U.S. Split Units Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

U.S. Split Units Market Trends and Growth Drivers

Adoption of Inverter Technology Is Key Market Trend

• The adoption of split ACs with the inverter technology is a key trend in the U.S., as it makes split units more suitable and reliable.
• Additionally, these units have the binary on/off mechanism, and they use variable-speed compressors, which make them preferred in locations with regular power cuts.
• Furthermore, these systems are quieter than the standard split ACs, thereby increasing comfort and offering advantages in low-noise areas, such as residential colonies, schools, libraries, and hospitals.
• Power consumption decreases with the use of inverter split ACs.
• The inverter technology converts DC power to AC, which helps in increasing energy efficiency and decreasing electricity bills.
• Moreover, inverter-driven split systems come with modern microprocessors, which help take temperature readings from various parts of the room.
• This helps in providing uniform cooling across the room.

Rise in Housing Development Is Key Market Driver

• With the rise in the population, infrastructure development is picking up.
• People are moving to the country from around the world for better employment opportunities and education.
• Over 80% of the population of the country lives in cities, making the U.S. one of the most-urbanized nations in the world.
• With the growth in the number of built structures in cities, there is an increasing need for efficient cooling solutions, such as split air conditioners.
• In 2023, the federal government directly funded construction projects worth USD 44.8 billion and distributed an additional USD 81.5 billion to states.
• These units provide optimal climate control, while occupying minimal space, which makes them popular in smaller spaces, which are becoming the norm in cities.
• Furthermore, many historical buildings in the country are being renovated with modern amenities, to attract tourists.
• Split units are a good fit for these buildings as they were not designed for central air conditioning.
• Additionally, developers are focusing on green building practices, due to which there is a rise in the adoption of energy-efficient technologies, especially in commercial and residential buildings.
• The Energy Star ratings and the LEED certification are highly sought-after by both real estate developers and building owners.
• As per studies, there are over 124,000 green-certified buildings in the U.S., the most anywhere in the world.
• Split units provide a reliable solution for the same by producing a low carbon footprint, by consuming less power.

Regulatory Compliance Is Key Market Challenge

• Regulatory compliance, such as the mandates for energy efficiency, consumer safety, and environmental sustainability, act as the key market challenges.
• With the rise in global warming levels, the Government of the U.S. is mandating strict compliance for split units.
• This means that the units that do not comply will either need to be overhauled or replaced, both of which will be expensive.
• In February 2024, the Department of Energy announced new regulations, SEER2, which state that the minimum efficiency should increase by 8–10%.
• This means that roughly 70% of the current products in usage fail to meet these new guidelines.
• Moreover, there are now mandates for using cleaner and low-GWP refrigerants, such as ammonia and CO2.
• Compliant systems consist of an array of smart controls, which will require a high initial investment.
• This means that their adoption could be limited to major commercial and industrial entities.

U.S. Split Units Market Analysis

By Type

• The ductless category holds the largest market share, of 45%, in 2024, due to the ease of installation of ductless split systems, unlike centralized HVAC systems, which require extensive ductwork.
• Additionally, the time and cost required for the installation of ductless systems are less in comparison to other types of split units. Due to this, the former are a good fit for retrofitting older buildings.
• Furthermore, ductless systems boast low energy consumption, which makes them both environment-friendly and cost-effective in the long run.
• The VRF category will grow at the highest CAGR during the forecast period, attributed to the less space required for them and their quiet operations.
• They are suitable for noise reduction in critical zones, such as hospitals, schools, and high-end residential properties.
• They are also 30% more energy-efficient than conventional systems as they have no ducts.

The types analyzed in this report are:

• Ductless (Largest Category)
• VRF (Fastest-Growing Category)
• Centralized
• Others

By Capacity

• The 2–4 tons category holds the largest market share, of 50%, in 2024, due to the extensive use of these models in both the commercial and residential sectors.
• Split units with a refrigeration capacity of 2–4-tons are versatile, most affordable, and suitable for multi-room applications in homes and small commercial setups.
• The more than 4 tons category will grow at the highest CAGR due to the increasing number of large infrastructure projects under development in the U.S.
• This infrastructure development is driving the demand for cooling solutions with a capacity of more than 4 tons.
• These projects include large shopping malls, hospitals, theaters, indoor stadia and performance arenas, museums, universities and schools, and government buildings.

