The VRF System Market was valued at USD 19.37 Billion in 2024. The VRF System Market industry is projected to grow from USD 22.10 Billion in 2025 to USD 78.46 Billion by 2035, exhibiting a compound annual growth rate (CAGR) of 15.2% during the forecast period (2025-2035).
The increasing demand for energy-efficient HVAC solutions and rapid urbanization and infrastructure development in emerging economies and technological advancements in VRF systems are driving the growth of the VRF System Market.
FIGURE 1: VRF SYSTEM MARKET VALUE (2019-2035) USD BILLION
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
The increasing adoption of smart and connected building systems presents a significant growth opportunity for the VRF systems market. Modern buildings are increasingly incorporating advanced technologies such as IoT, artificial intelligence (AI), and centralized building management systems (BMS) to optimize energy usage, enhance occupant comfort, and reduce operational costs. VRF systems, with their adaptability and ability to integrate seamlessly with these technologies, are well-positioned to capitalize on this trend. IoT-enabled VRF systems allow real-time monitoring and control of HVAC operations through mobile apps or centralized dashboards. Features such as predictive maintenance, remote diagnostics, and energy usage analytics improve operational efficiency and reduce downtime. These capabilities align perfectly with the needs of smart buildings, which prioritize automation and energy efficiency.
Moreover, the demand for energy-saving technologies in commercial spaces, such as offices, hotels, and retail centers, is driving interest in VRF solutions. Integration with smart grids and renewable energy sources further enhances the appeal of VRF systems. As more buildings adopt smart technologies, the role of VRF systems in achieving holistic energy management will expand, offering manufacturers and vendors a lucrative opportunity to grow their market presence.
Based on System Type, this segment includes Heat Pump VRF (2 Pipe System) and Heat Recovery VRF (3 Pipe System). The Heat Pump VRF (2 Pipe System) segment dominated the global market in 2024, while the Heat Recovery VRF (3 Pipe System) segment is projected to be the fastest–growing segment during the forecast period. VRF heat pump systems are also known as 2 pipe VRF system. These systems provide heating and cooling to all the indoor units through the refrigerant pipes but are insufficient to provide simultaneous heating and cooling function. Here, the indoor units function as evaporators when operating in cooling mode. Vice versa, the indoor units function as condensers when operating in heating mode. 2 pipe VRF system can provide simultaneous heating and cooling, only when there is a branch controller.
This branch controller is placed between the condenser and copper branch piping network that works on delivering the refrigerant to the indoor fan-coil units. One should only opt for a branch controller when there is a possibility of expansion in the coming future. 2 pipe VRF system provides cooling to the areas that need it by supplying the refrigerant through refrigerant pipes in a liquid form. In contrast, the areas that require heating are provided with the refrigerant through refrigerant pipes in a gaseous form. Furthermore, the extracted heat from cooled areas is then diverted through refnet joints towards heated areas. The condenser work towards providing output difference, which is utterly essential for maintaining the balance of heating and cooling.
Based on Component, this segment includes Outdoor Units, Indoor Units, Control Systems, Accessories. The Outdoor Units segment dominated the global market in 2024, while the Indoor Units segment is projected to be the fastest–growing segment during the forecast period. The VRF system outdoor unit plays a critical role in the operation of a Variable Refrigerant Flow (VRF) system, which is designed to efficiently heat and cool multiple indoor spaces using a single outdoor unit. It houses the compressor, which adjusts the flow of refrigerant based on the cooling or heating demands of the indoor units.
The outdoor unit circulates refrigerant through a network of piping to each connected indoor unit, allowing for independent temperature control in different zones. It operates with variable speed control, ensuring energy efficiency by only using the required amount of power, thereby reducing energy consumption. Additionally, the outdoor unit features a heat exchanger that either absorbs heat from or releases heat to the outside air, depending on whether the system is in cooling or heating mode. One of the key benefits of the VRF system is its flexibility in installation, as the outdoor unit can be placed in various locations like rooftops or ground level, making it suitable for complex building designs.
