Market Trends of France HVAC Industry
Residential Sector to Witness a Significant Growth
- The growth of the market can be attributed to factors like a strong preference for electric heating systems over gas, a domestic air conditioning industry that has transitioned to heat pumps, and the implementation of government initiatives to promote heat pump installation, including grant schemes like FranceRenov which provides up to EUR 10,000 (USD 10,884.45) per household. New energy-efficiency standards for new homes have also played a role in France's achievements. Moreover, the rise in residential construction in France is expected to drive the market.
- For instance, in September 2023, France spearheaded a push to transition from traditional residential fuel and gas heaters to heat pumps, aiming to establish a domestic industry for these devices. This initiative forms a pivotal part of France's comprehensive, multi-year environmental strategy. The country is looking to retire its last few coal-fired power plants, actively advocating for a shift from thermal engines to electric vehicles and promoting heat pumps as the primary heating solution for households.
- The desire to lower carbon footprints and the rising awareness of environmental concerns lead homeowners to invest in eco-friendly HVAC systems, energy-efficient and renewable energy-based HVAC solutions, such as heat pumps and solar-powered systems, which are becoming more popular in the country. According to Insee, more residential buildings were constructed in terms of floor space in France during the first 10 months of 2023 than non-residential buildings.
- The country's residential HVAC sector has seen a consistent uptick in demand for energy-efficient heating and cooling systems. This growth is primarily propelled by escalating energy costs and government incentives that encourage energy-efficient home upgrades. For instance, in April 2024, the French government officially allocated nearly EUR 1 billion (USD 1.09 billion) to fund the development of 75,000 intermediate housing units. This initiative is part of a broader strategy to address the pressing need for 500,000 more homes nationwide in the coming three years.
Understand The Key Trends Shaping This Market
Download PDF
HVAC Equipment is Expected to Hold Significant Market Share
- France has stringent energy efficiency regulations and environmental standards for buildings, which drive the demand for HVAC equipment. Building operators and owners must comply with these regulations by implementing energy-efficient heating and cooling systems, ventilation solutions, and air quality management technologies. The need to meet regulatory requirements and achieve energy performance targets creates a significant demand for HVAC equipment focused on energy efficiency upgrades, retrofits, and compliance assessment.
- For instance, by 2027, France targets an annual production of one million new heat pumps within its borders. To bolster demand, the government plans to streamline the regulatory and administrative procedures for installing heat pumps on roofs, aligning with its broader agenda of reducing bureaucratic hurdles. Continuing initiatives like MaPrimeRenov and energy-saving certificates will aid consumers in purchasing heat pumps.
- In September 2023, the French government announced plans to increase subsidies for heat pumps. This move is intended to ensure that the net cost of purchasing a heat pump aligns with that of a gas heater, particularly for low-income families. Additionally, the government is actively working toward bolstering the domestic heat pump industry, with a target capacity set at manufacturing up to 1 million units annually.
- For instance, the EHPA's subsidies for residential heat pumps in Europe report, based on data from early 2023, highlights that property owners are eligible for grants in France. When installed in existing properties, these grants can reach up to EUR 15,000 (USD 16326.67) for ground-source heat pumps and up to EUR 9,000 (USD 9796.00) for air-source heat pumps. The production of many heat pumps stimulates demand for HVAC equipment across multiple industry segments.
