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VRF System Market Forecast, Trends, Scope by 2031

VRF System Market Size and Forecast (2021 - 2031), Global and Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Component (Indoor Units, Outdoor Units, and Control Systems and Accessories), System Type (Heat Pump, Heat Recovery, and Cooling Only), Application (Commercial, Industrial, and Residential), and Geography

Publication Month : Oct 2024

  • Report Code : TIPTE100001344
  • Category : Electronics and Semiconductor
  • Status : Published
  • No. of Pages : 150
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The VRF system market size is expected to reach US$ 54.09 billion by 2031 from US$ 21.65 billion in 2023. The market is estimated to record a CAGR of 12.1% from 2023 to 2031. The growing demand for customized cooling fans is likely to be a key market trend.

VRF System Market Analysis

VRF systems provide higher levels of energy efficiency. Unlike typical systems, which need turning on and off, a VRF system can run continuously at part-load, resulting in much improved overall operating efficiency. It can be equipped with heat recovery, which allows heat recovered from one space to be utilized to condition other places requiring heat in the establishment and vice versa, subsequently enhancing total system efficiency. VRF systems are often smaller and lighter in weight than their counterparts, making them easier to install and move while maintaining valuable ceiling heights and flooring areas.

The pressing need for energy efficiency and conservation and diversifying applications across various industries are the main factors driving the VRF system market growth. On the other hand, higher upfront costs limit the growth of the market. Nevertheless, pairing building automation and VRF systems and explicit regulatory standards create significant growth opportunities for the VRF system market. VRF system integration with home automation is likely to set significant future trends in the VRF system market.

VRF System Market Overview

VRF systems use refrigerants for both heating and cooling. VRF is a large-scale, high-efficiency ductless HVAC system technology. Unlike split ACs, VRF systems can support many indoor units on a single system that can be tailored to the unique requirements of users. These systems are categorized as either heat recovery or heat pump systems. Heat recovery VRF systems can deliver heating and cooling at the same time. Further, VRF systems are outfitted with multiple air handlers that can be regulated separately, and they can operate silently, even at full capacities. Thus, these systems are intended for both industrial and residential applications.

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VRF System Market: Strategic Insights

Market Size Value inUS$ 21.65 Billion in 2023
Market Size Value byUS$ 54.09 Billion by 2031
Growth rateCAGR of 12.1% from 2023 to 2031
Forecast Period2024-2031
Historic Period2021-2022
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VRF System Market Drivers and Opportunities

Diversifying Applications Across Various Industries

Operations of VRF systems involve the continuous functioning of compressors and directing refrigerant strategically in every zone as needed. A VRF system serves as an HVAC solution for a wide range of applications across various industries due to its small size, high energy efficiency, and exceptional zoning capabilities. These systems are installed in hotels, office buildings, apartment buildings, schools and universities, dormitories, data centers, hospitals, manufacturing plants, laboratory facilities, restaurants, large retail spaces, and anywhere that requires simultaneous heating and cooling over multiple zones. They provide a comfortable experience with their quieter operation and personalized zoning, regardless of room occupancy. Centralized control systems aid in the adjustment of room temperatures before guests' arrival or after checkout, resulting in significant cost savings. VRF systems with a single condenser unlock further energy savings. These devices are also available as water-source heat pumps, serving as an excellent solution for data rooms in office buildings equipped with cooling towers that supply water-cooled air handling systems. Water-source condensing units are incredibly compact and can be installed in a local equipment room with minimal floor space.

Educational facilities, ranging from large college campuses to smaller elementary schools, face particular challenges arising from a variety of rooms. Each room, from modest administrative offices to mid-sized classrooms to big gymnasiums, requires various HVAC equipment. All of these diverse needs can be fulfilled with ease using a VRF system with a single control panel. Air quality and temperature management specifications are critical in hospitals or clinical settings. The air can have an impact on patients' rehabilitation. A VRF system allows for keeping lobbies and common passages heated or at ambient temperatures while maintaining low temperatures inside recovery rooms. Thus, one can create zones without duct leaks, thereby filtering the air more effectively and minimizing cross-contamination. Therefore, diversifying applications across various industries drive the growth of the VRF system market.