FIGURE 2: VRF SYSTEM MARKET SHARE BY COMPONENTS 2024 AND 2035 (USD BILLION)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Based on End Use Vertical, this segment includes Commercial, Residential, Industrial. The Commercial segment dominated the global market in 2024, while the Residential segment is projected to be the fastest–growing segment during the forecast period. A commercial variable refrigerant flow system is a type of HVAC system that is commonly used in commercial buildings such as office buildings, schools, hotels, and hospitals. VRF systems work by using a refrigerant that is circulated through a series of indoor and outdoor units, which are connected by small-diameter refrigerant piping. VRF systems are ductless systems, which means that they do not use air ducts to distribute air throughout a building and use heat pumps or a heat recovery system to provide heating and cooling to a building.
The refrigerant is used to transfer heat from the indoor units to the outdoor units, and vice versa, depending on whether heating or cooling is required. The VRF HVAC system allows for the use of multiple indoor units utilizing the same outdoor unit. The single outdoor condensing unit of a VRF system contains a compressor that pressurizes the refrigerant, which then flows through the indoor units and into the outdoor unit, where it is then condensed back into a liquid form. This liquid refrigerant then flows back to the indoor units, completing the cycle. This allows VRF systems to provide individual temperature control to each zone, as well as to minimize energy waste by only circulating the amount of refrigerant needed to meet the heating or cooling demands of each zone.
Based on the Region, the global VRF System is segmented into North America, Europe, Asia-Pacific, Middle East & Africa and South America. Major demand factors driving the Asia-Pacific market are the increasing demand for energy-efficient HVAC solutions and rapid urbanization and infrastructure development in emerging economies and technological advancements in VRF systems. Asia-Pacific is the largest and fastest-growing region for VRF systems, largely due to rapid urbanization and infrastructure development in countries like China, India, and Southeast Asia. As these regions continue to experience a construction boom in both residential and commercial sectors, the demand for advanced and efficient HVAC solutions like VRF systems is increasing.
Economic growth, rising disposable incomes, and the growing focus on energy efficiency are significant factors contributing to the market’s expansion. China and India are seeing high adoption rates due to urban development and government initiatives encouraging energy-saving technologies. Furthermore, the growing middle class and the demand for high-quality living spaces in both urban and suburban areas are creating a robust market for VRF systems. However, cost sensitivity in some Southeast Asian countries, as well as the need for skilled labor to install and maintain VRF systems, could pose challenges. Despite this, Asia-Pacific’s rapid urban growth and infrastructure projects make it a key region for future VRF system adoptions.
FIGURE 3: VRF SYSTEM MARKET VALUE BY REGION 2024 AND 2035 (USD BILLION)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Further, the countries considered in the scope of the Application Tracking System Market are the US, Canada, Mexico, Germany, France, the UK, Italy, Spain, China, India, Japan, South Korea and others.
Many global, regional, and local vendors characterize the VRF System Market. The market is highly competitive, with all the players competing to gain market share. Intense competition, rapid advances in technology, frequent changes in government policies, and environmental regulations are key factors that confront market growth. The vendors compete based on cost, product quality, reliability, and government regulations. Vendors must provide cost-efficient, high-quality products to survive and succeed in an intensely competitive market.
The major competitors in the market are Daikin, LG Electronics Inc., Carrier Global Corporation, Mitsubishi Electric Corporation, Midea Group Co., Johnson Controls, Fujitsu General, Blue Star Limited, Voltas Limited, Bosch Industriekessel Gmbh, GREE Commercial, SKM Air Conditioning, Trane Technologies, Samsung Electronics Co., Lennox International Inc. are among others. The VRF System Market is a consolidated market due to increasing competition, acquisitions, mergers and other strategic market developments and decisions to improve operational effectiveness.
May 2024: Lennox provider of innovative climate solutions in the HVACR industry, and Samsung, a trusted global brand with 40 years of innovative HVAC technology, are pleased to announce they have signed an agreement forming a joint venture to sell ductless AC and heat pump (mini-split, multi-split, VRF) products in the United States and Canada. The newly established joint venture will be called Samsung Lennox HVAC North America.
July 2024: Johnson Controls-Hitachi Air Conditioning Europe has launched the air365 Max, a new top-flow variable refrigerant flow (VRF) air conditioning system. The air365 Max is an end-to-end VRF solution that delivers seamless comfort, energy efficiency, and easy installation and maintenance for professionals, design consultants, and commercial building owners in the heating, ventilation, and air conditioning (HVAC) sector.
