HEATING, VENTILATION AND AIR CONDITIONING: GLOBAL MARKETS IAS084A October 2014 Patrick Levy Project Analyst ISBN: 1-565-951-6 BCC Research 49 Walnut Park, Building 2 Wellesley, MA 02481 USA 866-285-7215 (toll-free within the USA), or (+1) 781-489-7301 www.bccresearch.com information@bccresearch.com
TABLE OF CONTENTS CHAPTER 1 INTRODUCTION 2 STUDY GOALS AND OBJECTIVES 3 INTENDED AUDIENCE 3 SCOPE OF REPORT 4 ENABLING TECHNOLOGIES 4 METHODOLOGY 4 ANALYST'S CREDENTIALS 5 RELATED BCC RESEARCH REPORTS 5 BCC RESEARCH WEBSITE 5 DISCLAIMER 6 CHAPTER 2 SUMMARY 8 SUMMARY TABLE GLOBAL COMMERCIAL AND RESIDENTIAL HVAC MARKET BY REGION, SUMMARY FIGURE GLOBAL COMMERCIAL AND RESIDENTIAL HVAC MARKET BY REGION, 2013-2019 ($ BILLIONS) EXECUTIVE SUMMARY 9 8 8 CHAPTER 3 OVERVIEW 13 MARKET BACKGROUND 13 ENVIRONMENTAL CONCERNS 13 HIGH PRESSURE FROM REGULATORY 14 MARKET TRANSFORMATION 15 CHAPTER 4 HVAC TECHNOLOGY 17 HVAC FUNCTION 17 HVAC ARCHITECTURE 18 FIGURE 1 A PACKAGED SYSTEM INCLUDES ALL THE FUNCTIONS IN ONE UNIT 18 FIGURE 2 IN A SPLIT SYSTEM, FUNCTIONS ARE LOCATED IN SEPARATED UNITS 18 CHAPTER 5 MARKET OVERVIEW 22 STATE OF THE MARKET 22 THE HVAC INDUSTRY VALUE CHAIN 23 FIGURE 3 HVAC INDUSTRY VALUE CHAIN 23 KEY VALUE CHAIN PARTICIPANTS AND THEIR INTERACTIONS 24 INDUSTRY SPECIFICS 24 COMMERCIAL AND RESIDENTIAL HVAC FIVE FORCES 24 FIGURE 4 COMMERCIAL AND RESIDENTIAL HVAC INDUSTRY FIVE FORCES 25 EQUIPMENT MANUFACTURERS AND SUPPLIERS 26 ARCHITECTURE, ENGINEERING, AND CONSTRUCTION SERVICE PROVIDERS (AECS) ENERGY SERVICE COMPANIES (ESCOS) 27 GOVERNMENT (LOCAL AND NATIONAL) 28 UTILITY LANDSCAPE 30 UTILITY SEGMENTATION 30 FINANCIAL INSTITUTIONS 31 26
FIGURE 5 TWO MODELS FOR THE FINANCING OF ENERGY EFFICIENCY 32 STANDARDIZATION ORGANIZATIONS AND TRADE GROUPS 33 APPLICATION SEGMENTATION 35 New Construction and Full Replacements 35 Retrofitting 35 END USERS 36 Public Institutions 36 Private Institutions 37 Commercial/Private Sector 37 RECENT MARKET TRENDS 37 TABLE 1 GLOBAL MERGERS AND ACQUISITIONS TREND WITH AEC'S, 2000-2011 (NUMBER) FIGURE 6 GLOBAL MERGERS AND ACQUISITIONS TREND WITH AEC S, 2000-2011 (NUMBER) HVAC MARKET LEVERS 39 COSTUMERS' INTEREST FOR ROI 39 ENERGY CONSERVATION AND SAVING 40 FIGURE 7 SHARES OF ENERGY USED IN THE UNITED STATES IN 2012 (%) 41 BUILDING CONSTRUCTION AND HVAC REPLACEMENT CYCLES 42 38 38 CHAPTER 6 REGIONAL ANALYSIS 45 INTRODUCTION 45 TABLE 2 GLOBAL COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST, FIGURE 8 GLOBAL COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST, 2013-2019 ($ BILLIONS) THE EMERGENCE OF A GLOBAL MIDDLECLASS 46 TABLE 3 NUMBER OF MIDDLE-CLASS