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Study Period | 2022 - 2030 |
Base Year For Estimation | 2024 |
Forecast Data Period | 2025 - 2030 |
Market Size (2025) | USD 28.97 Billion |
Market Size (2030) | USD 38.59 Billion |
CAGR (2025 - 2030) | 5.90 % |
Market Concentration | Low |
Major Players![]() *Disclaimer: Major Players sorted in no particular order |
North America Air Conditioning Equipment Market Analysis
The North America Air Conditioning Equipment Market size is estimated at USD 28.97 billion in 2025, and is expected to reach USD 38.59 billion by 2030, at a CAGR of 5.9% during the forecast period (2025-2030).
The North American air conditioning equipment industry is experiencing significant growth driven by robust construction activity across various sectors. According to recent data, construction spending reached an estimated annual rate of USD 2,099.0 billion in April 2024, marking a 10.0% increase from the previous year. The construction industry's momentum is further strengthened by substantial federal investments in infrastructure and increasing private commercial construction endeavors. This surge in construction activities, particularly in the development of energy-efficient buildings and sustainable infrastructure, is creating new opportunities for advanced cooling equipment solutions.
Climate change and rising temperatures are fundamentally reshaping the air conditioning equipment landscape in North America. The National Weather Service reported that in June 2024, approximately 27 million people were under heat warnings and advisories, with a heat dome trapping warm air from California to southern Texas. Cities like Phoenix are forecast to hit 113 degrees, Las Vegas may reach 112, and Death Valley, California, could see temperatures of 121 degrees amid the extreme heatwave. These escalating temperatures have transformed air conditioning from a luxury to a necessity, with the US Energy Information Administration reporting that 88% of US households now use air conditioning equipment.
The industry is witnessing a significant shift toward energy-efficient and sustainable cooling solutions, driven by stringent regulations and changing consumer preferences. According to the U.S. Energy Information Administration, US households consume approximately 10,500 kilowatt-hours of electricity annually, with cooling systems accounting for a substantial portion of this consumption. This has led to manufacturers focusing on developing products that meet and exceed the new minimum efficiency standards, particularly in light of the Environmental Protection Agency's upcoming regulations in January 2025 aimed at curbing greenhouse gas emissions from coolants.
Technological advancement and digital integration are revolutionizing the air conditioning equipment industry. The integration of IoT capabilities and smart air conditioning controls is becoming increasingly prevalent, as evidenced by recent industry developments. For instance, in February 2024, Panasonic launched its Matter-enabled room AC series, comprising 60 models across various capacities, all featuring universal mobile app compatibility. Similarly, the BMO Centre at Stampede Park, which opened in June 2024 as Western Canada's largest convention center with over one million square feet of space, has already secured more than 100 reservations for events through 2030, demonstrating the growing demand for advanced climate control equipment solutions in large-scale commercial facilities.
North America Air Conditioning Equipment Market Trends
Replace Existing Equipment with Better Performance Equipment and Reinstate Tax Credits for Air Conditioning Equipment
The push toward energy-efficient air conditioning equipment is being significantly driven by government regulations and tax incentives. Starting January 2025, the Environmental Protection Agency (EPA) will implement new regulations aimed at reducing greenhouse gas emissions from coolants, while the Department of Energy has established new minimum efficiency standards for residential central air conditioning systems. These standards require a Seasonal Energy Efficiency Ratio (SEER) of no less than 14 SEER for residential systems in the northern United States and 15 SEER in the southern United States. The U.S. government provides substantial tax credits for air conditioning equipment products purchased and installed between January 1, 2023, and December 31, 2032, with ENERGY STAR certified equipment with SEER2 ratings above 16 being eligible for these incentives. The overall total limit for an efficiency tax credit in one year is USD 3,200, which includes a total limit of USD 1,200 for any combination of home envelope improvements and central air conditioners.
