Energy Recovery Ventilator Market Size, Share & COVID-19 Impact Analysis, By Type (Wall-mount, Ceiling-mount, Cabinet), By Application (Residential, Commercial, Others), and Regional Forecast, 2021-2028

The global energy recovery ventilator market size was USD 2.95 billion in 2020 and is projected to grow from USD 3.18 billion in 2021 to USD 5.61 billion in 2028 at a CAGR of 8.4% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with energy recovery ventilators witnessing a positive impact on demand across all regions amid the pandemic. Based on our analysis, the global market saw a decline of 7.6% in 2020 compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

An energy recovery ventilator (ERV) is a central ventilation system that provides fresh air by removing indoor polluted air and balancing the humidity within the room space. It is commonly known as ERV ventilation systems and ERV air exchangers. It captures the pollutants, pollen, and other hazardous contaminants to ensure that the pleasant air enters the available room space.

The Environmental Protection Agency (EPA) stated that indoor air quality (IAQ) is two to five times worse than outdoor air. The poor indoor air quality in a compact building is due to a lack of ventilation. Inhalation of bad air can cause various health issues, such as sick building syndrome (SBS). To avoid such adverse consequences, ERV is gaining popularity as it removes foul air and moisture and improves the indoor environment. Owing to the growing need for ventilation, the global energy recovery ventilation system market is expected to spur in the upcoming years.

Moderate COVID-19 Impact Resulted in Increased ERV System Installation

The world is facing the adverse impacts of the COVID 19 pandemic, which has also ultimately affected ERV production across the manufacturing sites due to the sudden lockdown. Referring to multiple secondary sources, in the U.S., approximately 45% of the HVAC companies lost their seasonal sales, owing to the shrunken installation of energy recovery ventilators and lack of workers. Several industries are hampered amid coronavirus and witnessed major downfall till the second half of 2020. HVAC is one of the least affected industries, owing to the need for ventilation across various sectors. Thus, it is being expected that the market is moderately affected during the pandemic and is projected to recover soon during the forecast period.

LATEST TRENDS

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Increasing Construction of Green Buildings to Accelerate Market Growth

The growing trend towards the construction of green buildings is aiding the market of energy recovery ventilators. This is attributable to the rising awareness of occupants for health, due to rising hazardous emissions., According to The U.S. Green Building Council (USGBC), green and healthier buildings streamlined with supportive ventilation can grow return on investment (ROI) by 19% and building asset value by 10%. Owing to this, the market for energy ventilators is anticipated to grow significantly in the future. Additionally, key suppliers are aligning their products in line with green building certifications. For instance, RenewAire Company offers products that meet the stringent energy-efficiency requirements for green building certifications. Therefore, the growing construction activities across the globe for green buildings is expected to bode well for the global energy recovery ventilator market growth during the forecast period.

DRIVING FACTORS

Rising Awareness for Indoor Air Quality (IAQ) to Fuel Product Demand

The quality of air is an important concern and is getting acknowledged in the present time. The deficient Indoor Air Quality (IAQ) creates an adverse impact on the health, cognitive function, productivity, and wellbeing of indoor occupants. Therefore, the demand for ERVs is anticipated to drive the market. Since it can continuously replace stale indoor air with fresh outdoor air. Additionally, it can remove pollutants, including excess moisture, household chemicals, optimize energy efficiency, minimize carbon footprint, and others.

Moreover, until recent times, bringing in enough outdoor air to enhance indoor air quality was a major challenge as the conditioning process demands high cost. To overcome such challenges, manufacturers introduced ERVs, which potentially downsized ventilation energy costs and improved outdoor air quality intake. Furthermore, government intervention to construct energy consumption buildings and policies related to carbon emissions for residential and commercial purposes is one of the driving factors for the growth of the global market.

RESTRAINING FACTORS

Complex Installation Process and High Maintenance Cost of Product to Hamper Market Growth

The demand for ERVs is increasing with the growing awareness of air quality. However, complex installation procedures are limiting the market surge. It becomes challenging to integrate energy recovery ventilator at old constructed projects wherein the space to install ventilators is ideally not designed. Additionally, improper location of such systems can minimize the outdoor air intakes and blockage of airflow resulting in the intake of contaminated air. Moreover, depending on the designing and installation of these system, they require an additional substantial length of air ducting. Thus, the cost for maintenance of the products further increases as these ducts need to be sealed and insulated from external dirt and dust.

SEGMENTATION

By Type Analysis

Existing Ducting over Walls to Propel Ceiling-Mount Type Segment Growth

By type, the market is segmented into wall-mount, ceiling-mount, and cabinet-mount.

Amongst the type, the ceiling-mount segment is estimated to hold a vital part of the market share, exhibiting the highest growth rate. Ceiling-mounted ERVs have exponential demand in the market as the existing wiring and ducting over the walls ultimately minimizes the installation cost and the invasiveness.

The wall-mounted products portray the second-highest CAGR, owing to its feasibility of installing in the buildings without the mechanical ventilation systems. Buildings that possess smaller duct spaces and are built without mechanical ventilation systems prefer installing smaller and unitized wall-mounted ERV’s that vent directly outside through the exterior wall.

The cabinet-mounted ERV is projected to have a moderate growth rate during the forecast period due to its high installation and maintenance costs. This type of energy recovery ventilator is mostly integrated into the industrial sector with a life span of more than a decade.

By Application Analysis

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Rising Per Capita Spending to boost Residential Segment

Based on the application, the market is segmented into residential, commercial, and others, including the industrial sector.

In the commercial sector, hotels & restaurants, airports, educational institutions, private workplaces, and others opt for ERVs to provide a healthy workplace that helps in escalating work efficiency. According to the United Nations Environment Program Finance Initiative (UNEP FI), in 2015, 195 countries worldwide agreed to work together to curb global warming. Considering such statistics, the integration of ERVs is expected to grow in the commercial sector.

The residential sector is anticipated to experience significant growth during the forecast period. It is attributed to the rising per capita spending throughout the world. The housing development sector is on a hike in developed countries and developing countries such as China, India, Nigeria, and others that boost the global market growth. According to the Congressional Research Service (CRS) study, as of 2018, the overall spending on housing services was about USD 2.6 trillion in the United States, contributing nearly 11.6% of the GDP.

The industrial sector is expected to witness progressive growth, owing to its longer shelf life and usage. The rising foreign direct investments in the manufacturing sector of developing countries propel the demand for cabinet energy recovery ventilators for industrial purposes.

REGIONAL INSIGHTS

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Geographically, the market is segmented across five major regions, namely North America, Europe, Asia Pacific, and Rest of the World. They are further categorized into countries.

The harsh climatic conditions such as hailstorms, hurricanes, and heavy snowfall in North America worsen the indoor air quality, thus directly affecting people's health. North America’s residential fixed investment accounted for USD 785 billion with 3.3% of GDP. The rising investment in the residential sector is expected to increase the need for energy recovery ventilator installation to offer a safe and healthy indoor environment across the sector.

Asia Pacific is anticipated to witness the highest CAGR over the forecast period. It is attributed to the rising living standards in countries such as China, India, Malaysia, South Korea, Thailand, and others. These countries are aiming at modernizing residential and commercial building stocks. According to the International Finance Corporation (IFC), East and Pacific Asia account for the largest market share in the real estate sector. Additionally, it is forecasted to get investment opportunities of USD 16 trillion in the commercial and residential building sector. Such market opportunities will uplift the demand for ERV across the region.

India to Witness Highest CAGR attributed to fast-paced Infrastructural Activities across Applications

India is considered the leading country in installing ERVs and overall HVAC systems across buildings and other facilities. The governmental bodies are offering foreign direct investment (FDI) schemes that benefit the manufacturers. Owing to this, manufacturers such as Johnson Controls and others are focusing on manufacturing the cabinet, wall-mounted, and ceiling-mounted ERVs for residential, industrial, and commercial facilities. India being a humid environmental country, these systems regularize the indoor air quality and humidity to provide a safe and healthy indoor environment.

Europe is expected to witness progressive energy recovery ventilation system market growth in the near future due to new housing construction in Western countries.

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The Middle East and Africa and Latin America are expected to grow moderately compared to the other regions. This is mainly due to the stagnant growth rate of the construction sector across the Middle East and Africa and minimized port business activities across Latin America.

KEY INDUSTRY PLAYERS

Key players Focus on Expanding Their Business across the Globe

Key players emphasize expanding their manufacturing plants, research & development centers to meet consumer demand on time. Additionally, these market players are pouring heavy investments into upgrading the existing technologies to align with different emission standards. Moreover, to sustain in the market, market participants strengthen the profit structure by implementing the profitability improvement strategy. This includes mergers & acquisitions and sales of ERV units and components to small and medium-sized companies. For instance, in March 2018, Daikin added two new compact energy recovery ventilator units to reinforce its position in the commercial ventilation market.

Zehnder Group AG is Focusing on Acquisition Activities to Expand Product Reach

Zehnder Group AG is acquiring regional & local companies to expand its business across the residential and commercial sector applications. For instance, in March 2019, Zehnder Group AG acquired Recair, a ventilation product offering company, for approximately USD 8.3 million to offer ventilation solutions in Europe. The acquisition strengthens the market penetration of energy-efficient heat exchangers that is utilized in residential ventilation units.

LIST OF THE KEY COMPANIES PROFILED:

• Carrier (United Technologies) (United States)


• Johnson Controls (Ireland)


• Daikin Industries, Ltd. (Japan)


• Mitsubishi Electric Corporation (Japan)


• Trane (Ireland)


• LG Electronics (South Korea)


• Nortek Air Solutions, LLC (United States)


• Lennox International Inc. (United States)


• Greenheck (United States)


• Fujitsu Limited (Japan)


• Zehnder (Switzerland)


• HIMPEL (South Korea)


• Renewaire (United States)


• Dae Ryun Ind. Co. Ltd. (Korea)


• Ostberg (Sweden)


• Ruskin (United States)


• S&P USA Ventilation Systems, LLC (United States)


• UltimateAir, Inc. (United States)

KEY INDUSTRY DEVELOPMENTS:

• April 2020: - Mitsubishi Electric Corporation’s European subsidiary named ‘Mitsubishi Electric Europe B.V.’ acquired AQS PRODUKTER AB to strengthen commercial cooling and heating products in Sweden and total solution capabilities Mitsubishi Electric Europe B.V.

• March 2019 – LG Electronics acquired Qinggonglian Electrical Installation Engineering Co., Ltd. to capture the competitive market of air conditioners in China. LG Electronics is focusing on product penetration in large cities having demand for air conditioning solutions across China.

REPORT COVERAGE

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The global energy recovery ventilator market research report provides detailed insights of the market analysis. Some of them are growth drivers, restraints, competitive landscape, regional analysis, and challenges. It further offers an analytical depiction of the market, current trends, and estimations to illustrate the forthcoming investment pockets. The market is quantitatively analyzed from 2021 to 2028 to provide the financial competency of the market. The information gathered in this report has been taken from several primary and secondary sources.

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