August 2024: Trane - by Trane Technologies announces its new GEN Elite C Series VRF system, a Cooling Only Variable Refrigerant Flow (VRF) system is available for India, Thailand, Vietnam and other emerging markets in the Asia Pacific region. The breakthrough system offers high efficiency, precise temperature control, stable performance, and a flexible design, making it an ideal solution for a wide range of commercial buildings including offices, hospitals, retail spaces, and more.
January 2021: Samsung has launched large capacity Variable Refrigerant Flow (VRF) air conditioning systems in India that can be installed in just 0.5 sq meters of space in premium apartments, villas, bungalows, houses as well as commercial and retail establishments. The new side discharge VRF system—DVM S Eco—promises an extremely efficient, eco-friendly and quiet air conditioning solution and offers a specialized single outdoor unit for affordable multi-room cooling.
| Report Attribute/Metric | Details |
| Market Size 2024 | USD 19.37 Billion |
| Market Size 2025 | USD 22.10 Billion |
| Market Size 2035 | USD 78.46 Billion |
| Compound Annual Growth Rate (CAGR) | 15.2% (2025-2035) |
| Base Year | 2024 |
| Forecast Period | 2025-2035 |
| Historical Data | 2019-2023 |
| Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | By System Type, By Component, By End Use Vertical |
| Geographies Covered | North America, Europe, Asia Pacific, Middle East & Africa, South America. |
| Countries Covered | The US, Canada, Mexico, Germany, France, the UK, Italy, Spain, China, India, Japan, South Korea |
| Key Companies Profiled | Daikin, LG Electronics Inc., Carrier Global Corporation, Mitsubishi Electric Corporation, Midea Group Co., Johnson Controls, Fujitsu General, Blue Star Limited, Voltas Limited, Bosch Industriekessel Gmbh, GREE Commercial, SKM Air Conditioning, Trane Technologies, Samsung Electronics Co., Lennox International Inc. |
| Key Market Opportunities | Growing adoption of smart and connected building systems, Expanding applications in emerging markets |
| Key Market Dynamics | The increasing demand for energy-efficient HVAC solutions, Rapid urbanization and infrastructure development in emerging economies, Technological advancements in VRF systems |
VRF System Market Highlights:
Frequently Asked Questions (FAQ) :
USD 19.37 Billion is the VRF System Market in 2024
The Outdoor Units segment by component holds the largest market share and grows at a CAGR of 15.0 % during the forecast period.
Asia-Pacific holds the largest market share in the Global VRF System Market.
Daikin, LG Electronics Inc., Carrier Global Corporation, Mitsubishi Electric Corporation, Midea Group Co., Johnson Controls, Fujitsu General, Blue Star Limited, Voltas Limited, Bosch Industriekessel Gmbh, GREE Commercial, SKM Air Conditioning, Trane Technologies, Samsung Electronics Co., Lennox International Inc. are the prominent players in the Global VRF System Market.
The Heat Pump VRF (2 Pipe System) segment dominated the market in 2024.
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Research Analyst Level II With a technical background in information technology & semiconductors, shubham has 4.5+ years of experience in market research and analytics with the tasks of data mining, analysis, and project execution. he is the poc for our clients, for their consulting projects running under the ict/semiconductor domain. shubham holds a bachelor’s in information and technology and a master of business administration (mba). shubham has executed over 150 research projects for our clients under the brand name market research future in the last 2 years. his core skill is building the research respondent relation for gathering the primary information from industry and market estimation for niche markets. he is having expertise in conducting secondary & primary research, market estimations, market projections, competitive analysis, analysing current market trends and market dynamics, deep-dive analysis on market scenarios, consumer behaviour, technological impact analysis, consulting, analytics, etc. he has worked on fortune 500 companies' syndicate and consulting projects along with several government projects. he has worked on the projects of top tech brands such as ibm, google, microsoft, aws, meta, oracle, cisco systems, samsung, accenture, vmware, schneider electric, dell, hp, ericsson, and so many others. he has worked on metaverse, web 3.0, zero-trust security, cyber-security, blockchain, quantum computing, robotics, 5g technology, high-performance computing, data centers, ai, automation, it equipment, sensors, semiconductors, consumer electronics and so many tech domain projects.
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