Saudi Arabia HVAC Market

Saudi Arabia HVAC Market Size and Share:

The Saudi Arabia HVAC market size was valued at USD 3.01 Billion in 2024 and is expected to reach USD 6.22 Billion by 2033, with a CAGR of 7.98% during 2025-2033. Western Region currently dominates the market, holding a significant market share of around 41.7% in 2024. Due to rising environmental regulations, population increases, and climate change issues, the market is growing as consumers and companies want sustainable, smart HVAC systems that can offer comfort and maximize energy consumption. Moreover, increasing energy-efficient demands, high-speed automation, and the incorporation of smart technology are some of the drivers that are favorably influencing the Saudi Arabia HVAC market share.

The market in Saudi Arabia is primarily driven by the growing need for advanced cooling systems in commercial, residential, and industrial spaces. Additionally, the significant increase in construction activities, particularly in cities, is also serving as a major growth driver for the market. Correspondingly, the growing need for energy-efficient and environmentally friendly solutions is also giving a boost to the market. Hitachi Energy, on May 30, 2023, signed deals with ENOWA and Saudi Electricity Company to develop and design the first phase of the transmission system for the NEOM region. The partnership is designed to boost the energy infrastructure for the NEOM city project, a part of Saudi Arabia's Vision 2030. The project is focused on sustainability and energy efficiency, representing an important step towards the development of a smart, low-carbon energy system in the future. In addition to this, the rapid expansion of smart technologies and building automation systems is resulting in a higher adoption of HVAC systems that offer enhanced control, comfort, and energy optimization, which is contributing to the Saudi Arabia HVAC market growth.

Besides this, the increasing temperatures and extreme climate conditions in the region are creating a higher demand for reliable and efficient HVAC systems. On February 13, 2025, TAQA Geothermal Energy and EDF Saudi Arabia inked a strategic MoU to cooperate on geothermal energy solutions, such as electricity generation and HVAC usage, across Saudi Arabia. The deal was sealed at the PIF Private Sector Forum, reaffirming both firms' interest in developing decarbonized solutions. This collaboration is in line with Saudi Arabia's Vision 2030 and facilitates the Kingdom's move towards a cleaner, more sustainable energy future with emphasis on geothermal energy and compressed air storage technologies. Additionally, increasing concerns for environmental sustainability and government regulations to minimize energy consumption are contributing positively to the overall Saudi Arabia HVAC market outlook. Apart from this, the rising disposable incomes and the increasing focus on building more sustainable and energy-efficient infrastructure are propelling the market. Some of the other factors contributing to the market include the shift towards greener and smarter cities, growing demand for automation and remote-control systems, and substantial investments in HVAC technology. The market is further driven by the availability of better financing options for HVAC installation, which is making these systems more accessible to a broader range of consumers.

Saudi Arabia HVAC Market Trends:

Focus on Sustainable and Energy-Efficient Solutions

The HVAC market in Saudi Arabia is being significantly influenced by the growing emphasis on sustainable and energy-efficient solutions. Both government and businesses are adopting stringent environmental regulations aimed at reducing energy consumption and lowering carbon emissions. This shift is pushing the HVAC industry toward greener technologies that meet eco-friendly standards while offering optimal performance. Saudi Arabia's construction market, valued at USD 70.33 Billion in 2024 and expected to reach USD 91.36 Billion by 2029, plays a crucial role in driving the Saudi Arabia HVAC market demand, with an emphasis on for energy-efficient HVAC systems, as the construction of new residential, commercial, and industrial spaces continues to grow. The rising concern over climate change and the need to mitigate its impact are also contributing to the increased demand for HVAC systems that prioritize energy efficiency.

Urbanization and Population Growth Driving HVAC Demand

As Saudi Arabia's urbanization accelerates, so does the need for efficient HVAC systems. According to UN-Habitat, urbanization in Saudi Arabia is projected to reach 97.6% by 2030, with Riyadh's population expected to grow to 8.2 million, 75% of whom will be Saudi nationals. This rapid urban development leads to an increasing demand for residential and commercial spaces, further propelling the HVAC market. The increase in population density also increases the demand for efficient and effective climate control systems to provide comfort in densely populated urban environments. The growth of the urban landscape along with population changes offers a great opportunity for HVAC providers to provide solutions that meet the distinctive challenges of densely populated environments.

Integration of Smart Technologies and Climate Control Solutions

The growing integration of smart technologies and the Internet of Things (IoT) into HVAC systems is becoming a crucial trend in the Saudi Arabia market. Smart HVAC systems that offer enhanced control, automation, and energy optimization are meeting the modern consumer’s demand for intelligent, connected solutions. These systems not only improve convenience but also contribute to energy savings and sustainability efforts. Moreover, escalating regional temperatures and unpredictable weather patterns, as projected by the G20 Climate Risk Atlas (where heatwaves are expected to last 4,242% longer), are increasing the necessity for HVAC systems that can provide effective climate control in extreme conditions. The Saudi Arabian HVAC market is meeting this increasing demand by creating not only products that are comfortable but also solutions that meet the needs of addressing increased temperatures and climate unpredictability.

Saudi Arabia HVAC Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global Saudi Arabia HVAC market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on equipment, implementation type, and end use.