HOUSEHOLDS, THROUGH 2019 (MILLIONS) 47 FIGURE 9 NUMBER OF MIDDLE-CLASS HOUSEHOLDS, 2013-2019 (MILLIONS) 47 TABLE 4 TOTAL U.S. NONRESIDENTIAL STARTS, 2008-2017 (THOUSAND UNITS) 49 NORTH AMERICA 50 LATIN AMERICA 51 EUROPE 51 ASIA-PACIFIC 53 CHINA 53 INDIA 54 JAPAN 54 REST OF ASIA-PACIFIC 56 MIDDLE EAST AND AFRICA 56 45 46 CHAPTER 7 ENVIRONMENTAL ISSUES 58 GLOBAL WARMING 58 HVAC EXPANSION AND ENERGY CONSUMPTION 59 TABLE 5 CHANGES IN GAS EMISSIONS IN THE TOP EMERGING ECONOMIES, 1990-2012 (MILLION TONS) FIGURE 10 COMPARISON OF ENERGY CONSUMPTION BETWEEN THE U.S., CHINA AND INDIA BETWEEN 1990 AND 2040* (QUADRILLION BTU) FIGURE 11 SWITCH IN ENERGY CONSUMPTION BETWEEN DEVELOPED ECONOMIES AND EMERGING ECONOMIES, 1990-2040* (QUADRILLION BTU) 60 60 61
OZONE LAYER PROTECTION 62 CHAPTER 8 TECHNOLOGY ISSUES 65 ENERGY EFFICIENCY ISSUES 65 COMMERCIAL AND RESIDENTIAL HVAC ENERGY EFFICIENCY DEFINITION 65 HOW COMMERCIAL AND RESIDENTIAL HVAC SYSTEMS ARE MADE MORE ENERGY EFFICIENT BUILDING DESIGN, INTEGRATION, AND COMMISSIONING 67 COMMERCIAL AND RESIDENTIAL HVAC AND THE INTERNET OF THINGS 69 THE CHALLENGE OF THE INTERNET OF THINGS 69 HOW VENDORS ARE EMBEDDING THE INTERNET OF THINGS 69 FUTURE TECHNOLOGY DEVELOPMENTS 70 COOLING TECHNOLOGY DEVELOPMENTS 70 HEATING TECHNOLOGY DEVELOPMENTS 71 HOME AUTOMATION TECHNOLOGY DEVELOPMENTS 71 NEW RESEARCH AND DEVELOPMENT PROGRAMS 71 TECHNOLOGY DRIVERS, REGULATION AND MARKET STRATEGY 72 MARKET EVOLUTION OF COMMERCIAL AND RESIDENTIAL HVAC TECHNOLOGIES 73 TABLE 6 COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST BY TECHNOLOGY, FIGURE 12 COMMERCIAL AND RESIDENTIAL HVAC SYSTEMS MARKET FORECAST BY TECHNOLOGY, 2013-2019 ($ BILLIONS) HEAT PUMPS 75 FIGURE 13 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL HEAT PUMP FURNACES AND BOILERS 77 FIGURE 14 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL FURNACE AND BOILER UNITARY SYSTEMS 78 FIGURE 15 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL UNITARY SYSTEMS DUCTLESS COOLING SYSTEMS 79 FIGURE 16 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL DUCTLESS ENGINEERED COOLING SYSTEMS 80 FIGURE 17 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL ENGINEERED COOLING SYSTEMS RADIANT HEATING AND COOLING SYSTEMS 81 FIGURE 18 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL RADIANT HEATING AND COOLING SYSTEMS VENTILATION SYSTEMS 82 FIGURE 19 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL VENTILATION SYSTEMS VRF (VARIABLE REFRIGERANT FLOW) 84 FIGURE 20 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL VRF (VARIABLE REFRIGERATION FLOW) DISTRICT HEATING AND COOLING 85 FIGURE 21 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL DISTRICT HEATING AND COOLING 66 74 75 76 77 78 79 80 81 83 84 85
