Water-based Heating & Cooling Systems Market Size & Share

Updated on : October 22, 2024

Water-based Heating & Cooling Systems Market Size & Share

The global water-based heating & cooling systems market size is expected to be valued at USD 37.7 billion in 2023 and is projected to reach USD 55.2 billion by 2028; growing at a CAGR of 7.9% from 2023 to 2028. The water-based heating & cooling systems industry has experienced remarkable growth in recent years, driven by increasing demand for energy-efficient solutions, availability of government subsidies, and growing awareness of the environmental benefits. North America is expected to be the largest market for water-based heating and cooling systems in 2023. This is due to the high awareness of the benefits of these systems among building owners and policymakers in the region. Asia Pacific is the second-largest market for water-based heating and cooling systems and is expected to be the fastest-growing market for these systems. This is due to the rapid growth of the construction industry in the region.

Water-based Heating & Cooling Systems Market Statistics Forecast to 2028

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Water-based heating & cooling systems market key trends & dynamics

Driver: Increasing constructions activities in residential and industry sectors

The construction sector is a major driving factor behind the growth of the water-based heating and cooling industry. As construction projects continue to surge, there is a growing emphasis on energy-efficient and sustainable solutions. Water-based heating and cooling systems, such as hydronic systems, offer significant advantages in terms of energy efficiency, cost-effectiveness, and environmental friendliness. These systems utilize water as a medium to transfer heat, providing efficient heating during winters and cooling during summers. With a focus on reducing carbon emissions and achieving energy savings, developers, contractors, and building owners are increasingly adopting water-based heating and cooling systems in their projects. These systems not only offer better control over temperature and humidity but also provide opportunities for renewable energy integration, such as utilizing geothermal or solar energy sources.

The residential sector has been increasingly adopting water-based heating and cooling systems as a sustainable and energy-efficient solution for climate control. Homeowners are recognizing the benefits of these systems in terms of comfort, cost savings, and environmental impact. In the industrial sector, the demand for water-based heating and cooling systems is driven by the construction of new factories, warehouses, and commercial buildings. These buildings require water-based heating and cooling systems to maintain the temperature, and humidity levels, which are essential for the efficient functioning of machinery and equipment. Moreover, water-based heating and cooling systems can also help in reducing the energy consumption of industrial buildings, which is a major concern for the industry.

Restraint: Limited space in commercial and residential buildings for large water-based heating & cooling systems

One of the significant restraints faced by water-based heating & cooling systems is the limited space available in commercial and residential buildings for large water-based heating & cooling systems. In today’s world, people have started to opt for compact and space-saving products, including water-based heating & cooling systems, that can fit in small areas without compromising on their performance. However, this can be challenging for water-based heating & cooling manufacturers and installers, especially in densely populated urban areas where space is at a premium. Due to limited space, water-based heating & cooling systems may need to be smaller, which can affect their efficiency and performance, leading to higher energy consumption and maintenance costs.   

Opportunity: Growing demand for sustainable solutions

One significant opportunity for water-based heating & cooling systems is the increasing demand for sustainable solutions. In recent years, there has been a growing awareness of environmental issues such as climate change, resource depletion, and pollution. This awareness has translated into a shift in consumer preferences towards more sustainable and eco-friendly products and services.

Water-based heating & cooling systems align well with this shift in consumer demand. These systems offer several environmental benefits compared to traditional heating and cooling methods. By utilizing water as a primary heat transfer medium, they can significantly reduce greenhouse gas emissions and contribute to a smaller carbon footprint. Water is a renewable resource, and when coupled with renewable energy sources such as solar thermal, or geothermal, water-based systems can achieve even higher levels of sustainability.

Challenge: Increase in environmental concerns and aging infrastructure

The increasing global environmental concerns, particularly related to climate change and carbon emissions, have highlighted the need for more sustainable heating and cooling solutions. Traditional heating and cooling systems often rely on fossil fuel-based energy sources, such as natural gas or oil, which contribute to greenhouse gas emissions. Additionally, older systems may use refrigerants with high global warming potential (GWP), further exacerbating their environmental impact. Many existing water-based heating & cooling systems suffer from aging infrastructure and outdated equipment. These systems may have been installed several decades ago, and over time, components such as pipes, valves, pumps, and heat exchangers can deteriorate, leading to inefficiencies, leaks, and system failures. Aging infrastructure can result in reduced system performance, increased energy consumption, and higher maintenance costs.

Water-Based Heating & Cooling Systems Market Ecosystem

The water-based heating & cooling systems market is dominated by established and financially sound manufacturers with extensive experience in the industry. These companies have diversified product portfolios, cutting-edge technologies, and strong global sales and marketing networks. Leading players in the market include Anritsu, Keysight Technologies, Teradyne Inc., National Instruments Corporation, and Spirent Communications.

Based on heating component, the heat pump market to hold the highest market share during the forecast period

The heat pump market is poised to gain the highest market share for water-based heating systems due to several key factors. Firstly, heat pumps are highly efficient and environmentally friendly compared to traditional heating systems. They utilize renewable energy sources such as air, water, or the ground to extract heat and transfer it indoors, resulting in significantly lower energy consumption and reduced greenhouse gas emissions. This aligns with the increasing global focus on sustainability and the urgent need to mitigate climate change. Secondly, heat pumps offer versatility and flexibility in their applications. They can provide both heating and cooling functions, making them suitable for various climates and seasons. Additionally, heat pumps can be integrated with existing infrastructure, such as underfloor heating systems, radiators, or water heaters, making them a viable retrofit option for both residential and commercial buildings. Finally, governments and regulatory bodies worldwide are implementing supportive policies and providing financial incentives to promote the adoption of heat pumps. These initiatives, coupled with advancements in technology and decreasing installation costs, make heat pumps an attractive choice for consumers and drive the growth of the market.

