With more climate change regulations coming into place, ClimateTech companies will more readily get the green light for their innovative products and solutions. We are entering an era of total HVAC (heating, ventilation and air conditioning) system upgrades.
The North America HVAC system market was valued at almost $44 billion in 2022 and is projected to grow to more than $62 billion by 2029, at a CAGR of 5.2%. Demand will remain high due to climate change with its extreme temperatures, the growing real estate market and businesses aiming to cut costs through energy-efficient equipment. If you are developing an HVAC business, now is your time. Here are just a few market niches that you might be able to fill.
Refrigerants need to be replaced
The refrigerants we currently are detrimental for the environment. Hydrofluorocarbons (HFCs) are highly potent greenhouse gasses used in refrigeration and air conditioning, with thousands of times worse are more noxious than carbon dioxide. The good news for the HVAC industry is that a global treaty requires all refrigerants with GWP – global warming potential – be replaced by 2030, a very ambitious goal.
HFCs are harmful for the ozone layer and considered a major driver of global warming. And they are used by every air conditioning company. Going forward, businesses will have to adapt to new requirements.
In October 2022, President Joe Biden signed an international agreement that compels the U.S. and more than 130 nations to phase down production and use of HFCs by 85% over the next 14 years. The measure, according to scientists, will help reduce at least some of the coming rise in global temperatures.
It’s time to save energy and costs
Existing HVAC systems consume too much energy and, what’s even worse, they work non-stop. I am a huge advocate for cost efficiency, and the correct insulation process could help many businesses and production facilities. I recently visited a factory using a HVAC system that I helped to develop. But they had some hollow space on the wall, and air can easily travel through that, so they’ve been losing a lot of energy. Basically, the cooling process never stopped.
You can’t save any energy running the air-conditioning all day. HVAC systems aren’t meant to work 24/7 – they should run no more than 8 hours a day, maximum. The same goes for our homes and office buildings, as well as data centers of the big tech companies, such as Google and Apple.
In New York, most greenhouse gas emissions come from city buildings, because many are old. In Arizona and Texas, where temperatures reach over 100F, the need for energy saving is huge. It’s opening a window of opportunity to new business, such as insulation materials.
According to recent reports, the demand for energy efficient solutions in buildings will boost the growth of the insulation market, which is projected to grow to $42.5 billion in 2029.
Alternative energy HVAC solutions
The resources of our planet are not unlimited. According to some estimates, we will run out of fossil fuels in this century. Electricity prices will also increase due to growing pressure on the power grid. Developing entirely new, alternative energy-based HVAC systems is crucial both for businesses and the planet.
We also need to reduce the costs of food production: most agricultural companies use technology that leaves a large carbon footprint. New HVAC systems could use solar, ice-powered air conditioners, geothermal heat pumps, and maybe technology we haven’t developed yet. This is all a huge opportunity for entrepreneurs, looking for their “next big thing” and a market with the potential for exponential growth.
