How Climate Change and Technology Are Fueling Growth in the HVAC Industry
Rising Demand for Air Conditioning
Climate change has led to higher global temperatures—and with it, a surge in demand for air conditioning. There are currently an estimated 2 billion air conditioning units in use worldwide. The International Energy Agency projects this number will rise to 5.5 billion by 2050. As countries in the Global South continue to industrialize, that demand will only grow.
Today, air conditioning accounts for 7% of global electricity usage and 3% of greenhouse gas emissions. This creates a feedback loop: increased temperatures drive more air conditioning use, which contributes to further emissions, leading to more warming—and even greater demand. Despite this challenge, air conditioning is also credited with preventing an estimated 200,000 premature deaths per year.
Addressing this paradox is where the HVAC industry is poised to grow. New technologies and environmental standards are creating opportunities for contractors to offer higher-margin, more sustainable products and services.
New Regulations Create Opportunity
More efficient air conditioning units come at a higher price, which means HVAC contractors can realize stronger profit margins. The EPA recently issued regulations requiring that all new systems use refrigerants with a global warming potential (GWP) of 750 or less. This federal mandate presents a dual opportunity: contractors can sell more efficient, eco-friendly systems while also replacing aging systems that are no longer compliant.
Older systems are becoming harder to maintain due to limited parts availability, which further incentivizes customers to upgrade. HVAC contractors can charge premium prices on legacy systems in the short term, while positioning higher-margin new units as a more practical and future-proof alternative.
Upselling Through Smart Technology
Many of these next-generation HVAC systems come equipped with smart technology that allows for added upsell opportunities. One popular feature is movement-activated air conditioning, which uses sensors to detect occupancy and activate the system accordingly. Each set of sensors can add $300 or more in revenue.
These sensors can also integrate with broader smart home systems, which often carry price tags in the hundreds. With federal regulations pushing consumers toward compliant systems, HVAC contractors have more chances to bundle and upsell products and services—maximizing revenue per installation.
The HVAC Demand from Data Centers
Another trend driving HVAC demand is the rapid growth of artificial intelligence and data centers. These centers generate significant heat and require reliable cooling to function safely. While major players like Microsoft explore advanced liquid cooling and even underwater server farms, most smaller data centers still rely on standard HVAC systems.
As more data centers are built in major cities, demand will rise for skilled HVAC contractors to handle installation and maintenance. This is a growing and specialized segment of the market with long-term potential.
A Converging Opportunity
Spurred by climate change and the broader adoption of technology, the HVAC industry is experiencing a secular growth trend. Individuals who once relied on fans or open windows are now installing full air conditioning systems. EPA regulations are nudging consumers toward higher-efficiency, higher-margin products. And smart technology enables contractors to add value—and revenue—through bundled services.
At the same time, the rise of AI and supercomputing is creating new demand for cooling solutions in the data center space. Together, these converging forces present a massive opportunity for HVAC contractors and entrepreneurs alike.
If you’re interested in buying or selling an HVAC business, schedule an appointment with Unbroker today.