Recent initiatives by state and local governments have further accelerated the replacement of existing HVAC equipment. For instance, in March 2023, the Department of Energy finalized new energy efficiency standards for room air conditioners and portable air cleaners, projected to save American families approximately USD 1.5 billion annually on electricity bills. The Buildings Energy Efficiency Frontiers and Innovation Technologies (BENEFIT) program has allocated USD 46 million to develop advanced building technologies and retrofit practices, addressing the high energy consumption in commercial and residential buildings, which account for approximately 40% of total energy usage in the U.S. Additionally, the Canada Infrastructure Bank (CIB) has invested over USD 1.2 billion in modernizing aging buildings nationwide, with nearly USD 50 million allocated in collaboration with Efficiency Capital to target opportunities for small to medium-sized building owners to upgrade their assets cost-effectively.
Growing Adoption of Home and Building Automation Systems
The integration of smart air conditioning technology in air conditioning systems has become a significant driver for market growth, with manufacturers increasingly focusing on developing connected and automated solutions. In February 2024, Panasonic unveiled its latest air conditioner series featuring Matter-enabled room ACs, which facilitates seamless interoperability across various brands via universal mobile apps. Similarly, Carrier introduced its latest Smart Thermostat in February 2024, enhancing homeowner connectivity at a more accessible price point while supporting accessories and integrating seamlessly with smart home systems. These innovations allow users to monitor AC energy consumption, set timers, adjust settings, and control their systems remotely through mobile applications, contributing to improved energy efficiency and user convenience.
The advancement in building automation systems has led to more sophisticated air conditioning solutions that optimize energy usage and enhance operational efficiency. In April 2024, Soracom Inc. partnered with Mitsubishi Electric Europe B.V. to integrate cellular connectivity into MELCloud, their cloud-based remote management system for air conditioning and heating products. This integration enables real-time monitoring and control of building systems, leading to improved energy management and reduced operational costs. Smart AC systems help optimize energy usage by learning user preferences and adjusting cooling schedules accordingly, while advanced features such as automated fault detection and predictive maintenance contribute to extended equipment life and reduced maintenance costs. The systems can monitor their performance and alert users to potential issues before they become major problems, ensuring optimal operation and energy efficiency throughout the equipment's lifecycle.
Segment Analysis: By Type
Unitary Air Conditioners Segment in North America Air Conditioning Equipment Market
The Unitary Air Conditioners segment dominates the North American air conditioning equipment market, commanding approximately 67% market share in 2024. This substantial market presence is attributed to the segment's comprehensive product portfolio, which includes duct-splitting systems, ductless mini-splits, and indoor packages and rooftops. The segment's dominance is further strengthened by the increasing adoption of energy-efficient cooling system solutions in both residential and commercial sectors. Unitary air conditioners are particularly popular due to their versatility in installation options, ability to provide consistent cooling across large spaces, and compatibility with smart home integration systems. The segment's growth is also driven by stringent energy efficiency regulations and the increasing focus on sustainable cooling solutions in the North American region.
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Variable Refrigerant Flow (VRF) Segment in North America Air Conditioning Equipment Market
The Variable Refrigerant Flow (VRF) segment is emerging as the fastest-growing segment in the North American air conditioning equipment market, projected to grow at approximately 11% CAGR from 2024 to 2029. This remarkable growth is driven by the increasing demand for energy-efficient HVAC systems that incorporate advanced controls and sensors. VRF systems are gaining popularity due to their ability to regulate indoor temperatures efficiently and create personalized micro-climate zones in different areas of a building. The segment's growth is further propelled by the rising awareness and urgency to address global warming, lower carbon emissions, and achieve net zero targets by 2050. Commercial building owners and managers are increasingly favoring VRF technology for its sustainability benefits, connected technology features, and ability to provide simultaneous heating and cooling services with accurate temperature control.
Remaining Segments in North America Air Conditioning Equipment Market by Type
The remaining segments in the market include Room Air Conditioners, Package Terminal Air Conditioners (PTAC), and Chillers, each serving distinct market needs. Room air conditioners are particularly popular in residential applications, offering cost-effective cooling solutions for individual spaces. The PTAC segment caters primarily to the hospitality sector and multi-unit residential buildings, providing self-contained units designed for through-the-wall installation. The Chillers segment serves large commercial and industrial applications, offering both air-cooled and water-cooled solutions for centralized cooling systems. These segments collectively contribute to the market's diversity by addressing specific cooling requirements across different end-user applications and building types.
