Europe HVAC Equipment Market Size, Share, Industry Trends, and Growth Forecasts, 2026-2031 | Heat-Pump Incentives, Boiler Retrofits, and Electrification Drive 6.05% CAGR

Europe HVAC Equipment Market Size, Share, Industry Trends, and Growth Forecasts, 2026-2031 | Heat-Pump Incentives, Boiler Retrofits, and Electrification Drive 6.05% CAGR Dublin, Nov. 04, 2026 (GLOBE NEWSWIRE) -- "Europe HVAC Equipment - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)" has been added to ResearchAndMarkets.com's offering.

European HVAC Equipment Market to Reach USD 43.32 Billion by 2031 as Electrification and Efficiency Mandates Accelerate

The European HVAC equipment market is estimated at USD 32.29 billion in 2026, up from USD 30.45 billion in 2025. The market is projected to reach USD 43.32 billion by 2031, expanding at a 6.05% CAGR during 2026-2031. Growth is being supported by energy-efficiency regulations, building decarbonization programs, aging boiler replacements, rising cooling requirements, and increased investment in heat-pump technology.

EU Green Deal Measures Reshape HVAC Equipment Demand

Mandatory minimum-efficiency standards and EUR 56 billion (USD 65.57 billion) in heat-pump incentives introduced across Europe in 2024 are transforming equipment demand. Germany recorded a 60% year-over-year increase in heat-pump installations, reaching 43,000 units in Q1 2025. Air-to-water model sales climbed from 22,000 to nearly 38,000 units, reflecting policy support for systems that integrate with existing hydronic heating infrastructure.

Despite reduced Dutch ISDE rebates in 2025, the Netherlands continues to target heat-pump installations in 20% of homes by 2030. This objective supports sustained market expansion and reinforces the broader transition away from fossil-fuel heating. HVAC manufacturers are responding with natural-refrigerant systems, improved part-load efficiency, and financing options intended to reduce upfront purchasing barriers.

Aging Boiler Stock Strengthens Retrofit and Replacement Activity

Approximately 130 million legacy boilers across Europe are approaching replacement as gas prices remain volatile and carbon penalties become more stringent. Retrofit-oriented heat-pumps designed to work with existing hydronic circuits can reduce installation times and improve contractor productivity. This compatibility is strengthening replacement demand, including in countries where new construction remains limited.

Air-to-water heat pumps continue to lead heating retrofit projects because they can operate with existing radiators and support national fossil-fuel phase-out targets. Hybrid boiler-pump systems are also gaining adoption as transitional options in colder regions where property owners require additional heating resilience.

High Initial Costs Remain a Market Constraint

Heat-pump systems can cost 3-5 times more than a conventional boiler replacement, limiting adoption among lower-income households, particularly in Eastern Europe and rural communities. Although subsidies can reduce total costs, complex financing applications and administrative requirements may extend sales cycles. In areas with lower disposable income, publicly funded social-housing programs are expected to remain an important source of HVAC equipment demand.

Additional factors influencing the European HVAC equipment market include:

Ground-Source Heat Pumps Record the Fastest Growth

Ground-source heat pumps are forecast to register the fastest 9.78% CAGR through 2031. Institutional customers are increasingly selecting geothermal solutions because of their higher seasonal efficiency and longer operating life, which can justify drilling costs that many residential buyers avoid. Favorable geology in Nordic countries is also supporting multi-megawatt campus-scale projects.

Air-conditioning and ventilation equipment held the largest market share at 57.95%. Demand across this category is benefiting from warmer summers, indoor air-quality priorities, commercial building upgrades, and the modernization of ventilation infrastructure. New natural-refrigerant platforms are also helping suppliers comply with F-Gas regulations while improving system efficiency. Daikin's R-290 modular platform, introduced in March 2025, illustrates the industry's shift toward lower-impact refrigerants and electrified heating solutions.

Public Buildings Lead End-User Growth

Residential customers accounted for 46.80% of European HVAC equipment sales in 2025. However, public and institutional buildings, including schools, hospitals, and government facilities, are projected to achieve the highest CAGR of 10.05% through 2031. Decarbonization budgets are funding large-scale retrofits that combine heat pumps with demand-controlled ventilation and digital energy management.

Institutional projects generally have longer procurement cycles but deliver substantial equipment volumes. This is encouraging suppliers to provide energy-as-a-service agreements that combine HVAC equipment, maintenance, monitoring, and performance optimization. Commercial offices are generating steady demand as landlords pursue ESG goals, while industrial facilities are evaluating process heat recovery and electrified heating applications.

Overall, the European HVAC equipment market is moving from gas-fired systems toward efficient, connected, and electrified technologies. Regulatory support, replacement demand, climate-related cooling needs, and public-sector investment are expected to sustain market growth through 2031, while affordability and supply-chain pressures remain key challenges.

