LONDON — The global HVAC insulation market is forecast to grow at a compound annual growth rate (CAGR) of over 7 percent from 2016 to 2020, according to a report by Technavio. The research study covers the present scenario and growth prospects of the HVAC insulation market. The report lists foamed plastics, wool, and others as the three main segments based on type of material. The foamed plastics segment accounted for over 52 percent of the market in 2015 followed by wool with over 38 percent and others with over 9 percent of the market share.
“Increased construction activities in the Asia-Pacific region and the growing need for HVAC insulation replacements in developed countries such as the U.S. and the UK are the key driving forces of the market,” according to Anju Ajaykumar, a lead analyst at Technavio.
Technavio analysts highlight the following three factors that are contributing to the growth of the global HVAC insulation market:
- Increased construction activities
- Accelerating demand for HVAC equipment
- Changing requirements for certification
INCREASED CONSTRUCTION ACTIVITIES
The growth of the construction industry plays a significant role in boosting the global HVAC insulation market. New construction in the residential, commercial, and industrial sectors has increased demand for HVAC systems, cumulating into demand for HVAC insulation to improve building efficiency. Innovations in building design and increased focus on energy efficiency for buildings has created an opportunity for HVAC insulation manufacturers to expand their foothold in the market.
Government regulations introduced by various countries worldwide compel HVAC insulation vendors to comply with industry standards. For instance, the Commercial Building Disclosure outlined by the Australian government requires building owners selling or leasing office space larger than 2,000 square meters to comply with energy efficiency standards. This, in turn, encourages the installation of efficient HVAC insulation.
ACCELERATING DEMAND FOR HVAC EQUIPMENT
The global demand for HVAC equipment is forecast to increase by 6.6 percent annually and reach $129 billion by 2020. In the U.S. and Europe, growing concerns about energy consumption and carbon emissions will drive the need for HVAC insulation. In developing countries, such as China, the growing need for air quality monitoring systems is likely to boost HVAC market growth, mainly to prevent the increase in respiratory diseases due to the rampant pollution.
“The rise in the deployment of HVAC equipment in commercial, domestic, and industrial buildings will create more demand for efficient and effective insulation systems. HVAC accounts for nearly 40 percent of the electricity used in commercial buildings. Therefore, improved insulation will significantly reduce energy consumption, increase return on investment (ROI), and reduce energy costs,” says Ajaykumar.
CHANGING REQUIREMENTS FOR CERTIFICATION
The need to reduce energy consumption has led to governmental intervention in the form of initiatives like Energy Star labels that introduce energy certification for various products to aid in reducing power consumption. An Energy Star product is about 30 percent more efficient than a non-labeled product, thus saving on energy consumption.
Apart from the Energy Star program, LEED (Leadership in Energy and Environmental Design) is another such program that is recognized in 150 countries worldwide. LEED-certified buildings use less water and energy with low levels of greenhouse gas (GHG) emissions and save energy costs. The adherence to these programs will help drive investments in HVAC insulation, which augurs well for the growth of the market.
For more information, visit Technavio.
Publication date: 12/19/2016