ as one of them. This isn’t surprising, considering the U.S. Environmental Protection Agency (EPA) estimates that, on average, individuals spend about 90% of their time indoors, in both residential and commercial buildings. And these concerns aren’t reserved for Americans. The global demand for air purifiers has increased as a result of the frequency of airborne illnesses and rising pollution levels in the U.S. and abroad. Our study shows that some of the most popular healthy home-related improvement activities planned for the next year include implementing air quality monitoring systems; installing/replacing range hoods and exhaust fans; incorporating whole house air exchangers/filtration/purifiers; and duct sealing.
4. Digital Connectivity is Here to Stay
By this point, it’s clear the digital world has influence over how customers shop and what they shop for. Many individuals, both DIY homeowners and trade professionals, do online research when looking for new products or finding a service provider to install or repair an HVAC system.
Additionally, automation and Wi-Fi enabled household appliances are becoming more of the norm, as homeowners seek connectivity and cohesion among their smart technology. They want more control over their home environments, including energy output, humidity levels and airflow. Intelligent systems and features—such as smart thermostats, remote temperature adjustment, self-regulation, sensors and more—can be used to optimize energy efficiency and convenience. Some smart technologies also utilize artificial intelligence (AI) and predictive maintenance platforms to help with early detection of issues, inefficiencies, or failures. Not only does this enhance reliability of HVAC systems, but it also can help property owners control costs and streamline maintenance. Manufacturers should consider these trends when developing new products and selecting channels for distribution.
That being said, consumers still desire a personal touch and will seek information from sales and service reps at home improvement centers as they make final decisions. It’s important to have employees at various levels with knowledge to communicate about smart products and systems and even how to install them. The data-collecting component of smart technology can also help HVAC technicians quickly identify and repair issues to minimize downtime and better serve clients.
5. Business and Homeowners Demand Energy Efficiency
The demand for energy-efficiency equipment—coupled with a growing real estate market—is contributing heavily to the current and forecasted HVAC demand in the U.S. Homeowners have a desire to utilize eco-friendly products that limit their environmental impact, which is leading to the rise of green consumerism, especially in the HVAC industry. One of the key focuses for sustainable building practices is integrating renewable energy sources into HVAC systems, such as geothermal energy or solar power.
In terms of sustainability, ductless HVAC systems are also growing in popularity. These systems can help address some of the issues associated with both the design and installation of ductwork within a building. They are easier to install and maintain, improve IAQ, and minimize duct-related energy losses. There also have been developments in energy recovery ventilation (ERC) systems, which improve energy efficiency and also manage moisture and pollutants in indoor air.
6. Balancing Comfort with Cost-Savings
Additionally, smart technology and sustainability often intersect in terms of market demands. One trend in the air conditioning systems market is the desire for precision indoor climate control solutions with advanced monitoring and data analytics to offer personalized temperatures within different zones of a building. The ability to continually monitor and adjust temperatures based on various factors—weather conditions, occupancy, or changes in building usage—benefits property owners by lowering operating costs and optimizing energy efficiency, while also enhancing indoor comfort and well-being.
7. The Majority of HVAC Pros Have Not Participated in Certification Programs
Despite a shift in customer demand for greater focus on HVAC innovations in their homes, the majority of HVAC professionals have not participated in training or certification programs to help them with healthy or green-home work. For example, only 20% of HVAC employees and subcontractors have completed trainings offered by the Indoor Air Quality Association (IAQA) and only 21% the Certified Renovator for Lead Renovation, Repair and Painting from the EPA.
The knowledge gap represents a significant opportunity for HVAC manufacturers to introduce educational programs that better equip contractors, subcontractors, and other professionals to serve customer preferences. This is especially critical in light of the growing job market in the HVAC industry. According to data from the U.S. Bureau of Labor Statistics, the volume of jobs in the U.S is expected to grow about 9% through 2030, which is much faster than average.
A.O. Smith is an example of a company doing just that—and doing it successfully, through their A.O. Smith University website. In June 2024, they launched a brand-new Learn and Earn training series centered on their latest technologies: the Voltex AL Heat Pump Water Heater (HPWH) and the Adapt Tankless Water Heater. A.O. Smith remains a leader in innovation, but they actively strive to equip HVAC professionals with the knowledge and confidence they need to successfully work with the company’s evolving products and technologies.
8. New HVAC Technologies Emerge
In response to what is currently in demand in the HVAC industry, smart and eco-friendly technologies tend to dominate in terms of what’s new or emerging. Take, for instance, Panasonic’s recent advancement in residential heat pump technology. They recently added INTERIOS to their Breathe Well line. This flexible central heat pump system is designed to help homeowners more cost-effectively cool and heat their residential spaces.
Daikin is also embracing the demand for sustainability and eco-friendly solutions. In 2023, they opened their new Sustainability and Innovation Center in Washington. Their goal was to help promote and support the transition to refrigerant R-32—which offers reduced environmental impact and better efficiency—and invest in developing efficient and sustainable HVAC systems.
