HVAC Variable Frequency Drive Market Size, Share & Covid-19 Impact Analysis, By Type (AC Drive, DC Drive, and Servo Drive), By Power Range (Micro, Low, Medium and High), By Application (Residential, Commercial, and Industrial), and Regional Forecast, 2020-2027

The global HVAC variable frequency drive market size was USD 3.16 billion in 2019. The global impact of the COVID-19 has been unprecedented and staggering, with HVAC variable frequency drives witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market will exhibit a decline of -15.05% in 2020. The market is projected to grow from USD 2.69 billion in 2020 to USD 3.99 billion in 2027 at a CAGR of 5.8% during the 2020-2027 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

A variable frequency drive (VFD) is a motor controller used to drive an electric motor by varying the voltage and frequency of its power supply. Variable frequency drives take in a constant AC voltage and a frequency input and then electronically generate a variable voltage and frequency to drive an induction motor situated in a heating, ventilation & air conditioning (HVAC) System.  HVAC variable frequency drives are used in a wide range of applications such as process compressors, conveyors, utility pumps, fans, process pumps, fans, blowers, coolers, cooling tower fans, air compressors, crushers, grinders, and chippers.  

The HVAC variable frequency drive market is rapidly growing across the globe due to its excellent physical properties such as energy-saving, improving system efficiency, converting power in hybridization applications, enhancing the working environment, and reducing mechanical stress on machines to extend their lifetime, and the induction motor size.

Unavailability of Financial Assistance for Industries amid COVID-19 to Impact Growth

The COVID-19 pandemic has severely impacted the growth of the global HVAC VFD market. The crisis evolved by the outburst of this global infection problem has carried every country in an unprecedented situation. Various factors, such as reduced worldwide demand and ongoing price wars, have impacted the financial health of several industries. The decrease in the number of new construction projects and the temporary shutdown of manufacturing industries and commercial spaces worldwide are factors hampering the market growth.

LATEST TRENDS

Rising Demand from Building & Construction Sector to Propel Market Growth

HVAC variable frequency drives are primarily used in the building & construction sector, as they provide appropriate temperatures and ventilation conditions across the building. The majority of HVAC systems use variable volume fan systems to distribute conditioned air. The most common application of an HVAC VFD is to control pumps, fans, and compressors. VFDs can provide precise speed or torque control in commercial applications. Moreover, they integrate networking and diagnostic capabilities to control performance better and increase productivity. HVAC VFD are great in building automation systems owing to them providing energy savings, intelligent motor control, and reduction of peak-current drawn.

The growing population, coupled with urbanization, is likely to boost the building & construction sector leading to an increased demand for energy-efficient products. For instance, as per Central Intelligence Agency, by 2040, the urban population will almost double compared to the rural population. HVAC variable frequency drives provide thermal comfort to the building or room accompanied by indoor air quality. Additionally, these systems used for building automation help maintain consistent temperature, humidity levels and improve air quality.

DRIVING FACTORS

Increasing Demand for Energy Efficient Solutions to Aid Growth

The increasing consumer awareness for energy efficiency products that reduce carbon emissions and meet the climate change targets is likely to drive the global market during the forecast period.

Several countries across the globe are establishing stringent regulations for energy-efficient products. For instance, the U.S. Environmental Protection Agency (EPA) imposed the US Energy Independence and Security Act (EISA), which mandates companies to manufacture energy-efficient products. Thus, several key players are constantly focusing on more industrial solutions that ensure energy efficiency, advanced wireless systems, integrated controls, reduced space, quicker installation, and higher quality finishes.

Increasing Government Regulations and Policies for Energy Saving to Spur Demand

Favorable government regulations and policies are expected to enhance the growth of the HVAC VFD market. For instance, the European Union (EU) established an Energy Performance of Buildings Directive 2010/31/EU (EPBD) and the Energy Efficiency Directive 2012/27/EU. These directives promote policies that will help achieve a highly energy-efficient and decarbonized infrastructure by 2050.

Several countries worldwide have signed the Paris Agreement that propels the adoption of the clean, smart, and secure energy system. Several countries are building on climate and energy goals to reduce greenhouse gas emissions, promote renewable energy, and achieve significant energy savings. This factor is likely to drive the global HVAC variable frequency drive market growth during the forecast period.

RESTRAINING FACTORS

High Installation Cost of HVAC System to Limit Adoption

The HVAC system comprises air return, filter, exhaust outlets, ducts, induction motor, electrical elements, outdoor unit, compressor, coils, and blower. The cost of each device is high, and these systems require a large space. This factor is likely to hamper the HVAC VFD drive market growth. HVAC variable frequency drive systems suffer from low power factor, harmonics, and operational noise, leading to high overhead costs. Newly developed variable frequency drives operate at higher frequencies, resulting in the associated noise being above the audible range.

SEGMENTATION

By Type Analysis

AC Drive Segment is Likely to Dominate

Based on type, the market is segmented into AC drive, DC drive, and servo drive.

The AC drive segment accounted for the major share of the market in 2019. AC drives are intended to optimize energy efficiency by enabling variable-speed control and soft starting in normal duty and heavy-duty applications. It is generally used in applications, where the difference in a current draw between low voltage and medium voltage becomes substantial. 