Key Topics Covered:

1 INTRODUCTION

1.1 Study Assumptions and Market Definition

1.2 Scope of the Study

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET LANDSCAPE

4.1 Market Overview

4.2 Impact of Macroeconomic Factors

4.3 Market Drivers

4.3.1 EU Green-Deal efficiency mandates and heat-pump subsidies

4.3.2 Accelerating replacement of ageing boiler stock

4.3.3 Intensifying summer heatwaves boosting residential AC uptake

4.3.4 Rapid electrification of commercial HVAC retrofits

4.3.5 Propane (R290) heat-pump launches post-F-Gas revision

4.3.6 Scale-up of installer-training programs unlocking latent demand

4.4 Market Restraints

4.4.1 High upfront capex versus gas boilers

4.4.2 Supply-chain and commodity-price inflation

4.4.3 Skilled-labour bottlenecks delaying installations

4.4.4 OEM re-tooling risk amid refrigerant transition uncertainty

4.5 Industry Value Chain Analysis

4.6 Regulatory Landscape

4.7 Technological Outlook

4.8 Porter's Five Forces Analysis

4.8.1 Bargaining Power of Suppliers

4.8.2 Bargaining Power of Buyers

4.8.3 Threat of New Entrants

4.8.4 Threat of Substitute Products

4.8.5 Intensity of Competitive Rivalry

5 MARKET SIZE AND GROWTH FORECASTS (VALUE)

5.1 By Equipment

5.1.1 Air-Conditioning / Ventilation Equipment

5.1.1.1 Single-Split and Multi-Split Units

5.1.1.2 Variable Refrigerant Flow (VRF) Systems

5.1.1.3 Air-Handling Units (AHU)

5.1.1.4 Chillers

5.1.1.5 Fan-Coil Units

5.1.1.6 Packaged / Rooftop Units

5.1.1.7 Other AC / Ventilation Equipment

5.1.2 Heating Equipment

5.1.2.1 Air-to-Water Heat Pumps

5.1.2.2 Ground-Source Heat Pumps

5.1.2.3 Boilers / Furnaces / Radiators

5.1.2.4 Hybrid Heat-Pump Systems

5.2 By End-User Industry

5.2.1 Residential

5.2.2 Commercial (Offices, Retail, Hospitality)

5.2.3 Industrial and Manufacturing

5.2.4 Institutional and Public Buildings

5.3 By Installation Type

5.3.1 New Construction

5.3.2 Retrofit / Replacement

5.4 By Distribution Channel

5.4.1 OEM-Installer Networks

5.4.2 Wholesale / Distributor

5.4.3 Direct-to-Consumer and E-commerce

5.5 By Country

5.5.1 Germany

5.5.2 United Kingdom

5.5.3 France

5.5.4 Italy

5.5.5 Spain

5.5.6 Russia

5.5.7 Netherlands

5.5.8 Rest of Europe

6 COMPETITIVE LANDSCAPE

6.1 Market Concentration

6.2 Strategic Moves

6.3 Market Share Analysis

6.4 Company Profiles (includes Global-level Overview, Market-level Overview, Core Segments, Financials as available, Strategic Information, Market Rank/Share, Products and Services, Recent Developments)

6.4.1 Daikin Industries Ltd.

6.4.2 Carrier Global Corporation

6.4.3 Mitsubishi Electric Corporation

6.4.4 Robert Bosch GmbH (Bosch Thermotechnology)

6.4.5 Vaillant Group

6.4.6 Danfoss A/S

6.4.7 Lennox International Inc.

6.4.8 Panasonic Corporation

6.4.9 Ariston Holding N.V.

6.4.10 BDR Thermea Group B.V.

6.4.11 Hitachi Ltd. (Johnson Controls-Hitachi)

6.4.12 Johnson Controls International plc

6.4.13 Systemair AB

6.4.14 NIBE Industrier AB

6.4.15 Glen Dimplex Group

6.4.16 Fujitsu General Limited

6.4.17 LG Electronics Inc.

6.4.18 Samsung Electronics Co. Ltd.

6.4.19 Trane Technologies plc

6.4.20 Viessmann Climate Solutions SE

6.4.21 STIEBEL ELTRON GmbH & Co. KG

6.4.22 Gree Electric Appliances Inc. of Zhuhai

6.4.23 Midea Group Co. Ltd.

6.4.24 Arcelik A.S.

6.4.25 Riello S.p.A.

6.4.26 Armacell S.A.

6.4.27 Thermondo GmbH

6.4.28 Enertech AB (CTC)

7 MARKET OPPORTUNITIES AND FUTURE OUTLOOK

7.1 White-space and Unmet-need Assessment

For more information about this report visit https://www.researchandmarkets.com/r/fw4tq0

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