Segment Analysis: By End User
Residential Segment in North America Air Conditioning Equipment Market
The residential segment dominates the North American air conditioning equipment market, commanding approximately 55% market share in 2024. This significant market presence is driven by several factors, including the increasing adoption of central air conditioning systems as the primary cooling method in North American homes, as reported by the Energy Information Administration (EIA). The segment's growth is further bolstered by rising temperatures across the region, which has transformed air conditioning from a luxury to a necessity in many states. The residential market is particularly strong due to the high number of immigrants requiring new homes, coupled with government initiatives to provide affordable housing. Air conditioning systems have become crucial for maintaining comfortable and healthy home environments, with their ability to efficiently circulate and filter air, removing pollutants and mold. This segment is experiencing robust growth at a rate of approximately 6% from 2024-2029, driven by factors such as the surge in upscale residential development projects, increasing urbanization, and rising disposable income of customers.
Commercial and Industrial Segment in North America Air Conditioning Equipment Market
The commercial and industrial segment plays a vital role in the North American air conditioning equipment market, serving various establishments including restaurants, hospitals, schools, hotels, and office buildings. These systems are typically larger and more complex than residential systems, consisting of various crucial components that work together to ensure optimal comfort, air quality, and energy efficiency in commercial environments. The segment's significance is underscored by its ability to enhance businesses' financial performance through energy efficiency and recycling initiatives, helping decrease resource usage and lessen environmental impact. In the manufacturing sector, air conditioning assumes even greater importance as it must cater to specific environmental requirements of each industry, ensuring that manufacturing and operational processes are conducted under optimal conditions.
Segment Analysis: By Efficiency
High Efficiency (>13 SEER) Segment in North America Air Conditioning Equipment Market
The high efficiency (>13 SEER) segment dominates the North American air conditioning equipment market, commanding approximately 83% market share in 2024 and demonstrating the strongest growth trajectory with a projected growth rate of around 7% during 2024-2029. This segment's prominence is driven by stringent energy efficiency regulations, particularly the Department of Energy's new minimum efficiency requirements for residential and commercial HVAC equipment implemented in 2023. The regulations mandate different SEER2 standards across regions, with the Southeast requiring higher efficiency ratings of 14.3 SEER2 for units below 4.5 tons and 13.8 SEER2 for larger units. The North and other regions maintain a minimum requirement of 13.4 SEER2, equivalent to 14 SEER under the previous standards. Consumer awareness about energy savings, environmental concerns, and the long-term cost benefits of high-efficiency systems has further accelerated the adoption of these advanced air conditioning units. Additionally, various tax incentives and rebates offered by federal and state governments for energy-efficient HVAC installations have made these systems more attractive to consumers despite their higher initial costs.
Low Efficiency (13 SEER) Segment in North America Air Conditioning Equipment Market
The low efficiency (13 SEER) segment continues to maintain a presence in the North American market, primarily driven by its lower initial cost advantage and specific regional applications where higher SEER ratings may not provide sufficient cost-benefit justification. These systems remain relevant in areas with moderate cooling requirements or shorter cooling seasons, where the premium cost of higher efficiency units might not be justified by the potential energy savings. The segment's persistence is also supported by replacement markets in regions where existing infrastructure and building specifications are designed around 13 SEER systems. Consumer budget constraints and the immediate cost considerations in certain commercial applications contribute to the continued demand for these systems. However, the segment's role is gradually diminishing as regulatory pressures and market preferences increasingly favor higher efficiency alternatives, particularly in new installations and regions with stringent energy codes.