Based on cooling component, the chillers market is to grow at the highest CAGR share during the forecast period

Chillers play a pivotal role in water-based cooling systems and offer a range of significant benefits. They chillers provide efficient and reliable cooling for large-scale applications such as commercial buildings, data centers, hospitals, and industrial facilities. Additionally, chillers offer precise temperature control, allowing for customization based on specific cooling requirements. They can adapt to varying loads and ambient conditions, providing stable cooling even during peak demand. Furthermore, chillers offer energy efficiency through advanced technologies such as variable speed compressors, heat recovery, and intelligent controls. These features optimize energy usage, reduce electricity consumption, and lower operational costs. Lastly, chillers can be integrated with renewable energy sources, such as solar or geothermal, further enhancing their sustainability and reducing environmental impact. Considering their ability to provide reliable cooling, precise temperature control, energy efficiency, and compatibility with renewable energy, chillers stand as the most important component in water-based cooling systems, driving comfort, productivity, and sustainability in various applications.

Based on implementation type, the market for new constructions to hold the highest market share during the forecast period

The market for water-based heating & cooling systems in new construction projects is experiencing significant growth and is expected to continue expanding in the coming years. There is a growing awareness and emphasis on energy efficiency and sustainability in the construction industry. Water-based systems, such as hydronic heating and cooling, offer superior energy efficiency compared to traditional HVAC systems, resulting in reduced operating costs and environmental impact. Secondly, advancements in technology have made water-based systems more versatile, reliable, and easier to install. The availability of high-performance heat pumps, chillers, and radiant heating/cooling systems has expanded the range of options for designers and developers, allowing for tailored solutions to meet specific project requirements. Additionally, government regulations and initiatives aimed at reducing carbon emissions and promoting sustainable practices have provided incentives and mandates for the adoption of energy-efficient systems in new construction. These policies have accelerated the demand for water-based heating and cooling solutions thereby driving the market for new construction projects.

Commercial vertical for the water-based heating & cooling systems market to grow at the highest CAGR from 2023 to 2028

Commercial buildings, including office complexes, retail spaces, hotels, and healthcare facilities, require efficient and effective heating and cooling solutions to create comfortable environments for occupants. Water-based systems, such as hydronic heating and cooling, offer superior performance, precise temperature control, and uniform distribution of heat or cool air throughout the space, resulting in enhanced comfort levels. Moreover, the emphasis on energy efficiency and sustainability in the commercial sector is driving the adoption of water-based systems. These systems leverage renewable energy sources, advanced controls, and technologies like heat pumps and chillers to optimize energy usage and reduce operational costs.

Water-based Heating & Cooling Systems MarketRegional Analysis

Water-based heating & cooling systems market in Asia Pacific to hold the highest CAGR during the forecast period

China, Japan, and India are among a few major contributors to the water-based heating & cooling systems market share in APAC. Growing construction activities and the rising population are a few key factors boosting the growth of the water-based heating and cooling systems market in the region. There is a considerable demand for smart homes in countries such as Japan, South Korea, and China. Rapid urbanization and industrialization are also increasing the demand for water-based heating and cooling systems in the region. Moreover, the enforcement of regulatory programs such as the Commercial Building Disclosure (CBD) Program (Australia), the launch of Energy Conservation Building Codes (India), the introduction of the LEED-India project, and the formation of the Indian Society of Heating, Refrigerating, and Air-Conditioning Engineers (ISHRAE) support the adoption of water-based heating and cooling systems in the region

Water-based Heating & Cooling Systems Market by Region

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Top Water-based Heating & Cooling Systems Companies - Key Market Players:

The water-based heating & cooling systems companis is dominated by players such as

• Daikin (Japan),
• Johnson Controls (US),
• Carrier Global Corporation (US),
• Trane Technologies (US),
• Fujitsu (Japan), and others.

Water-based Heating & Cooling Systems Market Report Scope :

Water-based Heating & Cooling Systems Market Highlights

The study categorizes the water-based heating & cooling systems market based on the following segments:

Recent Developments in Water-based Heating and Cooling System Industry

• Daikin, a Japanese multinational air conditioning and refrigeration company, launched a new water-sourced heat pump in April 2023. The new heat pump is designed to be more energy-efficient and environmentally friendly than traditional heat pumps.
• Mitsubishi Electric, a Japanese multinational conglomerate, partnered with Carrier, an American multinational corporation, on a water-based heating and cooling system in March 2023. The new system is designed to be more energy-efficient and environmentally friendly than traditional heating and cooling systems.
• Vaillant, a German multinational heating and plumbing company, launched a new water-based heat pump for commercial buildings in February 2023.
• Johnson Controls, an American multinational technology company, launched a new water-source heat pump in January 2023.
• Rheem, an American water heating, hydronic heating, and cooling company, partnered with Enercon, a Danish manufacturer of water-sourced heat pumps, in December 2022. The partnership will allow Rheem to offer Enercon's water-sourced heat pumps to its customers.

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