Global Chiller Market Research Report, 2029

The chiller industry plays a vital role in various sectors, providing efficient cooling solutions for buildings, industrial processes, and other applications. Over the years, this industry has experienced significant growth and transformation, driven by technological advancements, increased emphasis on sustainability, and evolving customer demands. The concept of mechanical refrigeration dates back to the 19th century, but it wasn't until the mid-20th century that chillers became widely used for air conditioning in commercial buildings and industrial facilities. Initially, chillers relied on chlorofluorocarbons (CFCs) as refrigerants, contributing to environmental concerns. However, with the introduction of the Montreal Protocol in 1987, the industry shifted towards more environmentally friendly alternatives, such as hydrochlorofluorocarbons (HCFCs) and hydrofluorocarbons (HFCs). Modern chillers have seen substantial technological advancements, enhancing their efficiency, reliability, and environmental friendliness. One notable innovation is the development of variable frequency drives (VFDs), allowing chillers to adjust their speed according to the cooling demand. This not only improves energy efficiency but also extends the lifespan of the equipment. Additionally, advancements in compressor technology, heat exchanger design, and control systems have contributed to the overall performance of chillers. High-efficiency centrifugal and screw compressors, combined with intelligent control algorithms, enable precise temperature control and reduce energy consumption. In response to growing environmental concerns, the chiller industry has been actively exploring and adopting sustainable refrigerants with lower global warming potential (GWP) and ozone depletion potential (ODP). Natural refrigerants like ammonia, carbon dioxide, and hydrocarbons are gaining popularity due to their eco-friendly properties. Furthermore, manufacturers are increasingly focused on creating chillers that meet or exceed energy efficiency standards, such as those set by organizations like the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) and the European Union's Eco-Design Directive. These standards promote the development of energy-efficient and environmentally friendly cooling solutions. The rise of the Internet of Things (IoT) has also made its mark on the chiller industry. Smart chiller systems leverage IoT technology to enable remote monitoring, predictive maintenance, and data-driven decision-making. Building management systems can optimize chiller performance by analyzing real-time data, identifying potential issues, and adjusting settings for maximum efficiency. According to the research report, “Global Chiller Market Research Report, 2029” published by Actual Market Research, the market is anticipated to cross USD 15 Billion by 2029, increasing from USD 11.24 Billion in 2023. The market is expected to grow with 5.80% CAGR by 2024-29. Chillers are the most commonly used system in many industrial and power plants generating energy using renewable resources, as well as the average home air conditioner and refrigerator. The cold fluid is used to cool power plant components and processes, absorbing heat from them, and the warm fluid returns to the chiller to begin the process all over again. Power stations are conducting power plant training so that plant operators understand the working process of chillers. This provides multiple benefits to the power plant, including both an increased ability to detect equipment issues and prevention of malfunctions, which could result in the release of refrigerant, which can, in turn, expose the company to substantial fines by the EPA. The market is driven by the rising need for cost-effective and energy-efficient space cooling solutions in commercial and industrial sectors. This, in turn, is expected to augment the demand for the chillers market over the forecast period. According to the U.S. Department of Agriculture (USDA), the growing population, rising consumer disposable income and ongoing urbanization are expected to augment the growth of commercial and residential sector in the country in the forecast period. The demand for chillers in the residential sectors is driven by a combination of factors, including the need for efficient and reliable air conditioning systems. With a focus on energy efficiency, homeowners are increasingly adopting chillers equipped with advanced technologies and smart controls to ensure precise temperature regulation while minimizing environmental impact. In the commercial sector, the demand for chillers remains robust, particularly in industries such as hospitality, healthcare, and data centres. Moreover, chillers play a pivotal role in maintaining optimal temperatures for occupant comfort, equipment reliability, and critical processes. The trend towards sustainable building practices and stringent energy efficiency standards further accelerates the adoption of chillers in both residential and commercial applications. For instance, in March 2021, Rhoss launched MiDIpack-I Eco, a new range of air-cooled water chillers and reversible heat pump products range with inverter scroll compressors and R32 ecological gas. The range was aimed at the companies that opt for eco-sustainability.