Analysis by Equipment:

• Heating
  • Heat Pumps
  • Furnaces
  • Unitary Heating
• Ventilation
  • Air-handling Units
  • Air Filters and Purifiers
  • Ventilation Fans
  • Dehumidifiers and Humidifiers
  • Others
• Cooling
  • Unitary Air Conditioners
  • VRF Systems
  • Chillers
  • Coolers
  • Cooling Towers
  • Others

Cooling equipment stands as the largest component in 2024, holding around 76.9% of the market. The demand for cooling solutions in Saudi Arabia remains a dominant force in the HVAC market, contributing significantly to the overall market size. This is driven by the extreme temperatures experienced throughout the year, especially during the summer months, where cooling systems are essential for maintaining comfort. The large-scale adoption of air conditioning in both residential and commercial spaces is a key factor, as more buildings and homes require effective and energy-efficient cooling solutions. Additionally, increasing urbanization and the rise in construction activities across major cities are leading to a surge in the installation of air conditioning systems. Technological advancements in cooling systems, such as the integration of VRF systems and energy-efficient air conditioning units, are further driving the adoption of cooling equipment, as consumers look for more sustainable and cost-effective options.

Analysis by Implementation Type Insights:

• New Constructions
• Retrofits

70.0% of HVAC systems are used in new constructions in 2024, which is largely attributed to the rapid urban expansion in Saudi Arabia. As the country continues to focus on large-scale infrastructure projects and residential developments, there is a heightened need for HVAC systems to maintain indoor comfort across various types of buildings. The government’s initiatives to promote sustainable construction practices, combined with the increasing demand for modern residential and commercial spaces, is fueling the demand for HVAC systems in newly built properties. Moreover, developers are increasingly incorporating advanced HVAC technologies, such as smart systems and energy-efficient solutions, into new buildings to meet environmental standards and consumer expectations. The boom in the construction sector is further supported by Saudi Arabia's Vision 2030 plan, which emphasizes urban development and modernization.

Analysis by End Use Insights:

• Residential
• Commercial
• Industrial

Commercial represent 45.2% of the HVAC market, driven by the need for climate control in offices, malls, hotels, and other large-scale public spaces. These facilities require efficient HVAC systems to ensure a comfortable environment for employees, customers, and guests. As urbanization increases and commercial infrastructure grows, the demand for HVAC systems in this segment continues to rise. Additionally, with the emphasis on sustainability and energy efficiency, commercial establishments are investing in HVAC systems that meet higher environmental standards while providing cost-effective solutions for businesses. The increasing focus on creating smart buildings with integrated HVAC and automation systems also contributes to the market growth in the commercial sector.

Regional Analysis:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

The Western Region holds the largest market share in the Saudi Arabia HVAC market, accounting for 41.7% in 2024. This is primarily due to the presence of major cities like Riyadh, Jeddah, and Mecca in the region, where significant construction activities are taking place. The demand for HVAC systems is particularly high in commercial buildings, residential complexes, and hospitality sectors across this region. The government's infrastructure development plans, along with an increasing focus on creating smart and energy-efficient buildings, are further driving HVAC adoption in the Western Region, making it the dominant area for HVAC solutions in the Saudi Arabia.

Competitive Landscape:

Major companies in the Saudi Arabia HVAC market are focusing on innovation and sustainability to maintain market growth. They are investing heavily in energy-efficient and environmentally friendly HVAC solutions, aligning with global sustainability goals and local government regulations. Additionally, companies are integrating smart technologies, such as IoT-enabled systems and AI-driven controls, to enhance energy optimization and user experience. Strategic partnerships and joint ventures are also common, as companies collaborate to expand their market presence and improve manufacturing capabilities. Moreover, these players are enhancing after-sales services and providing tailored solutions for commercial, residential, and industrial applications to cater to diverse consumer needs.

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Latest News and Developments:

• February 2025: EDF Saudi Arabia and TAQA Geothermal Energy signed an MoU during the PIF Private Sector Forum to collaborate on geothermal energy, HVAC applications, and compressed air energy storage in Saudi Arabia. The partnership supports Vision 2030, which aims to advance sustainable, decarbonized technologies and boost the Kingdom’s renewable energy sector.
• September 2024: Rheem Middle East opened its regional headquarters in Riyadh, following the launch of its Innovation and Learning Center, with the aim to support sustainable HVAC and water heating solutions.
• February 2024: Alat and Carrier announced a partnership to build an advanced HVAC manufacturing and R&D center in Saudi Arabia. The facility aimed to create over 5,000 jobs and support sustainable climate solutions for MENA and global markets.
• February 2024: Midea RAC unveiled its IcyBlast Split AC at Big 5 Construct Saudi in Riyadh. Designed for Middle Eastern climates, the AC featured 180° Spinning Wind, an Inverter Quattro technology for stable cooling under extreme heat, and a Bézier Curve Air Outlet for quiet, efficient operation.
• February 2024: Saudi Arabia’s Shaker Group signed an MoU with South Korea’s LG Electronics to explore local manufacturing of AC compressors. The agreement included a feasibility study to assess costs and viability, aiming to boost domestic production and advance Saudi Arabia’s self-reliance in the HVAC sector.

Saudi Arabia HVAC Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia HVAC market from 2019-2033.
• The Saudi Arabia HVAC market research report provides the latest information on the market drivers, challenges, and opportunities in the regional market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia HVAC industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.