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Commercial Air Conditioning System (VRF) Market Report

RA08366

Commercial Air Conditioning System (VRF) Market by Type (Heat Recovery System and Heat Pump System), Component (Outdoor Unit, Indoor Unit, and Control System), Application (Commercial, Residential, and Industrial), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2020–2027
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Impact of covid-19 on Commercial Air Conditioning System (VRF) Market

Global Commercial Air Conditioning System (VRF) Market Analysis

The global commercial air conditioning system (VRF) market is predicted to garner $34,619.00 million in the 2020–2027 timeframe, growing from $15,859.80 million in 2019 at a healthy CAGR of 13.5%.

Market Synopsis

Strategic alliances among market players, along with the launching of new products, is expected to accelerate the growth of the commercial air conditioning system (VRF) market. 

However, the high cost incurred in the installation of VRF HVAC systems is a growth-restricting factor for the market.

According to the regional analysis of the market, the North American commercial air conditioning system (VRF) market is anticipated to grow at a CAGR of 17.5% by generating a revenue of $3,531.10 million during the review period.

Commercial Air Conditioning System (VRF) Overview

VRF, short for variable refrigerant flow and also called variable refrigerant volume (VRV), is an HVAC technology developed by an industry-leading player, Daikin Industries, Ltd in 1982. The VRF system uses refrigerants as the heating and cooling medium for various units and is capable of providing simultaneous heating and cooling.

Impact Analysis of COVID-19 on the Global Commercial Air Conditioning System (VRF) Market

The COVID 19 pandemic has had a significant effect on the growth of the global VRF system market. HVAC Technologies are essential to personal comfort at a time when people are spending more time at home. Besides, HVAC technologies provide heating, cooling, and air filtration in institutions such as hospitals, clinics, and laboratories. The COVID-19 outbreak and home quarantine disrupted industrial supply and the global supply and forced component suppliers and manufacturers to think differently about how to use the global distribution network to support business continuity. 

Industry participants had operational challenges owing to the implementation of safety protocols to contain the spread of the virus, causing manpower shortage. Along with the disruption in the industrial supply chain, the outbreak of the novel coronavirus led to a fluctuation in the demand for HVAC systems, including VRF systems due to the closure of offices and commercial establishments. 

Due to social distancing, the manufacturers, service providers, and contractors were either not allowed or reluctant to provide installation service resulting in decreasing demand and, ultimately decreasing sales volume and revenue of the companies. The impact was then felt across the value and supply chain, with both upstream and downstream effects.

Rising Demand for Energy-efficient HVAC Systems among Consumers to Surge the Market Growth

Conventional HVAC systems consume almost 50% of total energy, ultimately putting a financial burden on the consumer. However, the VRF system is energy efficient, quieter, and easy to install and maintain, owing to which people are shifting their preference toward the VRF system. Increasing awareness regarding energy-efficiency and changing legislation is expected to influence the adoption of VRF systems in countries like the U.S., Japan, and China. In addition, technologies that aim at enhancing energy efficiency reduce the environmental impacts and cost implications and sustain efficiency in a system.

The energy efficiency of VRF technology has been proven in numerous studies by comparing the system performance with traditional HVAC systems such as central chiller and boiler systems and rooftop variable air volume systems (RTU-VAV). The VRF systems technology allows 40% to 50% efficiency improvement over standard RTU systems. Moreover, the VRF system provides better cooling in a multistorey apartment compared to conventional RTU units, owing to which residential and commercial consumers are steadily replacing their AC system with VRF technologies.

To know more about global commercial air conditioning system (VRF) market drivers, get in touch with our analysts here.

High Cost of Installation to Restrain the Market Growth

The initial cost of installing a VRF system is high. This system is costlier by 15-20% while 50% more energy efficient compared to conventional air conditioning systems. For instance, a study conducted by Washington State University estimates that the cost of installing a VRF HVAC system is about USD 18 per square foot served, while a traditional HVAC system could cost about USD 12 to USD 15 per square foot.