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Market Drivers • Increasing Demand for Energy-Efficient Solutions: As energy costs rise and environmental concerns grow, there is a heightened demand for energy-efficient cooling solutions. Chillers play a crucial role in climate control for various applications, and the market is being driven by the need for systems that optimize energy consumption, reduce greenhouse gas emissions, and comply with stringent energy efficiency standards. The push towards sustainable and eco-friendly practices has accelerated the adoption of chillers with advanced technologies, such as variable speed compressors and smart control systems that enhance overall energy efficiency. • Rapid Urbanization and Infrastructure Development: The global trend of urbanization and infrastructure development, particularly in emerging economies, is a significant driver for the chiller market. As more commercial buildings, data centers, healthcare facilities, and industrial complexes are constructed, the demand for effective and scalable cooling solutions rises. Chillers are essential for maintaining comfortable indoor environments, preserving sensitive equipment, and ensuring the efficiency of industrial processes. The increasing construction of smart cities and green buildings further propels the demand for modern and sustainable chiller systems. Market Challenges

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• Stricter Environmental Regulations and Refrigerant Phase-Outs: The chiller industry faces challenges related to environmental regulations and the phase-out of refrigerants with high global warming potential (GWP). Governments and international bodies are implementing stringent guidelines to curb the use of substances harmful to the ozone layer and the climate. As a result, manufacturers must invest in research and development to design chillers that use low-GWP or natural refrigerants, complying with evolving regulatory standards. This transition poses technical and economic challenges, requiring innovation and adaptation within the industry. • Initial Cost Barriers and Return on Investment Concerns: While energy-efficient chillers offer long-term savings in operational costs, the initial investment required can be a barrier for some potential customers. High-efficiency chillers often come with a higher upfront cost, leading to concerns about return on investment (ROI). The challenge for the chiller market is to communicate and demonstrate the long-term economic and environmental benefits of investing in advanced, energy-efficient systems. Overcoming these cost barriers involves educating stakeholders about the lifecycle cost advantages and potential energy savings associated with modern chiller technologies. Market Trends • Adoption of Smart Chiller Systems and IoT Integration: The integration of smart technologies and the Internet of Things (IoT) is a prominent trend in the chiller market. Smart chiller systems leverage real-time data, analytics, and remote monitoring to optimize performance, predict maintenance needs, and enhance overall efficiency. The ability to connect chillers to building management systems or cloud platforms enables proactive management, reducing downtime and improving energy utilization. This trend aligns with the broader development of smart buildings and Industry 4.0, where connectivity and data-driven insights play a central role. • Focus on Sustainable Refrigerants and Environmental Responsibility: The chiller market is experiencing a shift towards sustainable refrigerants and environmentally responsible practices. With increased awareness of climate change and environmental impact, there is a growing emphasis on adopting natural refrigerants and low-GWP alternatives. Manufacturers are investing in research to develop chillers that minimize their carbon footprint and comply with evolving regulations. This trend is not only driven by regulatory requirements but also by consumer preferences for environmentally friendly and socially responsible products, influencing purchasing decisions across various industries.

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Air-cooled chillers are leading in the chiller market due to their flexibility and ease of installation, requiring no external water source for cooling. Air-cooled chillers have emerged as the preferred choice in the chiller market for several reasons. One primary factor is their inherent flexibility and ease of installation. Unlike water-cooled chillers, which necessitate access to a reliable water source for cooling, air-cooled chillers do not require external water connections. This characteristic makes them highly versatile and suitable for a wide range of applications, especially in areas where water availability or quality may be limited. Furthermore, the installation process for air-cooled chillers is typically simpler and less costly compared to water-cooled counterparts. Without the need for complex water piping systems or cooling towers, installation time and expenses are significantly reduced. This makes air-cooled chillers an attractive option for both new construction projects and retrofitting existing facilities. Moreover, air-cooled chillers offer operational advantages, particularly in terms of maintenance and reliability. Since they do not rely on external water sources, there is less risk of issues related to water quality, such as corrosion or fouling. Additionally, air-cooled chillers tend to have fewer components and moving parts, resulting in lower maintenance