CHAPTER 9 MARKET FORECASTS 88 MARKET FORECAST ASSUMPTIONS 88 GLOBAL FORECAST BY REGION 88 TABLE 7 THE FAST DEVELOPMENT OF THE GLOBAL MIDDLE CLASS BY REGION, 2009-2030 (MILLIONS OF HOUSEHOLDS) TABLE 8 AVERAGE NUMBER OF INDIVIDUALS PER HOUSEHOLD, 2013-2019 90 TABLE 9 NUMBER OF RESIDENTIAL AND COMMERCIAL HVAC UNITS INSTALLED PER REGION, 2013-2019 (MILLIONS) FIGURE 22 NUMBER OF RESIDENTIAL AND COMMERCIAL HVAC UNITS INSTALLED PER REGION, 2013-2019 (MILLIONS) TABLE 10 FORECAST BY REGION FOR COMMERCIAL AND RESIDENTIAL HVAC SYSTEMS, NORTH AMERICA 93 TABLE 11 RESIDENTIAL AND COMMERCIAL HVAC NORTH AMERICAN MARKET FIGURE 23 RESIDENTIAL AND COMMERCIAL HVAC NORTH AMERICAN MARKET FORECAST, 2013-2019 ($ BILLIONS) TABLE 12 NORTH AMERICAN COMMERCIAL AND RESIDENTIAL HVAC MARKET LEADERS IN 2013 ($ BILLIONS) LATIN AMERICA 95 TABLE 13 LATIN AMERICA COMMERCIAL AND RESIDENTIAL HVAC MARKET, FIGURE 24 LATIN AMERICAN COMMERCIAL AND RESIDENTIAL HVAC MARKET, 2013-2019 ($ BILLIONS) TABLE 14 LATIN AMERICA COMMERCIAL AND RESIDENTIAL HVAC MARKET LEADERS IN 2013 ($ BILLIONS) WESTERN EUROPE 97 TABLE 15 WESTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET TABLE 16 WESTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST BY COUNTRY, FIGURE 25 WESTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST BY COUNTRY, 2013-2019 ($ BILLIONS) TABLE 17 LEADING VENDORS ON THE WESTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET IN 2013 ($ BILLIONS) EASTERN EUROPE 99 TABLE 18 EASTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET FIGURE 26 EASTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST, 2013-2019 ($ BILLIONS) TABLE 19 LEADING VENDORS IN THE EASTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET IN 2013 ($ BILLIONS) ASIA-PACIFIC 101 TABLE 20 FORECAST FOR THE ASIA-PACIFICCOMMERCIAL AND RESIDENTIAL HVAC MARKET, FIGURE 27 FORECAST FOR THE ASIA-PACIFICCOMMERCIAL AND RESIDENTIAL HVAC TABLE 21 LEADING VENDORS ON THE APAC COMMERCIAL AND RESIDENTIAL HVAC MARKET IN 2013 ($ BILLIONS) MENA 103 89 91 91 92 93 94 95 97 98 98 99 100 100 101 101 102 103
TABLE 22 FORECAST FOR THE MENA COMMERCIAL AND RESIDENTIAL HVAC MARKET, FIGURE 28 FORECAST FOR THE MENA COMMERCIAL AND RESIDENTIAL HVAC TABLE 23 LEADING VENDORS ON THE MENA COMMERCIAL AND RESIDENTIAL HVAC MARKET IN 2013 ($ BILLIONS) CHAPTER 10 KEY INDUSTRY PLAYERS 107 INCUMBENTS AND NEW ENTRANTS 107 TABLE 24 RANKING OF TOP INDUSTRY VENDORS BY REVENUE AND MARKET SHARE, 2013 ($ BILLIONS) MARKET LEADERS 108 AAON INC. 108 CARRIER CORP. (UTC) 109 DAIKIN INDUSTRIES 