Condensing Unit Market – Global Industry Size, Share, Trends, Opportunity and Forecast, By Type (Air-Cooled, Water-Cooled, Evaporative), By Function (Air Conditioning, Refrigeration, Heat Pumps), By Application (Commercial, Industrial, Transportation), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 39.45 Billion
CAGR (2026-2031)	6.76%
Fastest Growing Segment	Air-Cooled
Largest Market	North America
Market Size (2031)	USD 58.41 Billion

Market Overview

The Global Condensing Unit Market will grow from USD 39.45 Billion in 2025 to USD 58.41 Billion by 2031 at a 6.76% CAGR. The Global Condensing Unit Market consists of heat exchange assemblies used in refrigeration and HVAC systems, typically comprising a compressor, condenser, and fan to liquefy refrigerant. The primary drivers supporting growth include the rapid expansion of cold chain logistics for preserving perishable food and pharmaceuticals, alongside increased construction activity in the commercial sector. Furthermore, the rising necessity for precise temperature regulation in modern retail and industrial environments continues to bolster demand for these essential thermal management components.

A significant challenge impeding market expansion is the stringent regulatory pressure regarding the phase-out of high-global warming potential refrigerants, which compels manufacturers to incur substantial costs for redesigning equipment to ensure compliance. This transition requires significant capital investment and technical adaptation across the supply chain. Despite these regulatory hurdles, the industry continues to demonstrate resilience. According to the Japan Refrigeration and Air Conditioning Industry Association, in 2024, the global demand for air conditioners was estimated at 131.6 million units, reflecting the sustained reliance on these core cooling technologies.

Key Market Drivers

The expansion of cold chain logistics infrastructure is a primary catalyst for the Global Condensing Unit Market, driven by the critical need to preserve perishable food and pharmaceuticals during transport and storage. As supply chains interconnect globally, investments in temperature-controlled warehousing are surging to accommodate rising trade volumes and reduce post-harvest losses. This growth in storage capacity necessitates the procurement of reliable commercial refrigeration systems, where condensing units serve as essential thermal management components. According to the Global Cold Chain Alliance, April 2025, in the '2025 Global Top 25 List', the total temperature-controlled capacity operated by its members grew by over 10% year-over-year, reaching 8.16 billion cubic feet. This capacity expansion underscores the sector's robust trajectory, fueling steady demand for efficient refrigeration technologies.

Concurrently, the increasing demand for HVAC systems in residential and commercial construction is propelling market activity, particularly through the adoption of energy-efficient heat pumps. Regulatory frameworks aiming to lower carbon footprints are incentivizing the replacement of legacy fossil-fuel equipment with high-performance electric units. According to the Air-Conditioning, Heating, and Refrigeration Institute, June 2025, in the 'April 2025 U.S. Heating and Cooling Equipment Shipment Data', shipments of air-source heat pumps soared by 18.9% compared to the previous year, totaling 374,004 units. This surge reflects a broader shift toward electrification and sustainable cooling architecture. Furthermore, major industry players are maintaining substantial revenue streams, confirming market resilience despite economic fluctuations. According to Danfoss, in 2025, its Climate Solutions segment achieved sales of €3.1 billion for the fiscal year 2024.

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Key Market Challenges

The primary challenge hampering the Global Condensing Unit Market is the stringent regulatory pressure regarding the phase-out of high-global warming potential (GWP) refrigerants. This regulatory shift forces manufacturers to undertake comprehensive equipment redesigns to accommodate alternative, low-GWP refrigerants, which often possess different thermodynamic properties and flammability classifications compared to legacy fluids. Consequently, companies must allocate substantial capital toward research, development, and production line retooling rather than market expansion or capacity growth. This diversion of financial resources creates a bottleneck in the supply chain, as the technical adaptation required to ensure compliance spans millions of units annually, thereby limiting the ability of manufacturers to aggressively pursue new market opportunities.

The magnitude of this operational burden is best illustrated by the sheer volume of equipment that requires compliance with these evolving environmental standards. According to the Air-Conditioning, Heating, and Refrigeration Institute, in 2024, total U.S. shipments of central air conditioners and air-source heat pumps reached 9,681,770 units. Adapting such a vast production volume to meet rigorous new regulatory benchmarks places a direct financial and logistical strain on the industry. This necessity for widespread technical modification slows the overall growth trajectory of the condensing unit market by forcing the industry to prioritize regulatory adherence over innovation and output expansion.

Key Market Trends

The emergence of CO2 transcritical booster system architectures is reshaping the market as retailers transition away from high-GWP hydrofluorocarbons. This trend drives the development of specialized condensing units capable of handling higher pressures while delivering superior thermodynamic performance in variable climates. Manufacturers are engineering compact, distributed systems that allow smaller convenience stores and supermarkets to adopt natural refrigerants without the space requirements of traditional centralized racks. This technological shift is accelerating rapidly across developed regions, compelling vendors to expand their portfolios of eco-friendly thermal solutions. According to ATMOsphere, February 2025, in the 'Natural Refrigerants: State of the Industry' report, the adoption of these sustainable technologies surged significantly, with Europe reaching approximately 90,700 food retail stores utilizing transcritical CO2 systems.