North America Air Conditioning Equipment Market Geography Segment Analysis
North America Air Conditioning Equipment Market in the United States
The United States dominates the North American air conditioning equipment market, commanding approximately 92% of the total market value in 2024. The market's robustness is driven by multiple factors, including rapid urbanization, technological advancements, and the increasing frequency of extreme weather events. The rise in temperatures across American cities, particularly in the Sunbelt regions of southwestern and southern America, has led to greater adoption of various cooling systems. The Department of Energy's implementation of new minimum efficiency requirements for residential and commercial HVAC equipment in 2023 has significantly influenced market dynamics. The construction sector plays a crucial role in driving demand, with both commercial and residential building expansions creating a sustained need for air conditioning equipment. The market has also seen significant vendor developments, with companies introducing innovative product lines that emphasize energy efficiency, reliability, and sustainability.
North America Air Conditioning Equipment Market in Canada
Canada represents the fastest-growing market in the North American air conditioning equipment sector, projected to expand at a CAGR of approximately 8% from 2024 to 2029. The country is experiencing a surge in air conditioning demand driven by the rise in luxury residential infrastructure projects and increasing urbanization. The variable climate and severe winters have made central air conditioning essential in the majority of Canadian households. The market's growth is further supported by government initiatives, such as the BC government's program to provide free room air conditioning units to vulnerable populations. The commercial sector's expansion, particularly in office buildings and retail spaces, has created additional demand for ventilation equipment. The market is also witnessing significant investments in building renovations and upgrades, with a focus on enhancing energy efficiency and reducing operational costs. The increasing awareness of climate change impacts and the need for comfortable indoor environments during extreme weather events has further accelerated market growth.
North America Air Conditioning Equipment Market in Other Countries
The North American air conditioning equipment market primarily encompasses the United States and Canada, with these two nations representing the entirety of the market scope. The market dynamics in these countries are closely interlinked due to similar regulatory frameworks, technological adoption patterns, and climate change challenges. The integration of smart home technologies, emphasis on energy efficiency, and the growing adoption of sustainable industrial air conditioning solutions are common trends across the region. Both countries share similar distribution channels, including direct sales, retailers, and networks of wholesalers, dealers, and contractors. The market continues to evolve with an increasing focus on environmental regulations, energy efficiency standards, and the adoption of advanced technologies like variable refrigerant flow systems and smart controls.
North America Air Conditioning Equipment Industry Overview
Top Companies in North America Air Conditioning Equipment Market
The market is characterized by intense innovation and strategic developments from major players like Daikin, Carrier, Johnson Controls, Trane Technologies, and Lennox International. Companies are heavily investing in research and development to launch energy-efficient air conditioning equipment with smart connectivity features and environmentally friendly refrigerants. Operational agility is demonstrated through the expansion of manufacturing facilities and distribution networks, particularly evident in the growing focus on local production capabilities. Strategic moves include significant partnerships and licensing agreements to enhance technological capabilities and market reach, while companies are also emphasizing after-sales service networks. The industry is witnessing a strong push toward sustainability initiatives, with manufacturers developing products that comply with stringent environmental regulations while meeting evolving consumer preferences for energy-efficient solutions.
Consolidated Market with Strong Global Players
The North American air conditioning equipment market is dominated by well-established global conglomerates that possess extensive manufacturing capabilities and robust distribution networks. These major players have maintained their market positions through decades of operational excellence, strong brand recognition, and continuous technological innovation. The market structure shows a high level of consolidation, with the top companies controlling a significant portion of the market share through their diverse product portfolios and strong customer relationships. The presence of regional specialists is limited, though they maintain competitive advantages in specific market niches or geographical areas.
The market is experiencing ongoing consolidation through strategic mergers and acquisitions, as larger companies seek to expand their technological capabilities and geographical presence. Companies are actively pursuing acquisitions of smaller, specialized manufacturers to enhance their product offerings and gain access to new market segments. This trend is particularly evident in the acquisition of companies specializing in smart technologies and energy-efficient solutions. The consolidation trend is further driven by the need to achieve economies of scale and strengthen competitive positions in an increasingly demanding market environment.