The DC drive segment is expected to experience considerable growth as DC drives have high starting torque, speed control, quick starting, stopping, reversing, and acceleration, linear speed-torque curve, and accurate step-less speed with constant torque. This is likely to surge its adoption across the globe.

By Power Range  

Medium Range Segment is Expected to Grow at a Considerable Pace

Based on the power range, the market is segmented into micro, low, medium, and high power.

Among these, the medium power range segment accounted for the highest share of the market in 2019. Medium variable frequency drives provide flexibility in various applications such as fans, pumps, and compressors that require variable speed motor control. They are ideal for motor control applications ranging from 100 kW to 11,000 kW and motors rated from 2.3 kV to 11 kV. Medium VFDs are designed to maximize energy efficiency by enabling soft-starting and variable-speed control in normal duty and heavy-duty applications

The low voltage variable frequency drive is a type of adjustable-speed drive. It is mainly used in electro-mechanical drive systems to control AC motor speed and torque by varying motor input frequency and voltage. The low-voltage VFDs are widely used in several industrial automation applications. This is likely to boost the segmental growth in the forthcoming years.

By Application Analysis

Increasing Construction of Commercial Spaces to Augment Industry Growth

Based on application, the global market is classified into residential, commercial, and industrial.

The commercial sector includes office buildings, supermarkets, department stores, universities, museums, indoor stadiums, cinemas, recreation centers, shopping centers, restaurants, etc. In commercial buildings, the HVAC system serves the conditioned space of a single-zone. This is anticipated to contribute to the segmental growth in the forthcoming years.

The residential sector consists of hotels, motels, apartment houses, and private homes. HVAC systems used in the residential sector maintain a consistent temperature and improve air quality.

The industrial sector comprises hospitals, production areas, aircraft, automobiles, railroad cars, buses, and cruise ships. HVAC variable frequency drives provide efficient temperatures by maintaining accurate temperatures and humidity as per requirements in the industrial sector.

REGIONAL INSIGHTS

The market has been analyzed across five key regions, comprising North America, Asia Pacific, the Middle East & Africa, Europe, and Latin America. 

Asia Pacific stood at USD 1.14 Billion in 2019. The region is expected to remain dominant due to the rapid-paced industrialization and urbanization. Moreover, the increasing investments by governments and private agencies to boost the building automation sector will favor the regional expansion of the market further.

North America is anticipated to hold the second position in the market during the forecast period. The increasing demand for building & construction and the automation sector is expected to favor the market growth in the region.

The market in Europe is expected to experience exponential growth during the forecast period. The majority of European countries experience a cold climate. Hence, they require heat for residential and commercial spaces, resulting in the huge demand for HVAC variable frequency drives. 

Latin America holds potential growth opportunities for HVAC variable frequency drives owing to the increasing investment in construction projects.

The Middle East & Africa is the prominent region due to the gulf countries experiencing fast-paced growth in the energy demand owing to the increasing consumption of power and rapid industrialization.

KEY INDUSTRY PLAYERS

Danfoss Expanding its Product Line and Utilizing its Channels to Market New Products

The market is highly fragmented, with many players providing variable frequency drives to HVAC industries. Major players such as ABB Ltd., Siemens AG, Danfoss Group, Schneider Electric SE, Rockwell Automation, Inc., Mitsubishi Electric Co., and Yaskawa Electric Corporation constitute around one-fourth of the market, and the remaining market is dominated by other regional and local players.

Danfoss is engaged in developing and manufacturing variable speed control devices for electric motors, including low and medium voltage AC drives, motion drives, stacks and power modules, digital tools, and services. The solutions are used to provide optimal operation of pumps, fans, chillers, conveyors, electric vehicles, hybrid systems, and power conversion. Furthermore, these products are widely used for industrial applications such as automotive, solar, wind. The company’s AC drives are sold under the brand name of VACON and VLT drives. These AC drives serve in the power range of 0.18 kW to 6 MW. On July 31, 2019, Danfoss acquired the UQM Technologies located in Colorado, USA. UQM is a leading expert and the technology leader in motors and inverters in the power range of up to 250 kW.

LIST OF KEY MARKET PLAYERS PROFILED:

• ABB Ltd.


• Siemens AG


• Schneider Electric SE


• Rockwell Automation, Inc.


• Mitsubishi Electric Co.


• Yaskawa Electric Corporation


• RoMan Manufacturing, Inc.


• Danfoss


• Hammond Power Solutions


• Controlled Magnetics, Inc.


• TCI, LLC


• Badger Magnetics, Inc.


• MGM Transformer Company


• L/C Magnetics

KEY INDUSTRY DEVELOPMENTS:

• April 2020 –  Rockwell Automation, Inc. launched a PowerFlex 6000T medium voltage drive. This newly launched drive comprises a data translator, visual user interface, and data configurator.


• May 2020 – ABB and Metsä Fibre signed an agreement worth EUR 40 million. As per the agreement, ABB Finland will deliver electrification and drive technology solutions for Metsä Fibre’s planned bioproduct mill in Kemi, northern Finland.

REPORT COVERAGE

The market report presents a comprehensive assessment of the industry by offering valuable insights, facts, industry-related information, and historical data. Several methodologies and approaches are adopted to make meaningful assumptions and views to formulate the market research report. Furthermore, the report covers a detailed analysis and information as per market segments, including types, power range, applications, and regions, helping our readers to get a comprehensive overview of the global industry.

REPORT SCOPE & SEGMENTATION