Simultaneously, the implementation of IoT-enabled remote monitoring is transforming condensing units into intelligent, data-driven assets. Market players are integrating advanced sensors and cloud connectivity to enable real-time tracking of compressor health, refrigerant levels, and energy consumption. This connectivity facilitates predictive maintenance strategies that reduce downtime and optimize operational efficiency by alerting facility managers to anomalies before catastrophic failures occur. The commercial value of these digital ecosystems is evident in the substantial efficiency gains realized by adopters. According to Carrier Global Corporation, July 2025, in the '2025 Sustainability and Impact Report', its digital platform Carrier Abound surpassed 6.3 billion kilowatt-hours of cumulative energy savings for clients worldwide, demonstrating the direct financial impact of connected climate solutions.

Segmental Insights

The Air-Cooled segment is emerging as the fastest-growing category in the Global Condensing Unit Market driven by its widespread adoption in commercial refrigeration sectors. These units offer distinct advantages regarding ease of installation and lower maintenance costs since they do not require water supply infrastructure or cooling towers. This growth is further supported by stringent efficiency standards from institutions such as the U.S. Department of Energy, which compel facility operators to upgrade to compliant systems. Consequently, the rising demand for flexible and energy-efficient cooling solutions in retail and industrial applications continues to propel this segment forward.

Regional Insights

North America maintains a leading position in the Global Condensing Unit Market, primarily driven by substantial demand from the commercial refrigeration and food processing sectors. This dominance is supported by a developed cold chain infrastructure and the continuous expansion of retail supermarket chains across the United States and Canada. Additionally, stringent regulations regarding energy consumption, such as those enforced by the United States Department of Energy, compel businesses to upgrade to compliant and efficient systems. These factors, alongside a consistent focus on maintaining rigorous food safety standards, ensure North America remains the key regional market.

Recent Developments

• In January 2025, Advansor announced the launch of the ValueBox Combi, a reversible plug-and-play CO2 heat pump condensing unit designed for simultaneous heating and cooling. This new model, which follows the company's earlier release of the standard ValueBox, operates on natural refrigerant CO2 and is engineered to replace fossil fuel burners in commercial buildings and district heating applications. The unit offers capacities ranging from 200 kW to 700 kW on a single frame and includes pre-programmed controllers to simplify installation. The system utilizes waste heat recovery to maximize energy efficiency, achieving a high coefficient of performance.
• In November 2024, Carrier Commercial Refrigeration launched an updated version of its QuietCO2OL condensing unit, featuring an advanced MCXH gas cooler designed to lower refrigerant charge and reduce unit weight. This next-generation CO2 unit was engineered for high flexibility, offering oversized receiver options up to 12.5 liters to accommodate larger evaporator volumes and longer pipe runs of up to 70 meters. The system includes a factory-mounted serviceable suction filter and improved access to valves for easier maintenance. It is fully connectable to building management systems via Modbus, enhancing its suitability for demanding commercial refrigeration applications.
• In August 2024, Danfoss India introduced the new Optyma Pack Condensing Unit, a robust cooling solution specifically engineered to meet the rigorous demands of the dairy sector and bulk milk cooling. The unit features a sophisticated twin-fan design that improves heat dissipation, allowing it to maintain optimal operating temperatures even in high ambient conditions up to 48°C. It incorporates a fin and tube heat exchanger with a hydrophilic coating to enhance thermal efficiency and prolong equipment lifespan. This launch addressed the need for reliable, energy-efficient refrigeration in hot climates to support food safety and preservation.
• In January 2024, Tecumseh Products Company showcased its expanded Argus condensing unit line at the AHR Expo in Chicago, introducing a robust 12HP outdoor model designed for walk-in cold rooms and freezers. The new unit was developed to support the transition to lower-GWP refrigerants, including A2L classifications, aligning with evolving environmental regulations. This launch was part of the company’s broader display of sustainable technologies, which also featured A2L-ready rotary compressors for heat pumps. The Argus platform is known for its multi-refrigerant capabilities and was highlighted as a premium offering for the North American market.

Key Market Players

• Emerson Electric Co
• Carrier Global Corporation
• Danfoss
• GEA Group Aktiengesellschaft
• BITZER Kühlmaschinenbau GmbH
• Baltimore Aircoil Company, Inc
• Dorin S.p.A.
• SCM Frigo S.p.A.
• Daikin Industries, Ltd
• EVAPCO, Inc.

By Type	By Function	By Application	By Region
Air-Cooled Water-Cooled Evaporative	Air Conditioning Refrigeration Heat Pumps	Commercial Industrial Transportation	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Condensing Unit Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Condensing Unit Market, By Type:

• Air-Cooled
• Water-Cooled
• Evaporative

• Condensing Unit Market, By Function:

• Air Conditioning
• Refrigeration
• Heat Pumps

• Condensing Unit Market, By Application:

• Commercial
• Industrial
• Transportation

• Condensing Unit Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE