Chiller Market Overview
The global chiller market was valued at $7.1 billion in 2018 and is anticipated to register a CAGR of 4.9% during 2019-2024. Factors such as increasing construction activities predominantly due to upcoming events such as Qatar FIFA World Cup 2022, Dubai Expo 2020, and FIFA World Cup 2026 as well as replacement of conventional chillers is projected to drive the market over the forecast period.
Based on type, the chiller market is segmented into screw, scroll, centrifugal, reciprocating, and absorption, of which the screw chiller category witnessed the highest revenue share in 2018. APAC and North America; predominantly in the U.S., and China; recorded the largest revenue share, respectively in 2018, owing to increased hotel construction projects. On the other hand, the absorption chiller category has gained traction in recent years which is primarily attributed to the use of solar power and waste energy to power the chiller plants.
Absorption chiller is further segmented into steam, hot water, and direct-fired chillers, of which the steam absorption chiller category registered the majority of the revenue share in 2018. Steam absorption chillers have gained popularity in the industrial sector including chemical, oil & gas, and energy and utilities. In the MEA region, this trend is growing at a substantial rate. Also, the use of solar plants to supply absorption chiller with hot water for cooling applications at little or no additional cost is anticipated to drive the growth of the absorption chiller market in the coming years.
Based on end-user, the market is divided into commercial, residential, and industrial where commercial held the largest share of the chiller market in 2018. Increasing construction activities in the hospitality and transportation sectors is the major reason for the growth of this category. Transportation end-user stood at the top of the heap accounting for around 30% of the chiller market. The rising number of airports and railway construction projects is driving the demand for chillers in the transportation application.
Based on the region, APAC registered increased demand for chillers in 2018, with China attributing to majority of the market share. China recorded substantial growth in its construction expenditure and is poised to exhibit significant growth in the coming years as well. Furthermore, cities such as Shanghai and Wuhan are expected to embark on the largest construction projects, further driving the demand for chillers.
Chiller Market Dynamics
Rising temperature due to global warming is driving the growth of the chiller market across the globe. Presently, with increasing greenhouse gases in the atmosphere, more infrared energy released by the surface ends-up being absorbed by the atmosphere resulting in increased temperatures. For instance, as per The National Aeronautics and Space Administration (NASA), the global average temperature in 2017 was around 0.90O Celsius warmer relative to the 1951-1980 average temperatures. Hence, increasing global temperature is fueling the demand for cooling systems across the globe, which is further supporting the growth of the market.
The adoption of R32 refrigeration has been observed to be one of the key trends in the global chiller market owing to the enhanced operational efficiency. As R32 refrigerant efficiently conveys heat, it would reduce energy consumption around 10% as compared to that of chillers using refrigerant R22. In addition, compared to the refrigerants such as R22 and R410A, R32 chillers have very low Global Warming Potential (GWP), which helps to reduce the emission of greenhouse gases in the atmosphere. Moreover, R32 chillers have a significantly higher volumetric cooling capacity than other types of refrigerants, which would help to reduce the system pipe size and increase the efficiency of chillers. Hence, owing to the growing demand for eco-friendly, and energy-efficient cooling systems, R32 chiller is trending in the chiller market.
Alternative cooling technologies like variable refrigerant flow (VRF) system is likely to hinder the growth of the chiller market. VRF systems are capable of providing simultaneous heating and cooling during the single mode of operations. In addition, VRF systems are easy to install and need fewer connections, resulting in a lower cost of installation. Also, as VRF systems transfer the energy from cooling zones to heating zones of the building, these systems are more energy efficient than air or water-cooled chiller systems.
In addition, the VRF system has a greater ability to provide consistent heating or cooling as compared to chillers. VRF monitors each zone of the house and sends the right amount of heated or cooled air in order to maintain the temperature. As a result, demand for VRF systems are increasing and it is likely to restrain the growth of the chiller market in the coming years.
Chiller Market Competitive Landscape
Competition in the chiller market is moderately high owing to the presence of numerous manufacturers. The market is primarily characterized by four companies namely Johnson controls International PLC, United Technologies Corporation, Ingersoll-Rand plc, and Daikin Industries Ltd.
Some of the major players in the global chiller market include Johnson Controls International PLC, Samsung Electronics Co. Ltd., Ingersoll-Rand plc, United Technologies Corporation, Daikin Industries Ltd., Gree Electric Appliances, Inc. of Zhuhai, Zamil Air Conditioners, Thermax Limited, Mitsubishi Electric Corporation, Petra Engineering Industries Co, S.K.M Air Conditioning LLC, and Danfoss A/S.