VRF Refrigeration Systems Market - Forecast(2024 - 2030)

The global VRF Refrigeration System Market size is forecasted to reach $31.2 billion by 2027, growing at a CAGR of 7.4% from 2022 to 2027. The demand for VRF or variable refrigerant volume System increases in residential and commercial places, owing to its benefits such as energy efficiency and minimum maintenance is set to be the major driver for the growth of the market over the forecast period. Moreover, use of aluminum based micro channel heat exchangers and polyisocyanurate insulation as well as fiberglass insulation in VRF Refrigeration System provides better and efficient heat transfer. VRF or variable refrigerant volume provides seamless building management solution, energy modeling, humidity management solution as well as reduces mechanical noise over traditional FCU systems. Such benefits are set to accelerate the VRF Refrigeration System adoption during the forecast period 2021-2026. Furthermore, rising installation of VRF heat pump system, especially those based on natural gas furnaces, in office buildings also influences the growth of the market.

The report based on: “VRF Refrigeration System Market Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the VRF Refrigeration System Market industry outlook.

By System Type: Heat Pump System, Heat Recovery System

By Component: Outdoor units, Indoor units, Control System & Accessories.

By Condensing Unit: Water-cooled units, Air-cooled units

By Capacity: Up to 10 tons, 11-18 tons, 19-26 tons, Above 26 tons

By Application: Commercial (office buildings, medical centers, hotels, malls, retail stores, others), Residential (Apartments, Villa, Bungalow, Others), others.

By Geography: North America (USA, Canada and Mexico), Europe (U.K., Germany, Italy, France, Netherland & Rest of Europe), APAC (China, Japan, South Korea, India, Australia & Rest of APAC), South America (Brazil, Argentina & Rest of South America), RoW (Middle East & Africa)

Based on system type segmentation, Heat Pump System is analyzed to grow with the highest CAGR of around 8.6% in the global VRF Refrigeration System Market during the forecast period 2022-2027. The factors such as growing construction industry and easy installation of this system have been contributing to the market growth of VRF heat pump segment. VRF heat system utilizes variable speed technology with an inverter compressor for consistent temperature regulation. Owing to its benefits such as better part-load efficiency, smaller zones and reduced duct losses, VRF heat system are installed in wide range of commercial places such as office space, banks and churches. In June 2020, Carrier introduced Carrier 38VMH 3-Phase VRF Heat System with features such as 36 tons capacity, ability to connect to 64 multiple style indoor units with a triple module outdoor unit and piping flexibility to 3280 ft. 38VMH 3-Phase VRF Heat System is perfect for K-12 schools as well as university buildings, Banks, municipalities, Retail spaces and Places of worship. Such developments can further influence the market growth of VRF Refrigeration Systems in the long run.

Residential application segment is analyzed to account for the highest CAGR of 8.8% in the global VRF Refrigeration System Market during the forecast period 2022-2027. The factors such as energy saving, precise temperature control and exceptional comfort have been increasing the use of VRF Refrigeration System across residential places such as luxury apartments, villas, bungalows and town houses. Many manufacturing companies are providing VRF Refrigeration System that is designed for residential as well as commercial applications. In January 2021, Samsung Electronics Co Ltd launched new Wi-Fi enabled large capacity VRF Air conditioning system in India which includes smart features such as voice control and connected home experience using app on any smart phone and is ideal for villas, bungalows, houses, premium apartments as well as commercial establishments. Moreover, high electricity bills and expensive spaces, compels the people in residential areas to adopt VRF Refrigeration System over HVAC System to reduce expenses.

APAC held the highest VRF Refrigeration System Market share of around 35% in the global VRF Refrigeration System market in 2021 and is further set to grow at a significant rate during the forecast period 2022-2027, owing to growing installation in commercial building. The factors such as rapid industrialization, urbanization and technological advancement like development of smart VRF Refrigeration System will further fuel the VRF Refrigeration System market across the APAC region in long run. Moreover, the growing construction activities and government regulations to control pollution also assist the market growth in this region. Furthermore government investment in real estate development creates opportunities for the growth of the market. For instance, According to National Bureau of Statistics data, China’s investment in real estate development reached to $215 billion in first quarter of 2021 which is 38.3% higher than 2020 and out of this 74% investment are for residential buildings, thereby creating scope for the adoption of VRF Refrigeration System in residential buildings. Such developments can further influence the market growth of VRF Refrigeration Systems in the long run.

Growing penetration of VRF Refrigeration System in commercial applications is set to be one of the major factors analyzed to drive the market forward during the forecast period. In VRF Refrigeration System, the compressors can identify the need for each zone of the commercial buildings, offering the right quantity of refrigerant required for each air handling unit. These systems typically take less piping and connections to configure between outdoor unit multi-port distribution and indoor units. Moreover, VRF Refrigeration System provides plenty of benefits such as improved versatility, better energy efficiency, better connectivity; reduce cost for building operation and less distracting sound, which leads to the adoption of VRF Refrigeration System in commercial building. In March 2020, Carrier introduced Carrier Compact 4-Way Cassette 40VMC outdoor unit for VRF Refrigeration System which can be matched with 38VMH heat pump or 38VMR heat recovery and 40MV9 series controllers and can be used for commercial buildings.

Increasing demand towards energy saving products is one of the major drivers impacting the market growth of VRF Refrigeration Systems. The major factor that accelerates the demand of energy saving products is growing governmental regulations for controlling pollution. In January 2021, Government of India launched an initiative on voluntary basis and the energy consumption standards i.e. The Star Labeling Programme for Air Compressor. This initiative is expected to save around 8.41 Billion Units of electricity for Air Compressors till 2030, thus increases the demand for energy saving products, which further positively influences the market growth. Furthermore, in comparison to traditional system, VRF Refrigeration Systems has the capability of saving 40% of energy consumption, which makes it a highly energy efficient alternative. Moreover several companies have started investing on developing VRF Refrigeration Systems with high energy saving capabilities. For instance, in February 2021, Carrier China signed a $17m contract with China Eastern Airlines Investment to offer XCT7 VRF air conditioning systems especially for commercial offices and residential projects across China. The XCT7 VRF Refrigeration System’s is highly energy efficient compared to China’s national Level 1 energy efficiency standard. Such developments can influence the market growth of VRF Refrigeration Systems in the long run.

 High installation cost acts as a major challenge restraining the market growth of VRF Refrigeration System. The cost of compressors, drain lines, liquid receiver, valves, suction accumulators, control system, valves & inverts and filters in VRF Refrigeration System is quite expensive. Apart from high cost of equipment, skilled technicians are required to install the VRF Refrigeration System, whose charges are higher than normal installation workers. Additionally, the installation cost of VRF Refrigeration System is quite higher when compared to traditional HVAC System. Owing to the above mentioned factor, adoption of VRF Refrigeration System will be significantly impacted, thus hampering its market growth. Even for smaller systems, Material costs including pipes, wiring and tubing, tend to cost around $400–600 per head, with contractors charging around $2,000+ per head for installation for VRF systems of around $8,000-10,000. This significantly drives up the price of systems and thereby hinders adoption.

Partnership, Acquisitions, Collaboration, technology launches and R&D activities are key strategies adopted by players in the VRF Refrigeration System Market. The VRF Refrigeration System top 10 companies includes