The capacities analyzed in the report are:

• Less than 2 Tons
• 2–4 Tons (Largest Category)
• More than 4 Tons (Fastest-Growing Category)

Installation Insights

• The wall-mounted category holds the largest market share, of around 80%, in 2024.
• Wall-mounted units are widely adopted in the residential sector due to their low cost, easy installation, and compact design.
• On average, a wall-mounted split AC costs USD 1,000, with installation charges between USD 60 and USD 200.
• In contrast, the price of a ceiling-mounted variant starts at USD 4,500 with installation, and it could go up to USD 20,000, depending on the number of zones.
• The ceiling-mounted category will grow at the highest CAGR during the forecast period.
• This growth is due to the rising demand for these systems from commercial buildings, such as offices and retail stores; and high-end residential properties.
• Essentially, the rise in the construction of large buildings in the country drives the demand for ceiling-mounted units as thy offer a better cooling coverage and air distribution for larger areas.

Based on installation, the market has the following categories:

• Wall-Mounted (Largest Category)
• Ceiling-Mounted (Fastest-Growing Category)
• Floor-Standing

End User Insights

• The residential sector holds the largest market share, of 55%, in 2024 as split units are an economical option for individual houses and apartments.
• The high rate of urbanization has led to the development of compact houses and apartments, which heavily rely on split units.
• The commercial sector will grow at the highest CAGR during the forecast period.
• This growth is attributed to the fast expansion of the commercial infrastructure, including office buildings, retail outlets, restaurants, and hospitality spaces.
• For these spaces, split units act as a cost-effective alternative to central HVAC systems.

Based on end user, the market has the following categories:

• Residential (Largest Category)
• Commercial (Fastest-Growing Category)
• Industrial

Distribution Channel Insights

• The offline channel holds the larger market share in 2024.
• Conventional sales channels, such as retail stores, specialty HVAC dealers, and wholesalers, dominate the market due to the established trust and customer interaction and strong relationship with contractors and builders.
• Additionally, the local presence and immediate availability of products at these stores make them popular.
• The online channel will grow at the higher CAGR during the forecast period, attributed to the rise in the rate of digitalization.
• Online channels provide consumers with a large number of choices with detailed product specifications, user reviews, and pricing information.
• The U.S. Census Bureau recorded USD 300.1 billion worth of e-commerce retail sales in the country in 2024 third quarter, which was 2.6% more than the second quarter.

The distribution channels analyzed in this report are:

• Online (Faster-Growing Category)
• Offline (Larger Category)

Regional Analysis

• The southern region holds the largest market share, of 35%, in 2024, and it will grow at the highest CAGR during the forecast period.
• This is attributed to the warmer climate of this region than others in the country, due to its location in the tropical and subtropical zones.
• The climate map of the U.S. Centers for Environmental Information makes it clear that Texas, Florida, Alabama, Georgia, Louisiana, Mississippi, Arkansas, South Carolina, North Carolina, Kentucky, Tennessee, Maryland, Delaware, Virginia, and Oklahoma witness significantly higher average temperatures than other states.
• Furthermore, a large number of construction activities are underway in this region as it is highly populated.
• Among the 10 most-populated states in the country are Florida, Georgia, Texas, and North Carolina, all of which lie in the south.

The regions analyzed in this report are:

• Northeast
• Midwest
• West
• South (Largest and Fastest-Growing Region)

U.S. Split Unit Market Share

The market nature of the U.S. split units’ market is consolidated as most of market share is held by the major industry players, such as the LG Electronics, Daikin Industries, Mitsubishi Electric, and Johnson Controls.

Additionally, the entry of the new players in the market for split units is difficult as a high initial capital investment is required for setting up a new business. The manufacturing of split units and research and development are also expensive, which makes it difficult for smaller and new companies to survive.

The entry of new players is further restricted by the energy-efficiency regulations and standards set by the U.S. Department of Energy and Environmental Protection Agency (EPA).

U.S. Split Unit Market Companies News

• In November 2024, Carrier Global Corporation and Pelaburan Hartanah announced a collaboration to improve energy efficiency.
• In March 2024, Trane Technologies plc announced a new portfolio of residential HVAC solutions with smart controls, low-GWP refrigerants, and energy-efficient variable-speed compressors.
• In July 2023, Daikin Industries Ltd. introduced the Emura indoor climate management system, which is designed to purify air and cool interior spaces efficiently.
• In March 2023, LG Electronics Inc. introduced a new 2023 range of DUALCOOL inverter air conditioners. The new product range is equipped with AI +, Plasmaster Ionizer++, Hot & Cold, and LG ThinQ (WIFI AC’s).