Growing Demand for Air Conditioning Systems in Emerging Economies to Create Massive Investment Opportunities

The demand for HVAC technologies is steadily increasing in emerging economies such as the UAE, India, Mexico, and Brazil owing to the rising temperature and disposable income. According to the National Oceanic and Atmospheric Administration (NOAA’s), U.S. Department of Commerce, 2020 Annual Climate Report, since 1880 the combined ocean and land temperature has increased at an average rate of 0.08°C per decade; however, the average rate of increase since 1981 (0.18°C) has been more than twice that rate. 

Modern buildings constructed across the world are often designed with large panes of glasses that attract sunlight and heat up the rooms much quicker, thereby requiring cooling. Besides, due to the increasing number of double-income households, the demand for luxury electronic appliances is steadily occupying space in modern buildings and homes, thereby providing growth opportunity for air conditioning systems in the emerging economies. 

To know more about global commercial air conditioning system (VRF) market opportunities, get in touch with our analysts here.

Global Commercial Air Conditioning System (VRF) Market, by Type

Based on type, the market has been divided into heat recovery system and heat pump system of which the heat recovery system sub-segment is projected to generate the maximum revenue and heat pump system sub-segment is predicted to show the fastest growth.

Global Commercial Air Conditioning System (VRF) Market, by Type

Source: Research Dive Analysis

The heat recovery system sub-segment is predicted to have a dominating market share in the global market and is expected to register a revenue of $22,148.8 million during the forecast period. The heat recovery system is widely used in commercial establishments such as malls, schools, hotels, and restaurants, among others where simultaneous heating and cooling is required. Increasing investment coupled with growing construction activities in the corporate & service sectors is expected to drive the demand for the heat recovery VRF system in the coming years.

The heat pump system sub-segment is anticipated to have the fastest market growth and it is predicted that the market shall generate a revenue of $12,470.20 million by 2027, growing from $4,903.40 million in 2019. The heat pump system is easy to install and maintain, as well as the product is energy-efficient compared to a heat recovery system owing to which heat pump system is widely preferred for residential buildings. An increasing number of double-income households has improved the living standards of consumers in urban areas; as a result, consumers are spending on electronic appliances including HVAC systems.

Global Commercial Air Conditioning System (VRF) Market, by Component

On the basis of component, the market has been sub-segmented into outdoor unit, indoor unit, and control system. Among the mentioned sub-segments, the indoor unit sub-segment is predicted to show the fastest growth, whereas outdoor unit sub-segment is projected to garner a dominant market share.

Global Commercial Air Conditioning System (VRF) Market, by Component

Source: Research Dive Analysis

The indoor unit sub-segment of the global commercial air conditioning system (VRF) market is projected to have the fastest growth and surpass $13,076.0 million by 2027, with an increase from $5,531.0 million in 2019. This growth in the market can be attributed to increasing construction activity in the commercial and residential sectors. Furthermore, the indoor unit manufacturers have introduced slim and compacted models for limited spaces, such as offices and small shops, which may surge the market growth.

The outdoor unit sub-segment is anticipated to have a dominating market share in the global market and register a revenue of $ 15,502.4 million during the analysis timeframe. The market for outdoor units is driven by the increasing replacement and retrofitting demand in countries like the U.S., China, Japan, and South Korea. Increased awareness among consumers and implementation of legislation to curb carbon emission has resulted in shifting consumer preference from traditional HVAC to VRF system, thereby fueling the demand over the forecast period.

Global Commercial Air Conditioning System (VRF) Market, by Application:

Based on application, market has been divided into commercial, residential, and industrial. Out of these, the residential sub-segment is predicted to have the fastest growth and commercial sub-segment is anticipated to garner the maximum revenue share in the global market.

Global Commercial Air Conditioning System (VRF) Market, by Application

Source: Research Dive Analysis

The residential sub-segment of the global commercial air conditioning system (VRF) market is predicted to have rapid growth and surpass $8,809.7 million by 2027, with an increase from $3,560.3 million in 2019 owing to the increasing investment in residential construction activities in countries like the UAE, India, and Brazil. Rapid urbanization and increasing population are expected to have a positive influence on the growth of the residential sector which in turn is projected to boost the demand for VRF systems in the coming years.