Innovation and Sustainability Drive Future Success
For incumbent companies to maintain and increase their market share, focus on technological innovation and sustainability remains crucial. Market leaders are investing heavily in research and development to create more energy-efficient products and integrate smart technologies into their offerings. The development of comprehensive service solutions, including preventive maintenance and remote monitoring capabilities, has become increasingly important for maintaining customer relationships. Companies are also strengthening their distribution networks and expanding their presence in emerging market segments to protect their market positions.
New entrants and challenger brands must focus on developing specialized solutions and targeting underserved market segments to gain ground against established players. Success factors include the ability to offer innovative features, competitive pricing strategies, and superior customer service. The regulatory environment, particularly regarding energy efficiency standards and refrigerant regulations, continues to shape market dynamics and create opportunities for companies with advanced technological capabilities. End-user concentration in commercial and residential sectors necessitates strong relationships with contractors and installers, while the risk of substitution remains low due to the essential nature of HVAC equipment in modern buildings. Additionally, the integration of cooling equipment and ventilation equipment into comprehensive systems is increasingly important for meeting consumer demand.
North America Air Conditioning Equipment Market Leaders
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Daikin Industries Ltd
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Carrier Corporation
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Rheem Manufacturing Company
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Trane Inc. (Trane Technologies PLC)
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Johnson Controls International PLC
- *Disclaimer: Major Players sorted in no particular order
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North America Air Conditioning Equipment Market News
- March 2024: Riello, a Carrier brand, launched a high-end residential range with the new RIELLO ELIXATM series of single-split inverter air conditioners. The Riello Elixa wall-mounted air conditioners achieve energy class A+++ in cooling and heating, offering optimum user comfort and an environmentally friendly home environment.
- November 2023: Trane Technologies, a provider of indoor comfort solutions, unveiled its latest innovation: the Aries N air-to-water chillers. Representing a leap forward in chiller technology, the Trane Aries N is engineered with a focus on sustainability and boasts a natural refrigerant. This makes it a compelling choice, especially compared to older chillers relying on high GWP (global warming potential) HFCs or NH3.
North America Air Conditioning Equipment Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumption and Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
- 4.1 Market Overview
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4.2 Industry Attractiveness - Porter's Five Forces Analysis
- 4.2.1 Bargaining Power of Suppliers
- 4.2.2 Bargaining Power of Buyers
- 4.2.3 Threat of New Entrants
- 4.2.4 Threat of Substitute Products and Services
- 4.2.5 Intensity of Competitive Rivalry
- 4.3 Impact of COVID-19 Aftereffects and Other Macroeconomic Factors on the Market
- 4.4 Industry Value Chain Analysis
5. MARKET DYNAMICS
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5.1 Market Drivers
- 5.1.1 Replace Existing Equipment With Better Performance Equipment and Reinstate Tax Credits for Air Conditioning Equipment
- 5.1.2 Growing Adoption of Home and Building Automation Systems
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5.2 Market Restraint
- 5.2.1 Stringent Regulatory Compliance and Safety Standards
6. MARKET SEGMENTATION
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6.1 By Type
- 6.1.1 Unitary Air Conditioners
- 6.1.1.1 Ducted Splits
- 6.1.1.2 Ductless Mini-splits
- 6.1.1.3 Indoor Packaged and Roof Tops
- 6.1.2 Room Air Conditioners
- 6.1.3 Packaged Terminal Air Conditioners
- 6.1.4 Chillers
- 6.1.5 Variable Refrigerant Flow (VRF)
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6.2 By End User
- 6.2.1 Residential
- 6.2.2 Commercial and Industrial
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6.3 By Country
- 6.3.1 United States
- 6.3.2 Canada
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6.4 By Efficiency
- 6.4.1 Low Efficiency (13 SEER)
- 6.4.2 High Efficiency (>13 SEER)
7. COMPETITIVE LANDSCAPE
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7.1 Company Profiles
- 7.1.1 Daikin Industries Ltd
- 7.1.2 Carrier Corporation
- 7.1.3 Rheem Manufacturing Company
- 7.1.4 Trane Inc. (Trane Technologies PLC)
- 7.1.5 Johnson Controls International PLC
- 7.1.6 Mitsubishi Electric Corporation
- 7.1.7 Lennox International Inc.
