Is HVAC&R becoming a two-speed market?

The Building Services Research and Intelligence Association (BSRIA) has released its most recent Worldwide Air Conditioning and Heat Pump reports, which show an increasingly complex global cooling market.

Overall demand for cooling has risen by 245% since 2010, however, there are two distinct market tracks emerging.

In the high-value commercial sector, specialist applications including AI and data centres are driving demand for innovative solutions.

This growth is due to both the number of data centres under construction and coming online, and also the increase in high heat density in facilities due to AI workloads.  This is accelerating demand for liquid cooling technologies, as they are more effective in the high heat, high density setting than traditional air systems, according to BSRIA.

Overall in the commercial sector, demand for chillers is a particularly pronounced segment, and average selling prices for chillers rose by 3.6% in 2025. Air handling units are also at a premium, with average prices rising by 4.5% in the same period.

BSRIA notes that some select technologies, in particular oil-free centrifugal chillers, are driving more than half of the market in countries like Indonesia, Mexico, Turkey, the UAE and the USA.  

Competition intense in residential

In the high-volume residential cooling sector, prices for equipment such as ductless split systems are under downward pressure. The research attributes this to competition, with the top ten suppliers now accounting for over 85% of global sales in this category. 

There has been a rapid shift towards inverter-based systems, particularly in emerging economies. Alongside this, more jurisdictions are implementing legislation to phase down low-energy-efficiency AC systems and HFCs, making low-GWP and natural refrigerants mainstream choices for new cooling systems and retrofits. 

The heat pump market is also recovering, with residential heating installations a key demand driver. BSRIA’s research found heat pump air conditioning systems have an increasingly important role in space heating, with the volume of reversible single-splits installed growing globally by 3.3% over 2025.

Caring about carbon

The research also found that building owners and investors are increasingly focused on lifetime energy performance and the carbon impact of cooling systems, not just the initial capital expense of procurement.

BSRIA suggests this is causing “evolution” in how systems look, are procured, financed and operated, and resulted in a premium for low-carbon, high-efficiency cooling solutions. 

“HVAC’s next phase will not be won by technology alone. It will be won by organisations that are built to operate in this new environment,” says Aline Breslauer, Research Manager, BSRIA AC, Refrigeration and Ventilation.

“Advantage will come from adaptability, not optimisation.”

“2025 was a year of uncertainty, and in the AC market we saw rising competition with increased (mergers and acquisitions) activity driving consolidation. However, globally, the need for cooling technologies remains high, with demand jumping 245% over the past 15 years.

“We predict that growth will continue, though it will remain uneven amid ongoing economic and geopolitical volatility.”  

Read more and access the reports here.

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