The commercial sub-segment is predicted to have a dominating market share in the global market and register a revenue of $22,204.1 million during the analysis timeframe owing to the increasing numbers of malls, retail space, and corporate buildings in countries like India, UAE, and China. For instance, according to the Business Standard, mall developers and investors such as Raheja-owned Inorbit Malls, Xander-APG joint venture Virtuous Retail South Asia (VRSA), property developer Prestige Estates Projects, and Blackstone-owned Nexus Malls are looking to double their space in a year or two.

Global Commercial Air Conditioning System (VRF) Market, Regional Insights:

The commercial air conditioning system (VRF) market was investigated across North America, Europe, Asia-Pacific, and LAMEA.

Global Commercial Air Conditioning System (VRF) Market, Regional Insights

Source: Research Dive Analysis

The Market for Commercial Air Conditioning System (VRF) in Asia-Pacific to be the Most Dominant

The Asia-Pacific commercial air conditioning system (VRF) market accounted $10,261.3 million in 2019 and is projected to register a revenue of $21,117.6 million by 2027. The market is driven by the high concentration of VRF systems in countries like China, Japan, and South Korea. Moreover, increasing popularity among retrofitting contractors will further surge the demand in the region in the coming years. Besides, the growing IT sector in India and Australia is expected to have a positive impact on the adoption of the VRF system owing to benefits such as low maintenance cost. In addition, the VRF technology is capable of providing heating and cooling simultaneously to units owing to which it may be used in data centers for ventilation, thereby fueling the demand for the VRF system in the IT sector in the coming years.

The Market for Commercial Air Conditioning System (VRF) in North America to be the Fastest Growing

The share of North America commercial air conditioning system (VRF) market is anticipated to grow at a CAGR of 17.5% by registering a revenue of $1,221.2 million by 2027. The growth shall be a result of increasing adoption of VRF system large businesses. Growing awareness related to the associate benefits of installing VRF systems among commercial consumers and high-end residential buildings along with the increasing popularity, especially in the U.S., are the major factors driving the market for VRF systems in the region. Besides, to increase product reach, companies are focusing on strategic collaboration and new product launches to cater to the growing demand from the replacement and retrofitting industry. For instance, on 22 May 2019, Mitsubishi Electric-Ingersoll Rand joint venture introduced City Multi and Nv series air conditioners for the U.S market.

Competitive Scenario in the Global Commercial Air Conditioning System (VRF) Market

Product launches and mergers & acquisitions are common strategies followed by major market players.

Competitive Scenario in the Global Commercial Air Conditioning System (VRF) Market

Source: Research Dive Analysis

Some of the leading commercial air conditioning system (VRF) market players are DAIKIN INDUSTRIES, Ltd., Midea Group, JOHNSON CONTROLS INTERNATIONAL PLC., LG Electronics, MITSUBISHI ELECTRIC CORPORATION, Panasonic Corporation, FUJITSU, TOSHIBA CORPORATION, Ingersoll Rand, and Carrier Global Corporation.

Porter’s Five Forces Analysis for the Commercial Air Conditioning System (VRF) Market:

  • Bargaining Power of Suppliers: The suppliers in the commercial air conditioning system (VRF) market are high in number. Several companies are working on product designs that use different raw materials to avoid changing the supplier if the there is a hike in the price of a particular material. Thus, there is less threat from the suppliers. 
    Thus, the bargaining power suppliers is moderate.
  • Bargaining Power of Buyers: Buyers have huge bargaining power; they demand best services at low prices. This increases the pressure on the VRF system providers to offer the best service in a cost-effective way. Thus, buyers can freely choose the convenient service that best fits their preference. 
    Thus, the bargaining power of the buyers is high.
  • Threat of New Entrants: Companies entering the VRF system market are working on launching energy efficient products to attract clients. Also, these companies are implementing various effective strategies such as offering discounts and value propositions. 
    Thus, the threat of the new entrants is moderate.
  • Threat of Substitutes: High visibility coupled with the increased penetration of conventional HVAC systems, worldwide is the major substitute to VRF systems. However, the growing popularity of the VRF system owing to its operational efficiency is expected to increase product adoption in the coming years. 
    Thus, the threat of substitutes is low.
  • Competitive Rivalry in the Market: The competitive rivalry among industry leaders is rather intense, especially between the global players including Daikin Industries, Midea Group, and Jonson Control International, Plc. These companies are launching innovative and energy efficient products in the international market and strengthening the footprint worldwide. 
    Therefore, competitive rivalry in the market is high.