- 7.1.8 Systemair AB
- 7.1.9 Robert Bosch GmbH
- 7.1.10 Electrolux AB
- 7.1.11 LG Electronics Inc.
- 7.1.12 Midea Group
- 7.1.13 Schneider Electric SE
- 7.1.14 GE Appliances
- 7.1.15 Whirlpool Corporation
- *List Not Exhaustive
8. ANALYSIS OF COOLING EQUIPMENT DISTRIBUTION CHANNEL CENTRAL AIR CONDITIONING, ROOM AIR CONDITIONING
- 8.1 Direct
- 8.2 Retailers
- 8.3 Wholesalers/Dealers/Contractors
9. INVESTMENT ANALYSIS
10. FUTURE OF THE MARKET
North America Air Conditioning Equipment Industry Segmentation
The market is defined by the revenue accrued through the sale of AC equipment by various players in North America.
The North American air conditioning equipment market is segmented by type (unitary air conditioners [duct splitting, ductless mini-split, and indoor packages and rooftops], room air conditioners, packaged terminal air conditioners, and chillers), end user (residential, commercial, and industrial), country (United States and Canada), and efficiency (low efficiency [13 SEER] and high efficiency [>13 SEER]). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.
By Type | Unitary Air Conditioners | Ducted Splits |
Ductless Mini-splits | ||
Indoor Packaged and Roof Tops | ||
Room Air Conditioners | ||
Packaged Terminal Air Conditioners | ||
Chillers | ||
Variable Refrigerant Flow (VRF) | ||
By End User | Residential | |
Commercial and Industrial | ||
By Country | United States | |
Canada | ||
By Efficiency | Low Efficiency (13 SEER) | |
High Efficiency (>13 SEER) |
North America Air Conditioning Equipment Market Research FAQs
How big is the North America Air Conditioning Equipment Market?
The North America Air Conditioning Equipment Market size is expected to reach USD 28.97 billion in 2025 and grow at a CAGR of 5.90% to reach USD 38.59 billion by 2030.
What is the current North America Air Conditioning Equipment Market size?
In 2025, the North America Air Conditioning Equipment Market size is expected to reach USD 28.97 billion.
Who are the key players in North America Air Conditioning Equipment Market?
Daikin Industries Ltd, Carrier Corporation, Rheem Manufacturing Company, Trane Inc. (Trane Technologies PLC) and Johnson Controls International PLC are the major companies operating in the North America Air Conditioning Equipment Market.
What years does this North America Air Conditioning Equipment Market cover, and what was the market size in 2024?
In 2024, the North America Air Conditioning Equipment Market size was estimated at USD 27.26 billion. The report covers the North America Air Conditioning Equipment Market historical market size for years: 2022, 2023 and 2024. The report also forecasts the North America Air Conditioning Equipment Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
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North America Air Conditioning Equipment Market Research
Mordor Intelligence provides a comprehensive analysis of the air conditioning equipment industry. With decades of expertise in HVAC equipment research and consulting, we offer an extensive report that examines the full range of solutions. These solutions include everything from portable air conditioning units to sophisticated central air conditioning systems. Our analysis covers the commercial air conditioning, residential air conditioning, and industrial air conditioning segments. It provides detailed insights into cooling system technologies, such as split air conditioning configurations and advanced air cooling system solutions.
Stakeholders will gain valuable insights into emerging trends, including smart air conditioning technologies and innovative air purification equipment. The report addresses crucial aspects of ventilation equipment, air handling equipment, and temperature control equipment. It also covers developments in air treatment equipment and climate control equipment. Our analysis of heating ventilation and air conditioning systems offers actionable intelligence for decision-makers across the value chain. The comprehensive report PDF is available for download, featuring a detailed examination of refrigeration equipment trends and technological advancements in room air conditioning solutions.