INDUSTRY NEWS This article was published in ASHRAE Journal, July 2021. Copyright 2021 ASHRAE. Posted at www.ashrae.org. This article may not be copied and/or distributed electronically or in paper form without permission of ASHRAE. For more information about ASHRAE Journal, visit www.ashrae.org. U.S. Ranks 4th for VRF

Contributed by BSRIA Worldwide significant growth in the last 10 Market Intelligence years, with 19% growth in value U.S. VRF Applications by terms (compound annual growth Verticals in 2020 (in Units) BRACKNELL, BERKSHIRE, U.K.—The United rate [CAGR]) between 2009 and States is the fourth-biggest market 2019. In the U.S., VRF technology is for variable refrigerant flow (VRF) taking share from traditional U.S. technology following China, Japan ducted units, packaged terminal and South Korea, according to air conditioner and residential and BSRIA World Air Conditioning Report light commercial rooftops units, 2021-102181, which was released but less so replacing scroll chillers, in April. Globally the VRF market due to the limited significance of reached U.S. $12 billion in 2020, this market. with a contraction of 4% compared The global success of VRF prod- to 2019 levels due to the impact of ucts can be attributed to factors COVID-19. such as its energy efficiency, espe- VRF traditionally has been cially at part load compared to con- The monitoring of single-dwelling installed in light commercial and ventional HVAC systems; its flex- energy use through submetering medium-size projects up to 300 kW ibility in zonal control, delivery of allows landlords to charge each (85 ton) capacity range. However, simultaneous heating and cooling; tenant for their energy use and in the last decade the increase of heat recovery and ease of installa- in China, where the up-market mini-VRF sales (< 20 kW [6 ton]) tion with no ductwork required. properties are sought after with enabled its rapid penetration in the However, initial capital cost could a preinstalled air-conditioning residential market. As of 2020, 55% be a deterring factor when it comes unit, this has encouraged the of global VRF sales was comprised to decision making. Therefore, a use of mini-VRFs. This trend has of mini-VRF, by volume. This trend life-cycle cost exercise should be also been seen in other cities, for is also seen in the U.S., where today carried out for a better comparison. example in London. As the effects around 24% of VRF sales are for The range of applications vary of climate change drive change for residential applications. hugely, from a single-family home shorter and milder winters, a VRF The VRF market is a relatively to offices, data centers, hospital- unit’s ability to heat and cool effi- mature market in Asia and Europe, ity, hospitals, etc. However, for ciently meets this demand between but still relatively new in the VRF systems larger than 20 kW seasons. Americas and Middle East, India (6 kW), offices is a significant appli- VRF is not the only Asia technol- and Africa. cation. Outside the U.S., retail and ogy seeing growth in the U.S. There In the Middle East, VRF units have hotels are also key applications for is also an increase in ductless been taking market share from roof- VRF, but this is less significant in split systems replacing traditional top units where they are tradition- the U.S. due to continued success of ducted splits technology; however, ally installed in residential villas. packaged terminal air conditioner this is still from a low base. In Asia and Europe, they have been units, which is unique to the North Following the financial crises of taking the market share from multi- American market. In recent years, 2008, several years had fewer large splits, rooftops, ducted single splits there has been an increasing adop- construction projects where large- and scroll compressor chillers. tion of VRFs in residential applica- capacity HVAC systems were speci- The U.S. market reached U.S. tion and in the U.S., particularly in fied. During these years, VRF tech- $657 million in 2020 and has seen townhouses. nology was particularly popular

6 ASHRAE JOURNAL ashrae.org JULY 2021 INDUSTRY NEWS

Top 10 Major Markets Growth (CAGR 2020 – 2025), by Volume­ Focus on Low Carbon

DOE Lays Out Plan to Cut Buildings’ Energy, Emissions WASHINGTON, D.C.—In May, the U.S. Department of Energy (DOE) announced actions to cut buildings’ energy and emissions footprints, including an initiative that will focus on clean and ef- ficient heating and cooling. The program, called the Initiative for Better Energy, Emissions, and Equity with refurbishment projects as well as come from these sectors in major mar- (E3), could advance the small- to medium-size new build proj- kets; in the U.S. these two sectors com- research, development and ects. VRF was one of the few solutions prised 34% of sales in 2020. deployment of clean heat- that continued to see growth. Another challenge is the global warm- ing and cooling systems The opportunities in the VRF market ing potential (GWP) of the working like heat pumps, advanced encouraged traditional air-condi- fluid that is being used in VRF units. water heaters, low-to-no tioning product suppliers to merge R-410A has a GWP of 2,088 and is being global warming potential with VRF suppliers to offer a complete phased out in VRFs in Europe. It is being refrigerants and smarter product range to stay competitive in replaced with R-32 refrigerant, which HVAC diagnostic tools. the market. As a result, there have has a GWP of 677. China, which accounts Source: DOE been a number of global alliances and for around 67% of the world’s VRF mar- acquisitions to ensure major compa- ket, is also rapidly replacing R-410A White House: How to nies could present a full portfolio to with R-32. The latest BSRIA world air- Modernize Buildings the market and take advantage of the conditioning study showed just over 50% WASHINGTON, D.C.—The Biden strengths of solutions combined with a of units sold used R-32, whereas in the administration is investing local sales network. U.S., the sales of R-32 refrigerants in VRF in new initiatives to improve In North America, the partner- sales were negligible. building energy efficiency, ship between Carrier and Midea was Although 2021 will be a challeng- modernize American announced in September 2017 in the ing year for the VRF market in the U.S. buildings and be a net zero residential ductless HVAC business. The because there will not be the double- economy by 2050. One partnership allowed Carrier to penetrate digit growth rates seen in the past, the initiative is the U.S. Depart- the growing ductless split market while market is nevertheless expected to see ment of Energy’s grid-in- allowing Midea access to the distribu- good growth, bearing in mind the matu- teractive efficient buildings tion channel. Another partnership was rity of the U.S. air-conditioning market. “road map” that includes formed in January 2018 between Trane Most markets are recovering from the recommendations to inte- and Mitsubishi Electric for ductless impact of COVID-19, with the VRF mar- grate buildings with solar splits and VRF products in the U.S. and ket globally set to see 5.4% growth (CAGR and wind power through selected Latin American countries. 2020 – 2025). Expected CAGR growth for demand management and The challenge for the VRF market is the the U.S. for 2020 – 2025 is around 8%. storage. Download the decreasing demand from the hospitality For further details on the VRF mar- report: https://tinyurl.com/ and office sectors. As a rule of thumb, ket, contact BSRIA or visit their web- xvsun2se Source: Smart around one-third of VRF sales tend to site: www.bsria.com Cities Dive

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