Aspect

Particulars

  Historical Market Estimations

  2018-2019

  Base Year for Market Estimation

  2019

  Forecast Timeline for Market Projection

  2020-2027

  Geographical Scope

  North America, Europe, Asia-Pacific, LAMEA

  Segmentation by Type

  • Heat Recovery System
  • Heat Pump System

  Segmentation by Component

  • Outdoor Unit
  • Indoor Unit
  • Control System

  Segmentation by Application

  • Commercial
  • Residential
  • Industrial

  Key Companies Profiled

  • DAIKIN INDUSTRIES, Ltd.
  • Midea Group
  • JOHNSON CONTROLS INTERNATIONAL PLC.
  • LG Electronics
  • MITSUBISHI ELECTRIC CORPORATION
  • Panasonic Corporation
  • FUJITSU
  • TOSHIBA CORPORATION
  • Ingersoll Rand
  • Carrier Global Corporation

Frequently Asked Questions
 

A. The size of the global commercial air conditioning system (VRF) market was over $15,859.8 million in 2019 and is projected to reach $34,619.0 million by 2027.

A. DAIKIN INDUSTRIES, Ltd., Midea Group, and JOHNSON CONTROLS INTERNATIONAL PLC are some of the key players in the global application security market.

A. The North America region possesses great investment opportunities for investors to witness the most promising growth in the future.

A. North America commercial air conditioning system (VRF) market is anticipated to row at 17.5% CAGR during the forecast period.

A. New product launch and strategic partnerships are the key strategies opted by the operating companies in this market.

A. Carrier Corporation and Toshiba Corporation are investing on R&D activities for developing new products and technologies.

CHAPTER 1:INTRODUCTION

1.1.Research methodology

1.1.1.Desk research
1.1.2.Real-time insights and validation
1.1.3.Forecast model
1.1.4.Assumptions & forecast parameters

1.1.4.1.Assumptions
1.1.4.2.Forecast parameters

CHAPTER 2:EXECUTIVE SUMMARY

2.1.360° summary
2.2.Type trends
2.3.Component trends
2.4.Application trends

CHAPTER 3:MARKET OVERVIEW

3.1.Market definition and scope
3.2.Key takeaways

3.2.1.Top investment pockets
3.2.2.Top winning strategies

3.2.2.1.Top winning strategies, by year
3.2.2.2.Top winning strategies, by development
3.2.2.3.Top winning strategies, by company

3.2.3.Top player positioning

3.3.Porter’s five forces analysis
3.4.Market dynamics

3.4.1.Drivers

3.4.1.1.Rising demand for energy-efficient HVAC system among consumers
3.4.1.2.Increasing construction projects across the world

3.4.2.Restraints

3.4.2.1.High cost of installation may impede the market growth

3.4.3.Opportunities

3.4.3.1.Growing demand for air conditioning systems in emerging economies

3.5.Technology landscape
3.6.Market value chain analysis
3.7.Strategic overview

CHAPTER 4:IMPACT OF COVID19 ON GLOBAL COMMERCIAL AIR CONDITIONING SYSTEMS (VRF)  MARKET

4.1.Introduction

4.2.COVID-19 health assessment
4.3.Impact of COVID-19 on the global economy
4.4.Impact of COVID-19 on global commercial air conditioning system  (VRF) market

4.4.1.Social impact
4.4.2.Technological impact
4.4.3.Investment scenario

4.5.Commercial air conditioning systems (VRF) market size and forecast, by region, 2019-2027

CHAPTER 5:GLOBAL COMMERCIAL AIR CONDITIONING SYSTEMS (VRF) MARKET, BY TYPE

5.1.Overview

5.1.1.Market size and forecast, by type
5.2.Heat recovery system

5.2.1.Key market trends, growth factors and opportunities
5.2.2.Market size and forecast, by region
5.2.3.Market share analysis, by country