111 DANFOSS GROUP 112 JOHNSON CONTROLS INC. 113 LG ELECTRONICS 114 LENNOX INTERNATIONAL 115 MIDEA GROUP 116 MITSUBISHI ELECTRIC CORP. 117 NORTEK INCORPORATED 118 SAMSUNG ELECTRONICS 119 TOSHIBA CORP. 119 TRANE (INGERSOLL-RAND) 120 UPONOR CORP. 121 NEW ENTRANTS FROM EMERGING ECONOMIES 121 CHUNLAN GROUP 122 GREE ELECTRIC 122 HAIER GROUP 123 VOLTAS LTD. 123 107 CHAPTER 11 APPENDIX 1: ACRONYMS 126 CHAPTER 12 APPENDIX 2: ABBREVIATION LIST 128 CHAPTER 13 APPENDIX 3: HVACR ASSOCIATIONS AND PROFESSIONAL SOCIETIES 130 CHAPTER 14 APPENDIX 4: STANDARDS ORGANIZATIONS 134
LIST OF TABLES TABLE HEADING SUMMARY TABLE GLOBAL COMMERCIAL AND RESIDENTIAL HVAC MARKET BY REGION, TABLE 1 GLOBAL MERGERS AND ACQUISITIONS TREND WITH AEC'S, 2000-2011 (NUMBER) TABLE 2 GLOBAL COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST, TABLE 3 NUMBER OF MIDDLE-CLASS HOUSEHOLDS, THROUGH 2019 (MILLIONS) 47 TABLE 4 TOTAL U.S. NONRESIDENTIAL STARTS, 2008-2017 (THOUSAND UNITS) 49 TABLE 5 CHANGES IN GAS EMISSIONS IN THE TOP EMERGING ECONOMIES, 1990-2012 (MILLION TONS) TABLE 6 COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST BY TECHNOLOGY, TABLE 7 THE FAST DEVELOPMENT OF THE GLOBAL MIDDLE CLASS BY REGION, 2009-2030 (MILLIONS OF HOUSEHOLDS) TABLE 8 AVERAGE NUMBER OF INDIVIDUALS PER HOUSEHOLD, 2013-2019 90 TABLE 9 NUMBER OF RESIDENTIAL AND COMMERCIAL HVAC UNITS INSTALLED PER REGION, 2013-2019 (MILLIONS) TABLE 10 FORECAST BY REGION FOR COMMERCIAL AND RESIDENTIAL HVAC SYSTEMS, TABLE 11 RESIDENTIAL AND COMMERCIAL HVAC NORTH AMERICAN MARKET TABLE 12 NORTH AMERICAN COMMERCIAL AND RESIDENTIAL HVAC MARKET LEADERS IN 2013 ($ BILLIONS) TABLE 13 LATIN AMERICA COMMERCIAL AND RESIDENTIAL HVAC MARKET, TABLE 14 LATIN AMERICA COMMERCIAL AND RESIDENTIAL HVAC MARKET LEADERS IN 2013 ($ BILLIONS) TABLE 15 WESTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET TABLE 16 WESTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST BY COUNTRY, TABLE 17 LEADING VENDORS ON THE WESTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET IN 2013 ($ BILLIONS) TABLE 18 EASTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET TABLE 19 LEADING VENDORS IN THE EASTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET IN 2013 ($ BILLIONS) TABLE 20 FORECAST FOR THE ASIA-PACIFICCOMMERCIAL AND RESIDENTIAL HVAC MARKET, TABLE 21 LEADING VENDORS ON THE APAC COMMERCIAL AND RESIDENTIAL HVAC MARKET IN 2013 ($ BILLIONS) TABLE 22 FORECAST FOR THE MENA COMMERCIAL AND RESIDENTIAL HVAC MARKET, TABLE 23 LEADING VENDORS ON THE MENA COMMERCIAL AND RESIDENTIAL HVAC MARKET IN 2013 ($ BILLIONS) TABLE 24 RANKING OF TOP INDUSTRY VENDORS BY REVENUE AND MARKET SHARE, 2013 ($ BILLIONS) 8 38 45 60 74 89 91 92 93 95 97 98 99 100 101 101 103 107
