Heating, ventilation, and air conditioning (HVAC) systems help in regulating the indoor and vehicular environmental comfort to provide thermal comfort and acceptable indoor air quality. However, in order to regulate the efficiency of these systems, control systems are needed. The HVAC controls industry is in the middle of a very interesting transition.

The HVAC controls market size is expected to be valued at USD 14.8 billion in 2020 and is projected to reach USD 24.4 billion by 2025; it is expected to grow at a CAGR of 10.5% from 2020 to 2025. The major factors driving the growth of the market include consolidating trend of smart homes, accelerated further by COVID-19 situation to boost HVAC controls market growth, boom in the construction sector, emergence of IoT-enabled HVAC systems, and the need to achieve energy efficiency in buildings. However, complexities in upgrading existing HVAC systems pose challenges for market growth.

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The market for temperature control system segment is expected to witness the highest CAGR from 2020 to 2025 within the global HVAC controls market. The temperature control system segment holds the largest share of the overall HVAC controls market, as the cost of temperature control systems is low. These systems also have a large number of applications. A ventilation control system controls the flow of fresh and stale air within an enclosed environment. The implementation of ventilation control systems is limited to buildings and houses where using a natural ventilation medium is not feasible. Owing to this, the growth rate of ventilation control systems is comparatively lower than other HVAC control systems.

The HVAC controls market for commercial application segment held the largest size of the HVAC controls market in 2019. The commercial applications of HVAC controls include shopping malls, educational institutions, and healthcare institutions. The rise of globalization and the increase in investments in developing profitable commercial infrastructure that includes building automation systems and controls have contributed to the growth of the HVAC controls market for commercial applications. The growing tourism industry in APAC and RoW has accelerated the growth of the commercial infrastructure, wherein HVAC controls are installed to ensure guest comfort. Moreover, growing investments by governments for the construction of commercial spaces is another crucial factor that will propel the growth of the HVAC controls market. The COVID-19 outbreak has impacted the supply chain of HVAC controls and the components such as sensors and controlled equipment, which has resulted in shipment delays in the US, Germany, and Australia. Due to these delays, manufacturers are not able to meet the deadlines for claiming tax credits. This current uncertainty about the ability to qualify for tax incentives is expected to have substantial negative impacts on the HVAC industry.

The HVAC controls market in APAC is expected to grow at the highest CAGR during the forecast period. APAC has been a major contributor to the growth of the overall HVAC controls market as this region has a huge market for the construction industry, which is the primary end user of HVAC controls. The growing population in developing countries in this region, along with environmental awareness, is supporting the adoption of HVAC controls. The rise in the adoption of green buildings and government initiatives to regulate energy-efficient practices across the commercial sector is also aiding the adoption of HVAC controls in this region. However, the APAC market is expected to see a dip owing to the halt of both ongoing as well as new infrastructure and construction projects due to COVID-19. Also, as the pandemic has also affected individual per capita income, the adoption of new HVAC systems in the residential segment has significantly decreased. However, this loss is expected to be recovered in the coming years with a gradual recovery of the country’s overall economy.