5.3.Heat pump system

5.3.1.Key market trends, growth factors and opportunities
5.3.2.Market size and forecast, by region
5.3.3.Market share analysis, by country

CHAPTER 6:GLOBAL COMMERCIAL AIR CONDITIONING SYTEMS (VRF) MARKET, BY COMPONENTS

6.1.Overview

6.1.1.Market size and forecast, by Components

6.2.Outdoor unit

6.2.1.Key market trends, growth factors and opportunities
6.2.2.Market size and forecast, by region
6.2.3.Market share analysis, by country

6.3.Indoor unit

6.3.1.Key market trends, growth factors and opportunities
6.3.2.Market size and forecast, by region
6.3.3.Market share analysis, by country

6.4.Control system

6.4.1.Key market trends, growth factors and opportunities
6.4.2.Market size and forecast, by region
6.4.3.Market share analysis, by country

CHAPTER 7:GLOBAL COMMERCIAL AIR CONDITIONING SYSTEM (VRF) MARKET, BY COMPONENT

7.1.Overview

7.1.1.Market size and forecast, by application

7.2.Commercial

7.2.1.Key market trends, growth factors and opportunities
7.2.2.Market size and forecast, by region
7.2.3.Market share analysis, by country

7.3.Residential

7.3.1.Key market trends, growth factors and opportunities
7.3.2.Market size and forecast, by region
7.3.3.Market share analysis, by country

7.4.Industrial

7.4.1.Key market trends, growth factors and opportunities
7.4.2.Market size and forecast, by region
7.4.3.Market share analysis, by country

CHAPTER 8:GLOBAL COMMERCIAL AIR CONDITIONING SYSTEM (VRF) MARKET, BY REGION

8.1.Overview

8.1.1.Market size and forecast, by region

8.2.North America

8.2.1.Key market trends, growth factors, and opportunities
8.2.2.Market size and forecast, by type
8.2.3.Market size and forecast, by component
8.2.4.Market size and forecast, by component
8.2.5.Market size and forecast, by country

8.2.6.U.S. 

8.2.6.1.Market size and forecast, by type

8.2.7.2 Market size and forecast, by component

8.2.8. 3.Market size and forecast, by application

8.2.9.Canada

8.2.9.1.Market size and forecast, by type

8.2.10.Market size and forecast, by component
8.2.11.Market size and forecast, by application

8.2.12.Mexico

8.2.12.1.Market size and forecast, by type
8.2.12.2. Market size and forecast, by component
8.2.12.3. Market size and forecast, by application

8.3.Europe

8.3.1.Key market trends, growth factors, and opportunities
8.3.2.Market size and forecast, by type
8.3.3.Market size and forecast, by component
8.3.4.Market size and forecast, by application
8.3.5.Market size and forecast, by country

8.3.6.Germany

8.3.6.1.Market size and forecast, by type
8.3.6.2.Market size and forecast, by component
8.3.6.3.Market size and forecast, by application

8.3.7.France

8.3.7.1.Market size and forecast, by type
8.3.7.2.Market size and forecast, by component
8.3.7.3.Market size and forecast, by application

8.3.8.UK

8.3.8.1.Market size and forecast, by type
8.3.8.2.Market size and forecast, by component
8.3.8.3.Market size and forecast, by application

8.3.9.Italy

8.3.9.1.Market size and forecast, by type
8.3.9.2.Market size and forecast, by component
8.3.9.3.Market size and forecast, by application

8.3.10.Spain

8.3.10.1.Market size and forecast, by type
8.3.10.2.Market size and forecast, by component
8.3.10.3.Market size and forecast, by application

8.3.11.Rest of Europe

8.3.11.1.Market size and forecast, by type
8.3.11.2.Market size and forecast, by component
8.3.11.3.Market size and forecast, by application

8.4.Asia-Pacific

8.4.1.Key market trends, growth factors, and opportunities
8.4.2.Market size and forecast, by type
8.4.2.1.Market size and forecast, by component
8.4.2.2.Market size and forecast, by application
8.4.3.Market size and forecast, by country