requirements and reduced downtime. Another key benefit of air-cooled chillers is their ability to provide precise temperature control, making them suitable for applications where maintaining consistent temperatures is critical, such as in data centers, medical facilities, and industrial processes. With advancements in compressor technology and control systems, modern air-cooled chillers can achieve high levels of efficiency and performance, further solidifying their position as leaders in the chiller market. Screw chillers are leading in the chiller market due to their high energy efficiency, reliability, and adaptability to varying loads, making them ideal for a wide range of commercial and industrial cooling applications. The dominance of screw chillers in the chiller market can be attributed to their exceptional energy efficiency, reliability, and versatility. One of the primary reasons behind their leading position is their superior energy performance, which stems from the unique design of the screw compressor. Screw compressors are known for their efficiency across a wide range of operating conditions, offering consistent performance even at partial loads. This makes screw chillers particularly well-suited for applications with varying cooling demands, providing energy savings and operational cost benefits. Reliability is another key factor contributing to the popularity of screw chillers. The robust construction and fewer moving parts of screw compressors enhance their durability and reduce the likelihood of mechanical failures. This reliability is crucial for maintaining uninterrupted cooling in critical applications, such as data centers, hospitals, and industrial processes, where downtime can have significant consequences. Screw chillers also excel in adaptability to varying loads, making them highly versatile. The ability to modulate capacity efficiently allows screw chillers to match the cooling demand precisely, resulting in optimal energy usage. This modulation capability, often achieved through variable-speed drive technology, enhances overall system efficiency and contributes to the chiller's ability to handle fluctuating loads efficiently. Additionally, screw chillers are available in a wide range of capacities, making them suitable for both small-scale and large-scale applications. This flexibility, combined with the ease of integration into existing systems, positions screw chillers as a preferred choice for diverse cooling requirements in commercial, institutional, and industrial settings. The commercial application is leading in the chiller market due to the increasing demand for air conditioning and cooling solutions in commercial spaces, driven by urbanization, rising disposable incomes, and a focus on creating comfortable and energy-efficient environments. The dominance of commercial applications in the chiller market can be primarily attributed to the growing need for effective air conditioning and cooling solutions in various commercial spaces. As urbanization continues at a rapid pace, commercial buildings such as offices, shopping malls, hotels, and restaurants are becoming increasingly prevalent. This surge in commercial infrastructure, coupled with a rise in disposable incomes, has led to a significant increase in the demand for indoor comfort and climate control. In commercial settings, maintaining a comfortable and conducive environment for occupants is essential for productivity, customer satisfaction, and overall well-being. Chilled water systems, particularly chillers, play a crucial role in providing reliable and efficient cooling for large-scale commercial spaces. The scalability and flexibility of chiller systems make them well-suited for meeting the diverse cooling demands of commercial buildings, ranging from small retail establishments to expansive office complexes. Furthermore, the emphasis on energy efficiency and sustainability in commercial applications has driven the adoption of advanced chiller technologies. Modern commercial buildings are increasingly designed with green building standards in mind, and energy-efficient HVAC (Heating, Ventilation, and Air Conditioning) systems, including chillers, are integral to achieving these goals. The commercial sector's commitment to creating environmentally friendly and energy-efficient spaces further contributes to the prominence of chiller systems within this market segment. The rising awareness of the environmental impact of cooling systems has also led to the implementation of regulations and standards promoting energy-efficient technologies in commercial applications. This has accelerated the adoption of high-efficiency chillers, such as those with variable frequency drives and environmentally friendly refrigerants, in an effort to reduce carbon footprints and operating costs. Asia-Pacific accounted for the largest share in terms of volume and value of the chillers market in 2023. The use of chillers is expected to witness the highest growth in the Asia-Pacific region during the forecast period. Asia Pacific region stands as the second-largest hub for data centers, driven by robust growth that not only enhances revenue but also generates fresh opportunities within the sector. The scale of data centers in Asia Pacific is expanding, with operators actively exploring new markets for potential expansion. This strategic move is in anticipation of rising demand fueled by ongoing digitization and the broader adoption of artificial intelligence. Factors such as improving economic conditions, rapid industrialization, and