Variable Refrigerant Flow (VRF) Systems Market by Component (Outdoor Units, Indoor Units, Control Systems & Accessories), by Compressor Unit (Air-Cooled Unit, Water-Cooled Unit), by System Type (Heat Pump Systems [Air-Source, Ground-Source, Absorption], Heat Recovery Systems), by Application Area (Commercial, Residential), by Geography (U.S., Canada, U.K., Germany, Russia, Italy, France, Turkey, China, Japan, India, South Korea, Australia, Brazil, Mexico, U.A.E., South Africa) – Global Market Size, Share, Development, Growth, and Demand Forecast, 2013–2023

  • Published: July 2018
  • Report Code: SE11322
  • Available Format: PDF
  • Pages: 152

VRF Systems Market Overview

The global VRF systems market was valued at $11,400.7 million in 2017 and is forecasted to witness a CAGR of 13.4% during 2018–2023. Rising demand for energy-efficient heating, ventilation, and air conditioning (HVAC) solutions and growing construction industry, along with government initiatives to ease FDI norms in the real estate sector, are the key factors driving the growth of the VRF systems industry. VRF systems refer to air conditioning systems that consist of two major components: outdoor units and indoor units. These systems use in-built heat exchangers for heating and cooling applications.


Geographically, APAC was the largest VRF systems market during the historical period, with a revenue share of 63.2% in 2017. The market growth in APAC can be attributed to the presence of a large number of key manufacturers in the region and the high adoption of these systems in buildings, offices, and hospitals. Besides, growing construction activities, rising demand for smart devices to handle VRF HVAC systems, and increasing population and urbanization have spurred the demand for these systems in the region.

Although the use of VRF HVAC systems in North America and Europe is much less than that in APAC, the demand for these systems is increasing at a rapid pace in the U.S., with major manufacturers in the country offering innovative solutions. Due to this, the fastest growth in the VRF systems market during the forecast period is expected in North America.

Among countries, China, Japan, and South Korea are the early adopters of the VRF technology. China, which is the largest developing country in the world, experiences a varied climate, which creates the need for effective heating and cooling solutions in the country. Rapid economic development and increased standard of living have led to the new wave of building construction in the country. This growth in the construction industry has directly impacted the energy consumption in the country. The country contributed the largest revenue share to the global VRF systems market in 2017, accounting for 25%.

VRF Systems Market Dynamics


Increased open-network compatibility of VRF control systems and polarization of VRF HVAC systems are some of the key trends observed in the VRF systems market. In recent years, specialized instrument manufacturers have introduced user-friendly control systems (featuring LCD touch screens) that combine central air conditioning and VRF to control central air conditioning systems.


The surging demand for energy-efficient HVAC systems is one of the major factors driving the demand for VRF HVAC systems, globally. These systems are energy-efficient, as they feature a smart variable-speed compressor that runs only at the capacity that is needed at a given temperature condition. Besides, these systems allow simultaneous heating and cooling of different zones. Also, these systems are designed to capture heat while cooling and reuse it in other areas requiring heating.

Due to this, systems with variable-speed compressors and compatibility at partial-load conditions endure less wear and tear and fewer breakdowns, resulting in reduced downtime. Hence, VRF HVAC systems are high in demand where zoning is required. Reduced efficiency loss and high energy-saving capabilities of these systems make them a viable option for customers.


High installation cost, specific installation requirements, and design complexities are some of the key issues hindering the growth of the VRF systems market. VRF pipework and specific installation requirements, which vary based on systems offered by different manufacturers, make the installation a complex, tedious, and costly affair. Furthermore, the life expectancy of a VRF system depends on its installation, which is the most complex step in the whole process. Though the installation process is flexible in terms of connecting multiple indoor units to a single condensing unit, if done in an improper manner, the overall functioning of the system may get affected.


Increased deployment of VRF HVAC systems in high-rise buildings is expected to offer lucrative opportunities to the players in the VRF systems market. The deployment of these systems in high-rise buildings is increasing on account of the flexibility and low-utility-cost benefits these systems offer. However, with multiple tenants, an inefficiently designed traditional HVAC system may result in poor air quality, high costs, and inconsistent airflow. To fulfill the varied needs of multiple tenants, VRF systems offer personalized control and flexibility in installation, in addition to eliminating the need for water piping.

HVAC systems based on the VRF technology provide solution to the issue of mechanical space requirements in high-rise buildings by providing a single condenser unit that multiple users can deploy, thereby working like an efficient ductless multi-split system. Moreover, the deployment of these systems in high-rise buildings results in energy savings, which, in turn, encourages their adoption, considering the long-term benefits associated with their usage.

VRF Systems Market Competitive Landscape

The intensity of rivalry in the VRF systems market is moderate. Most of the major vendors in the market are actively focusing on facility expansion to meet the growing demand in the emerging markets. Daikin Industries, Ltd., Johnson Controls International Plc, and Emerson Electric Co. are some of the major players seeking facility expansion in the market.

Some of the key players operating in the VRF systems market are Emerson Electric Co., United Technologies Corporation, Daikin Industries Ltd., Johnson Controls International Plc, Schneider Electric SE, Toshiba Corporation, LG Electronics Inc., Fujitsu Ltd., Mitsubishi Electric Corporation, and Media Group Co. Ltd.

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