Another recent development in the HVAC industry was Broan-NuTone’s launch of the EVOLVE Premium exhaust fan series, which demonstrates the company’s commitment to industry-leading airflow performance.
Technological advances are also aimed at supporting professional contractors and homeowners, such as Johnson Controls’ free Ducted Systems (DS) Solutions App, introduced in 2023 to expand their collection of resources for commercial and residential resources. It provides information to help with installation, troubleshooting, and maintenance, and serves as an example of how manufacturers can strengthen their standing in the HVAC market by supporting industry professionals.
7 Ways to Respond to Growth in the HVAC Market: Strategic Actions for Building Product Manufacturers and Suppliers
As the HVAC market continues to grow and evolve, building product manufacturers and suppliers need to strategically position themselves to capture new opportunities while maintaining competitiveness in a crowded field. To succeed in this dynamic environment, here are key actions you can take:
1. Innovate and Diversify Product Offerings
Given the rising demand for energy-efficient, eco-friendly HVAC solutions, manufacturers should prioritize innovation. This includes developing products that integrate renewable energy sources, such as geothermal or solar-powered systems, and expanding the range of ductless HVAC systems, which are becoming increasingly popular due to their installation ease and efficiency. Additionally, offering products that improve indoor air quality (IAQ) will align with ongoing consumer concerns about health and well-being. Think smart filtration systems, advanced air purifiers, and energy recovery ventilators (ERVs) that both save energy and enhance indoor comfort.
2. Leverage Smart Technology and Connectivity
Building product manufacturers must meet the growing demand for digital integration in HVAC systems. Homeowners and business owners are looking for HVAC solutions that offer more control over their environment—think smart thermostats, automated temperature controls, and predictive maintenance capabilities. Manufacturers should focus on creating products that offer seamless integration with smart home ecosystems and provide features like remote monitoring and AI-driven energy optimization. Offering these innovations not only appeals to modern consumers but can also streamline operations for HVAC contractors by improving system diagnostics and reducing maintenance downtime.
3. Invest in Providing Training and Education
As HVAC systems become more complex, manufacturers should invest in developing educational resources for contractors, installers, and service providers. Offering certifications or online training programs that focus on new technologies, such as advanced filtration systems, heat pumps, or smart HVAC setups, can help fill the knowledge gap in the industry. Companies like A.O. Smith are already setting a strong example by providing training through platforms like A.O. Smith University. By empowering industry professionals with the skills to install and maintain cutting-edge systems, manufacturers can ensure their products are deployed efficiently and effectively in the field.
4. Enhance Customer Experience and Support
With the increasing reliance on online research and shopping, building product manufacturers should ensure their digital presence is strong. This includes maintaining easy-to-navigate websites, providing detailed product specifications, offering virtual consultations, and ensuring customer service is responsive and knowledgeable. As contractors and consumers alike seek more personalized advice, manufacturers should provide detailed guides and troubleshooting resources—like apps or video tutorials—to enhance the customer journey. Additionally, providing tools that help installers select the right system for specific projects can improve sales and customer satisfaction.
5. Emphasize Sustainability and Green Building Practices
Sustainability isn’t just a trend; it’s a long-term shift in consumer values. Manufacturers that can position themselves as the brand with green, energy-efficient HVAC products will be able to capitalize on this shift. This includes developing systems with reduced environmental impact, such as low-GWP (Global Warming Potential) refrigerants or systems designed to pair with renewable energy sources. As building codes and regulations increasingly prioritize sustainability, manufacturers should be proactive in creating solutions that meet or exceed these requirements.
6. Streamline Operations and Infrastructure
As demand for HVAC products grows, manufacturers and suppliers must ensure they have the infrastructure to scale efficiently. Investing in robust supply chain management, inventory systems, and business software will allow companies to handle increased orders and service requests without sacrificing quality. This includes implementing project management tools that improve collaboration across teams and ensure timely delivery of products to market. Furthermore, manufacturers should consider strategic partnerships with distributors and contractors to ensure a smooth flow of products from production to installation.
7. Attract and Retain Talent
With the HVAC industry expected to grow rapidly, attracting skilled workers will be a key challenge. Building product manufacturers and suppliers must focus on fostering a positive company culture to appeal to younger generations entering the workforce. Offering flexible work options, supporting career development, and promoting a healthy work-life balance are essential to attracting top talent. Companies should also focus on retaining experienced employees by providing opportunities for advancement, continuous training, and a work environment that values innovation and teamwork.
By addressing these areas, building product manufacturers and suppliers can stay ahead of the curve and successfully navigate the evolving HVAC market. The opportunities for growth are substantial, but only for those who are proactive in adapting to new technologies, customer demands, and industry trends.
What is the Future of Your HVAC Company?
You need to know where the greater HVAC market is going, by what forces, and what hurdles are preventing forward progress. Beyond general industry forecasting, you need to understand your brand’s position in the market and commit to making informed decisions during quickly changing times. Learn more about the four buckets of custom research The Farnsworth Group conducts to provide actionable insights for home improvement and building products companies exclusively.
