U.S. District Cooling Market Size, Share & COVID-19 Impact Analysis, By Technology (Electric Chillers, Absorption Chillers, and Others), By End-user (Residential, Industrial, and Commercial), and Country Forecast, 2023-2030

The U.S. district cooling market size was valued at USD 7.21 billion in 2022 and is projected to grow at a CAGR of 3.23% during the forecast period.

The district cooling solution is an essential system for cooling purposes. It provides chilled water for indoor cooling to residential, industrial, and commercial buildings from a central plant to a multistory building through underground pipelines. District cooling is rapidly growing in the country due to the diverse climate, where several areas witness hot summers and cold winter seasons. In some areas, conventional air conditioning is used for a maximum of a month in the year, making investing in cooling infrastructure more cost-effective than other HVACs. The market in the U.S. will grow in the upcoming years as the government and other national bodies are trying to develop technologies that can reduce the carbon emissions generated by ACs. In addition, currently, it holds a considerable amount of shares in the HVAC sector.

The COVID- 19 challenged the energy and power industry. The HVAC market also faced difficulties in recent years due to several factors and observed reduction in market share. The early stage of the pandemic shut down all operations worldwide. Additionally, the manufacturing of equipment and components stopped production. The workforce of the manufacturing plants left the particular companies and settled down in home towns. All these factors resulted in the low demand and supply of the market.

U.S. District Cooling Market Trends

Growing Technological Advancements in District Cooling Systems

Cooling technologies have been trending in recent years due to multiple factors, such as rising global warming and temperatures, which require sustainable HVAC systems. Cooling systems such as chillers are beneficial due to their features, such as electricity efficiency, making them technologically advanced for end-users. Increasing demand for energy efficiency may drive the market growth. Recently, Annex TS4: Digitalization of District Heating and Cooling by the International Energy Agency Technology collaboration program aimed to endorse the opportunities of combining digital processes into DHC schemes and clarify the role of digitalization for different activities within the district heating and cooling system. This trend will create a requirement for the solution in the upcoming years.

U.S. District Cooling Market Growth Factors

Inclination Toward Sustainability and Energy Efficiency to Drive Growth of the Market

The increasing demand for electricity drives the U.S. district cooling market growth. In addition, the primary drivers boosting growth are the demand for sustainability and energy efficiency. The solution provides a more energy-efficient and sustainable solution for cooling buildings than individual air conditioning systems, as district cooling installations are growing in the country.

In April 2020, the city utility of Munich, Stadtwerke München, planned to extend its district cooling networks. Although the city has few cooling centers, with growing demand, Stadtwerke München is investing around USD 88 million in construction and infrastructure for both generation and required network connections. The plant will deliver clean geothermal district heating to more than 80,000 residents of the city of Munich.

RESTRAINING FACTORS

Several Alternative Cooling Technologies to Hinder Market Growth

Several manufacturers and service providers use alternative cooling technologies to deliver a long-lasting cooling experience to multistoried buildings. Technologies such as variable refrigerant flow (VRF) are one of the fastest-growing technologies in cooling systems. These systems circulate the lowest refrigerant required for each zone to fulfill the building load.

In March 2023, Johnson Controls-Hitachi Introduced the First Line of accurate air conditioners to use low-GWP R-32 Refrigerants.

U.S. District Cooling Market Segmentation Analysis

By Technology Analysis

By technology, the market is categorized into electrical chillers, absorption chillers, and others. The absorption chillers segment held the largest U.S. district cooling market share in 2022 owing to the multiple features it delivers to the end user.

In addition, other chillers are also boosting the demand for the solution.

• In February 2023, Daikin launched a second-generation cooling-only chiller range with R32 scroll compressors. The latest air-cooled chiller with R32 scroll compressors provides a low-carbon solution for various process, IT, comfort cooling, and industrial applications while extending the company’s low GWP scroll range up to 1010 kW. 

By End-user Analysis

Based on end-user, the market is segregated into residential, commercial, and industrial.

The commercial segment held the largest share in 2022 owing to increasing new and infrastructure development projects in the U.S. The requirement of energy efficient and sustainable Heating, Ventilation, and Cooling (HVAC) systems is boosting the commercial segment growth. The residential sector is one of the important end-users in the U.S. district cooling market.

• For instance, the U.S. Energy Information Administration’s Residential Energy Consumption Survey 2020 displays that 88% of U.S. households use air conditioning. In 2020, the South and Midwest Census Region had the highest percentages of households utilizing air conditioning, at 93% and 92%, respectively.

List of Key U.S. District Cooling Market Companies

In terms of the competitive landscape, the market portrays the presence of established and emerging HVAC companies. Veolia has a significant market share in the U.S., driven by its huge portfolio. ENGIE also has a quality and sustainable HVAC system, including district cooling, which makes it the best brand in the U.S.

Other companies with a significant existence in the U.S. district cooling market include Ramboll Group, Scientific System, LLC, Trane, and ARANER. For Instance, a joint venture of ENGIE, which has a strong presence in the U.S., and French state-owned public transport organization RATP (Parisian Autonomous Transport Administration) has been awarded by the city of Paris to operate its HVAC network for over 20 years.

LIST OF KEY COMPANIES PROFILED:

• Ramboll Group (Denmark)


• Veolia (France)


• Scientific Systems, LLC (U.S.)


• ENGIE (France)


• Alfa Laval Inc. (U.S.)


• Trane (U.S.)


• ARANER (U.S.)


• Austin Energy (U.S.)


• Ebcorpo (U.S.)


• AVANCEON GROUP (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• September 2023: Tabreed (who also has a strong presence in the U.S.) invested USD 200 million in Telangana to develop district cooling plants. The state government also signed a memorandum of understanding with Tabreed to explore HVAC infrastructure in existing and future commercial areas of Cyberabad nearby and other mixed-use development areas. 


• April 2023: The U.S. Department of Energy proclaimed a USD 13 million initiative to design and deploy district geothermal heating and cooling in 11 selected communities.


• February 2023: Vicinity Energy, a national decarburization leader with a broad portfolio of district energy systems across the U.S., has been awarded USD 1 million in incentives by the EmPOWER Maryland program driven by Baltimore Gas and Electric (BGE) to invest in the significant energy efficiency project that resulted in supportable upgrades for its district chilled water facilities.

REPORT COVERAGE

The market research report provides a detailed analysis of the market. It focuses on key aspects such as an overview of the technological advancements, the trend in the district cooling market in the U.S., and pricing analysis. In addition, it includes an overview of the market, new product launches, key industry developments such as mergers, partnerships, and acquisitions and the impact of COVID-19 on the market. Besides this, the report also highlights key industry dynamics. In addition to the aforementioned factors, it encompasses several factors that have contributed to the growth of the market over recent years.

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