8.4.4.Japan

8.4.4.1.Market size and forecast, by type
8.4.4.2.Market size and forecast, by component
8.4.4.3.Market size and forecast, by application

8.4.5.China

8.4.5.1.Market size and forecast, by type
8.4.5.2.Market size and forecast, by component
8.4.5.3.Market size and forecast, by application

8.4.6.Australia

8.4.6.1.Market size and forecast, by type
8.4.6.2.Market size and forecast, by component
8.4.6.3.Market size and forecast, by application

8.4.7.India

8.4.7.1.Market size and forecast, by type
8.4.7.2.Market size and forecast, by component
8.4.7.3.Market size and forecast, by application

8.4.8.South Korea

8.4.8.1.Market size and forecast, by type
8.4.8.2.Market size and forecast, by component
8.4.8.3.Market size and forecast, by application

8.4.9.Rest of Asia-Pacific

8.4.9.1.Market size and forecast, by type
8.4.9.2.Market size and forecast, by component
8.4.9.3.Market size and forecast, by application

8.5.LAMEA

8.5.1.Key market trends, growth factors, and opportunities
8.5.1.1.Market size and forecast, by type
8.5.1.2.Market size and forecast, by component
8.5.1.3.Market size and forecast, by application
8.5.2.Market size and forecast, by country

8.5.3.Latin America

8.5.3.1.Market size and forecast, by type
8.5.3.2.Market size and forecast, by component
8.5.3.3.Market size and forecast, by application

8.5.4.Middle East

8.5.4.1.Market size and forecast, by type
8.5.4.2.Market size and forecast, by component
8.5.4.3.Market size and forecast, by application

8.5.5.Africa

8.5.5.1.Market size and forecast, by type
8.5.5.2.Market size and forecast, by component
8.5.5.3.Market size and forecast, by application

CHAPTER 9:COMPANY PROFILES

9.1.DAIKIN INDUSTRIES, Ltd. 

9.1.1.Company overview
9.1.2.Company snapshot
9.1.3.Operating business segments
9.1.4.Product portfolio
9.1.5.Business performance
9.1.6.Key strategic moves and developments

9.2.Midea Group

9.2.1.Company overview
9.2.2.Company snapshot
9.2.3.Operating business segments
9.2.4.Product portfolio
9.2.5.Business performance
9.2.6.Key strategic moves and developments

9.3.JOHNSON CONTROLS INTERNATIONAL PLC. 

9.3.1.Company overview
9.3.2.Company snapshot
9.3.3.Operating business segments
9.3.4.Product portfolio
9.3.5.Business performance
9.3.6.Key strategic moves and developments

9.4.LG Electronics

9.4.1.Company overview
9.4.2.Company snapshot
9.4.3.Operating business segments
9.4.4.Product portfolio
9.4.5.Business performance
9.4.6.Key strategic moves and developments

9.5.MITSUBISHI ELECTRIC CORPORATION

9.5.1.Company overview
9.5.2.Company snapshot
9.5.3.Operating business segments
9.5.4.Product portfolio
9.5.5.Business performance
9.5.6.Key strategic moves and developments

9.6.Panasonic Corporation

9.6.1.Company overview
9.6.2.Company snapshot
9.6.3.Operating business segments
9.6.4.Product portfolio
9.6.5.Business performance
9.6.6.Key strategic moves and developments

9.7.FUJITSU

9.7.1.Company overview
9.7.2.Company snapshot
9.7.3.Operating business segments
9.7.4.Product portfolio
9.7.5.Business performance
9.7.6.Key strategic moves and developments

9.8.TOSHIBA CORPORATION

9.8.1.Company overview
9.8.2.Company snapshot
9.8.3.Operating business segments
9.8.4.Product portfolio
9.8.5.Business performance
9.8.6.Key strategic moves and developments

9.9.Ingersoll Rand

9.9.1.Company overview
9.9.2.Company snapshot
9.9.3.Operating business segments
9.9.4.Product portfolio
9.9.5.Business performance
9.9.6.Key strategic moves and developments

9.10.Carrier Global Corporation

9.10.1.Company overview
9.10.2.Company snapshot
9.10.3.Operating business segments
9.10.4.Product portfolio
9.10.5.Business performance
9.10.6.Key strategic moves and developments