LIST OF FIGURES FIGURE TITLE SUMMARY FIGURE GLOBAL COMMERCIAL AND RESIDENTIAL HVAC MARKET BY REGION, 2013-2019 ($ BILLIONS) FIGURE 1 A PACKAGED SYSTEM INCLUDES ALL THE FUNCTIONS IN ONE UNIT 18 FIGURE 2 IN A SPLIT SYSTEM, FUNCTIONS ARE LOCATED IN SEPARATED UNITS 18 FIGURE 3 HVAC INDUSTRY VALUE CHAIN 23 FIGURE 4 COMMERCIAL AND RESIDENTIAL HVAC INDUSTRY FIVE FORCES 25 FIGURE 5 TWO MODELS FOR THE FINANCING OF ENERGY EFFICIENCY 32 FIGURE 6 GLOBAL MERGERS AND ACQUISITIONS TREND WITH AEC S, 2000-2011 (NUMBER) FIGURE 7 SHARES OF ENERGY USED IN THE UNITED STATES IN 2012 (%) 41 FIGURE 8 GLOBAL COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST, 2013-2019 ($ BILLIONS) FIGURE 9 NUMBER OF MIDDLE-CLASS HOUSEHOLDS, 2013-2019 (MILLIONS) 47 FIGURE 10 COMPARISON OF ENERGY CONSUMPTION BETWEEN THE U.S., CHINA AND INDIA BETWEEN 1990 AND 2040* (QUADRILLION BTU) FIGURE 11 SWITCH IN ENERGY CONSUMPTION BETWEEN DEVELOPED ECONOMIES AND EMERGING ECONOMIES, 1990-2040* (QUADRILLION BTU) FIGURE 12 COMMERCIAL AND RESIDENTIAL HVAC SYSTEMS MARKET FORECAST BY TECHNOLOGY, 2013-2019 ($ BILLIONS) FIGURE 13 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL HEAT PUMP FIGURE 14 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL FURNACE AND BOILER FIGURE 15 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL UNITARY SYSTEMS FIGURE 16 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL DUCTLESS FIGURE 17 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL ENGINEERED COOLING SYSTEMS FIGURE 18 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL RADIANT HEATING AND COOLING SYSTEMS FIGURE 19 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL VENTILATION SYSTEMS FIGURE 20 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL VRF (VARIABLE REFRIGERATION FLOW) FIGURE 21 EVOLUTION OF THE GLOBAL COMMERCIAL AND RESIDENTIAL DISTRICT HEATING AND COOLING FIGURE 22 NUMBER OF RESIDENTIAL AND COMMERCIAL HVAC UNITS INSTALLED PER REGION, 2013-2019 (MILLIONS) FIGURE 23 RESIDENTIAL AND COMMERCIAL HVAC NORTH AMERICAN MARKET FORECAST, 2013-2019 ($ BILLIONS) FIGURE 24 LATIN AMERICAN COMMERCIAL AND RESIDENTIAL HVAC MARKET, 2013-2019 ($ BILLIONS) FIGURE 25 WESTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST BY COUNTRY, 2013-2019 ($ BILLIONS) FIGURE 26 EASTERN EUROPE COMMERCIAL AND RESIDENTIAL HVAC MARKET FORECAST, 2013-2019 ($ BILLIONS) FIGURE 27 FORECAST FOR THE ASIA-PACIFICCOMMERCIAL AND RESIDENTIAL HVAC FIGURE 28 FORECAST FOR THE MENA COMMERCIAL AND RESIDENTIAL HVAC 8 38 46 60 61 75 76 77 78 79 80 81 83 84 85 91 94 98 100 102