Residential HVAC Market Size

Global Residential HVAC Market size was valued at USD 83.8 Billion in 2024 and is poised to grow from USD 89.6 Billion in 2025 to USD 144.53 Billion by 2032, growing at a CAGR of 6.9% in the forecast period (2025-2032).

The main driving force of the expansion of the global residential HVAC market is the increasing demand for comfortable living spaces indoors. In addition, increasing urbanization and technological advancement in energy-saving HVAC products are able to drive market expansion.

The Residential HVAC Market is expanding with the imposition of high energy efficiency and indoor air quality standards. These standards provide lower energy consumption and improved living standards, thereby making customers more confident. Increased research and development spending has also made it possible to use new and advanced equipment in residential HVAC. Combining various functions, such as heating, cooling, and air cleaning, in one unit is one of the technologies that have been implemented.

In addition to increasing comfort, the technology also conserves homeowners' energy costs as well as the environmental impact of their homes in the residential HVAC market. Homeowners are thus able to improve indoor air quality and system efficiency as well as optimize their home climate. Strong growth in the smart home market is one of the key drivers driving market growth. Smart HVAC equipment and thermostats are increasingly being integrated into new homes, offering convenient and automatic climate control to their residents.

Moreover, shifting customer preferences toward energy-efficient and intelligent home solutions propel the market. Consumers are spending more with increasing disposable incomes and the need for smart thermostats and smart connected HVAC systems growing. For example, Google acquired Nest Labs, a smart home firm with its learning thermostats, in January 2014. Nest technology is centered on energy efficiency and easy control of home climate systems.

How is Artificial Intelligence Transforming Comfort, Efficiency, and Air Quality in the Residential HVAC Market?

Artificial intelligence is also increasingly becoming a driving force in the residential heating, ventilation, and air conditioning industry, revolutionizing the heating, ventilation, and cooling of residential homes. AI-based solutions in the residential HVAC industry are revolutionizing the functioning of the systems, their maintenance, and energy consumption, offering solutions for increasing comfort, efficiency, and indoor air quality. AI-based smart thermostats also use advanced machine learning algorithms and sensors to adjust to environmental conditions and user behavior. They are able to foretell heating and cooling requirements, maximize energy efficiency, and provide consistent comfort with more precision.

In recent AI integration news for top-of-class residential HVAC performance, Google Nest in March 2025 revealed tighter integration with Sense, a home energy intelligence company employing AI-based sensor technology. Under the agreement, Sense's advanced energy monitoring technology will be integrated directly into future-generation Google Nest thermostats. With the marriage of Nest's advanced learning algorithms and massive user base and Sense's capacity to deliver appliance-level granular energy data, the partnership will offer homeowners total control over energy usage and HVAC system performance. The combined system will not only learn and adapt temperature settings as a function of occupancy and weather patterns but also offer proactive alert of potential HVAC system issues or inefficiencies identified through Sense's energy signature analysis.

How is Daikin India's New Manufacturing Facility in Sri City Strengthening its Position in the Indian Residential HVAC Market?

One of India's top air conditioner makers, Daikin India, significantly expanded capacity in December 2023 by opening its third large-capacity factory at Sri City, Andhra Pradesh. The new factory capacity is added to their already operational two facilities at Neemrana, Rajasthan. This Sri City facility capacity enables them to produce both domestic air conditioners as well as key components like compressors. With this strategic investment, Daikin India is able to produce nearly double its capacity to meet growing demand for air conditioner solutions across the Indian market. With the introduction of this integrated production facility, right from component procurement to assembly of finished products, Daikin aims to enhance production efficiency on a larger scale without compromising on any stringent quality tests. In the process, this step also ensures Daikin's supply chain, potentially opening the door for faster delivery times as well as enhanced customer satisfaction through guaranteed availability of goods.

This expansion is one of the cornerstones of Daikin's master plan to become a solid contender in India's fiercely competitive climate control market, consistent with the company's focus on local manufacturing, technology advancement, and responding to changing needs of Indian consumers. Daikin also said it will produce its products locally in its Indian facilities and ship them to the neighboring countries, attributing the increasing significance the country is assuming in their master plan.