VRF (Variable Refrigerant Flow) functions at varying speeds that reduce energy load and saves approximately 55% of energy as compared to the traditional HVAC (Heating, Ventilation, and Air Conditioning) systems. The commercial air conditioning systems (VRF) includes an air conditioner inverter and as per comfort alters refrigerant flow and motor speed. These systems are popular commercially because they offer climate control by the building’s occupants. Moreover, the VRF systems can simultaneously alter temperatures in various rooms within a building. Also, VRF systems run automatically, and only the main control panel needs to set at an ideal room temperature. Minimal ductwork, delivery of constant comfort, and quiet operations are some of the benefits of using the VRF systems in a commercial building.

Forecast Analysis of the Commercial Air Conditioning Systems (VRF) Market

The global commercial air conditioning system (VRF) market is predicted to enhance in the upcoming years due to its energy-efficient nature. The conventional HVAC systems take up almost 50% of the total energy, thus burdening the consumer financially. As a result, people are shifting towards the VRF systems as they are energy efficient, easy to install, and quieter. Furthermore, awareness about energy efficiency is rising, and this has led to the adoption of VRF systems in countries such as Japan, the U.S.A, and China. For instance, an article on the economic times site stated that the 14th five-year-plan has been approved by the National People’s Congress, China. The nation has outlined climate and energy policies for the upcoming decade. China is set to work on plans for peaking carbon emissions before 2030 and achieve carbon neutrality by the end of 2060. Apart from this, an article stated that Japan observes ‘Energy conservation Day’ on the first day of every month and ‘Energy Conservation Month’ in February every year. These all factors are expected to boost the market growth in the forthcoming years.

According to a report published by Research Dive, the global commercial air conditioning system (VRF) market is anticipated to reach $34,619.00 million from 2020 to 2027 timeframe. Furthermore, several studies state that the performance of the VRF systems is more efficient than the conventional HVAC systems such as rooftop variable air volume systems (RTU-VAV) and boiler systems. For instance, an article on sciencedirect.com states that the VRF systems save approximately 15% to 42% and 18% to 33% for HVAC and source energy usage respectively as compared to the RTU-VAV systems. Apart from this, the VRF systems offer better cooling capacity in a multistorey building. These all factors are expected to influence the market growth in the future years.

Recent Developments in the Market

The well-known players of the global commercial air conditioning systems (VRF) market are aiming for unique strategies such as building product portfolios, mergers and acquisitions of promising companies, investments in research & development areas, new product announcements, and financing for the forthcoming activities and innovations. These tactics are propelling the growth of businesses across the world. For instance, in January 2021, Samsung, a multinational conglomerate company based in South Korea, announced the launch of large-capacity VRF air conditioning systems in India. This system can be installed in 0.5 square meters of space in villas, premium apartments, houses, and bungalows. This VRF system offers eco-friendly, efficient, and quiet air conditioning as well.

Apart from this, in January 2019, Trane, a manufacturing company of ventilation, heating, and air conditioning, introduced Genyue5+, a full DC inverter VRF system for SAARC and Indian markets. This product is an ideal choice for healthcare, retail, hospitality, educational facilities, and commercial sectors. Moreover, in July 2017, Mitsubishi India, an automotive company, introduced a new range of VRF (Variable Refrigerant Flow) air conditioning systems. The product's design is in-built for operation, smart control, and compactness of the system.

Covid-19 Impact on the Market

The global commercial air conditioning systems (VRF) market experienced a significant impact due to the Covid-19 pandemic. The reason being disruptions in the supply chains of the industries and social distancing protocols due to which installation services declined, thus resulting in reduced demand of the VRF systems. Furthermore, the implementation of safety protocols brought down the manpower in the industries, thus decreasing the production rate as well. These all aspects are affecting the global market during the coronavirus pandemic.

Future Scope of the Market

The demand for air conditioning systems is estimated to rise in countries such as India, UAE, Brazil, and Mexico due to an increase in disposable income and a rise in temperature levels. The desire for luxurious items by households is likely to create opportunities for the market in the upcoming years.              

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