Pairing Building Automation and VRF Systems

The combination of building automation systems and VRF systems may provide more holistic control over energy usage. Engineers these days capitalize on the long-term benefits of building decarbonization. For years, climate experts have warned about the dangers of permitting greenhouse gas (GHG) emissions. More than 20 states across North America have set mandated decarbonization targets, and more than 45 states in North America provide utility incentives for using electric equipment in buildings. In February 2024, the European Commission announced a new climate objective that aims to reduce greenhouse gas emissions in the European Union by 90% by 2040 compared to 1990 levels. The aim is consistent with the 90–95% emissions target proposed by the European Scientific Advisory Board on Climate Change. VRF systems are uniquely positioned to help building owners meet current carbon dioxide reduction goals while lowering utility costs. The systems do not require ducting, which makes them ideal for upgrading older buildings to modern standards. They can offer zonal, individualized comfort management and improved indoor environmental quality. The energy efficiency and cost efficiency benefits of VRF systems are enhanced with their integration with building automation systems (BAS). According to scientific experts associated with the Project Drawdown, building automation systems can increase heating and cooling efficiency by more than 20% while reducing energy consumption for lighting, appliances, and other items by 8%. BAS adoption ranges from 0% to 75% in high-income nations, including the US. Substantially increasing adoption—at a net initial cost of US US$ 287.70–393.35 billion—could save building owners US$ 2.27–3.42 trillion in operational expenditures. It may also prevent 9.55–14.01 gigatons of carbon dioxide emissions by 2050. Thus, pairing building automation and VRF systems can create ample opportunities for the growth of the VRF system market during the forecast period.

VRF System Market Report Segmentation Analysis

Key segments that contributed to the derivation of the VRF System Market analysis are component, system type, and applications.

  • Based on component, the market is segmented into indoor units, outdoor units, and control systems and accessories. The outdoor units segment dominated the market in 2023.
  • In terms of system type, the market is categorized into heat pump, heat recovery, and cooling only. The heat pump segment dominated the market in 2023.
  • Based on application, the market is segmented into commercial, industrial, and residential. The commercial segment dominated the market in 2023.

VRF System Market Share Analysis by Geography

  • The VRF System Market is segmented into five major regions: North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South & Central America. APAC dominated the market in 2023, followed by Europe and North America.
  • The rising temperatures and unpredictable weather have encouraged consumers to adopt VRF systems across countries in Asia Pacific. VRF systems provide nonsimultaneous cooling and heating at any time and improve the visual value of commercial and residential buildings. Various companies provide appealing VRF systems to customers, allowing them to select from various types and designs. The altering preferences of consumers and the advent of cutting-edge designs are projected to boost the demand for VRF systems.

VRF System Market Report Scope

VRF System Market News and Recent Developments

The VRF system market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the VRF system market are listed below:

  • Fujitsu General America released Airstage VU-V systems that offer greater flexibility, efficiency, and capacity for commercial and light commercial applications. Airstage VU-V outdoor units can serve either as heat pumps or heat recovery systems with simple setting changes and the addition of refrigerant branch units (RBUs). The new VRF platform offers single modules with broader size ranges, from 6 to 16 tons and up to 36 tons per combined system. As many as 64 indoor units can be connected to a single system.

(Source: Fujitsu General, Press Release, February 2023)

  • LG Electronics announced the launch of the new Multi V i VRF solution equipped with the company's highly evolved AI engine in key global markets, starting from Europe. Suitable for mid- to high-rise buildings, such as offices, schools, shopping malls, apartment buildings, and hotels, the energy-efficient Multi V I comes with a range of differentiated, smart features that help reduce energy consumption and deliver a more comfortable indoor environment as well as a quieter outdoor environment throughout a year.

(Source: LG Electronics, Press Release, February 2023)

VRF System Market Report Coverage and Deliverables

The "VRF System Market Size and Forecast (2021–2031)" provides a detailed analysis of the market covering the areas mentioned below:

  • VRF system market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
  • VRF system market trends as well as market dynamics such as drivers, restraints, and key opportunities
  • Detailed PEST and SWOT analysis
  • VRF system market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments
  • Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the VRF system market
  • Detailed company profiles
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered

This text is related
to segments covered.

Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope

This text is related
to country scope.

Frequently Asked Questions


What is the estimated market size for the VRF system market in 2023?

The VRF system market was estimated to be US$ 21.65 billion in 2023 and is expected to grow at a CAGR of 12.1 % during the forecast period 2023 - 2031.

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. Data Collection and Secondary Research:

As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.

Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.

  1. Primary Research:

The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.

For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.

A typical research interview fulfils the following functions:

  • Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
  • Validates and strengthens in-house secondary research findings
  • Develops the analysis team’s expertise and market understanding

Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:

  • Industry participants: VPs, business development managers, market intelligence managers and national sales managers
  • Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.

Below is the breakup of our primary respondents by company, designation, and region:

Research Methodology

Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.

  1. Data Analysis:

Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.

  • 3.1 Macro-Economic Factor Analysis:

We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.

  • 3.2 Country Level Data:

Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.

  • 3.3 Company Profile:

The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.

  • 3.4 Developing Base Number:

Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.

  1. Data Triangulation and Final Review:

The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.

We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.

We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.

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