commercialization are anticipated to have a positive impact on the market growth. India is the significant market for manufacturing process and one of the largest consumers of chillers in the world. The focus of Indian government towards make in India project will drive the construction industry in India which will further enhance the demand of chillers during the forecast period in the country. Asia-Pacific region includes China, Japan, India, South Korea and Australia, and rest of Asia-Pacific. Asia-Pacific has a rapidly growing chemical industry, owing to expansion strategies adopted by various private and public players. For instance, in November 2021 India, Indian Oil Corporation (IOCL) announced its plan to build India's first mega-scale maleic anhydride facility for producing high-value specialty chemicals at its refinery in Haryana, at a cost of $495.2. Furthermore, Asia-pacific has the fastest growing manufacturing industry in the world. All such instances are anticipated to provide lucrative opportunities for the chillers market growth. The cost-effectiveness and ease of installation has resulted in popularity of Chillers in China’s industrial sector. Moreover, the increase in construction projects in Asia is expected to drive the chillers market over the forecast period. The increasing demand from the rise in investments in data centers is expected to result in the growth of chillers market. For instance, in 2019, Equinix a Californian data center provider formed a joint venture of USD 1 billion with Singapore based GIC to operate and build hyper scale data centers in Europe. Furthermore, in 2019, the Australian based property developer Lendlease entered into partnership of USD 1 billion with an institutional investor to build data centers in Asia Pacific. The global market is highly competitive on account of the presence of global and local manufacturers. Companies are engaged in expansion through mergers & acquisitions and joint ventures. These companies offer a wide range of systems that are sold through multiple channels, including distributors, company-owned websites, retailers & their websites, and e-commerce websites. For instance, in May 2023, Trane acquired MTA, an Italian manufacturer and distributor specializing in industrial refrigeration and air conditioning equipment. This strategic acquisition is expected to enhance Trane's commercial HVAC capabilities, particularly in key markets, by incorporating MTA's process chillers and expanding the rental and services business. With manufacturing sites located in Tribano and Conselve and a workforce of approximately 500 employees, MTA has an annual production capacity of 13,500 systems. Market growth stage is medium, and pace of the market growth is accelerating. The chillers market is characterized by highly consolidated owing to presence of several established players, which makes it difficult for small-scale manufactures to compete with global players. The market is also characterized by a high degree of product innovation, for instance, many manufacturers are developing chillers that use low GWP refrigerants, such as HFOs or natural refrigerants like CO2. Chiller systems are becoming more intelligent and energy-efficient with advancements in technology. • On February 23, 2023, Daikin launched the second generation cooling only chiller range with R32 scroll blowers. Daikin's second generation of R32 cooling-just chillers conveys high full- and part-load efficiencies with an expanded limit range up to 1,010 kW (contrasted with the current 704 kW) inside a new, minimized impression offering a decreased size of 275 mm. • On February 10, 2023, the YORK YLAA Air-Cooled Scroll Chiller, manufactured by Johnson Controls, became the first air-cooled scroll chiller in the U.S. to utilize the refrigerant R-454B. Additionally, the YORK YVFA Free-Cooling, Variable-Speed Screw Chiller, manufactured by Johnson Controls, became the first free-cooling screw chiller in the U.S. to utilize the refrigerant R-1234ze. Both of these products aim to improve performance. • On October 12, 2022, Mitsubishi Electric launched the latest air-source chillers and heat pumps, which were developed at the company's Italy-based facility. The MECH-iS-G07 air-cooled chiller and the MEHP-iS-G07 air source reversible heat pump have been included in the new range. Seven sizes of the new range of scroll compressors with variable speeds are available. Additionally, each system is available in three modules with a cooling capacity of 50 to 220 KW. • In December 2022, Trane unveiled its latest offerings, the water-cooled XStream eXcellent GVWF and air-cooled Sintesis eXcellent GVAF chillers. These innovative chillers incorporate magnetic-bearing compressors and utilize the low global warming potential (GWP) refrigerant R1234ze. Equipped with high-speed centrifugal compressor technology, these chillers deliver larger capacities, wider operating maps to meet challenging European climate conditions, and enhanced seasonal efficiencies, all while maintaining a compact size. Considered in this report • Historic year: 2018 • Base year: 2023 • Estimated year: 2024 • Forecast year: 2029 Aspects covered in this report • Chillers market Research Report with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By Product Type • Air Cooled Chiller • Water Cooled Chiller By Type • Screw Chiller • Scroll Chiller • Centrifugal Chiller • Others By End User • Commercial • Industrial The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Chillers industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.