• In September 2021, Emerson Electric launched its Copeland CO₂ scroll compressors with smart electronics and dynamic vapor injection, streamlining CO₂ booster systems while slashing complexity and boosting efficiency.

• In April–June 2021, Mitsubishi Electric unveiled a CO₂ outdoor condensing unit for commercial food retail, and Nidec (Embraco) committed 70 million to expand global refrigerant compressor and condensing unit production.

In this report, the Condensing Unit Market has been segmented by Type, Function, Compressor Type, Refrigerant Type, Application, and Geography.

Condensing Unit Market, Segmentation by Type

The Condensing Unit Market has been segmented by Type into Air-Cooled Condensing Unit, Water-Cooled Condensing Unit and Evaporative Condensing Unit.

Air-Cooled Condensing Unit

Air-cooled condensing units account for approximately 62% of the market due to their cost-effectiveness, easy installation, and low maintenance requirements. These systems are extensively used in residential buildings, retail stores, and small commercial refrigeration applications.

Water-Cooled Condensing Unit

Water-cooled condensing units represent around 27% of the market and are preferred in applications requiring efficient heat exchange and compact installations. These units are ideal for industrial facilities, commercial buildings, and areas with limited ventilation space.

Evaporative Condensing Unit

Evaporative condensing units hold a smaller share of nearly 11%, but are gaining popularity due to their energy efficiency and ability to operate under high ambient temperatures. These systems are commonly used in large-scale refrigeration plants and HVAC systems in arid climates.

Condensing Unit Market, Segmentation by Function

The Condensing Unit Market has been segmented by Function into Air Conditioning, Refrigeration and Heat Pumps.

Air Conditioning

Air conditioning is the dominant function, accounting for nearly 48% of the condensing unit market. These units are essential in residential, commercial, and industrial cooling systems, providing reliable temperature control and climate regulation in varied environments.

Refrigeration

Refrigeration holds approximately 37% of the market, with extensive use in cold storage, supermarkets, and food processing units. Condensing units in this segment offer efficient cooling performance and help maintain the integrity of perishable goods.

Heat Pumps

Heat pumps represent about 15% of the market and are gaining traction due to their energy efficiency and ability to provide both heating and cooling functions. These systems are increasingly adopted in sustainable building projects and green energy initiatives.

Condensing Unit Market, Segmentation by Compressor Type

The Condensing Unit Market has been segmented by Compressor Type into Reciprocating Compressors, Screw Compressors, Rotary Compressors, and Others.

Reciprocating Compressors

Reciprocating compressors dominate the segment with around 42% market share, due to their cost-effectiveness and suitability for low-to-medium capacity applications. These compressors are widely used in commercial refrigeration and small-scale air conditioning systems.

Screw Compressors

Screw compressors hold nearly 28% of the market and are valued for their high efficiency and continuous operation. They are primarily used in industrial refrigeration systems and large HVAC setups where performance and reliability are critical.

Rotary Compressors

Rotary compressors account for about 20% of the global market, favored in residential air conditioning and light commercial units. Their compact design, quiet operation, and energy efficiency contribute to their rising demand.

Others

The “Others” category, comprising less common compressor types, contributes around 10% to the market. These include centrifugal and scroll compressors, used in specialized applications that require precise cooling performance and low vibration levels.

Condensing Unit Market, Segmentation by Refrigerant Type

The Condensing Unit Market has been segmented by Refrigerant Type into Flurocarbons, Hydrocarbons and Inorganics.

Fluorocarbons

Fluorocarbons dominate the condensing unit market with a share of around 55%, primarily due to their high cooling efficiency and compatibility with a wide range of commercial and industrial applications. However, rising environmental concerns regarding ozone depletion and warming potential (GWP) are driving regulatory shifts.

Hydrocarbons

Hydrocarbons account for approximately 28% of the market and are increasingly preferred due to their low GWP and natural refrigerant properties. They are commonly used in domestic refrigerators, supermarket systems, and chillers for eco-friendly cooling solutions.

Inorganics

Inorganic refrigerants hold a share of nearly 17%, gaining traction for their non-flammable and highly stable properties. Ammonia and carbon dioxide are key examples, used widely in industrial refrigeration and cold storage applications where natural alternatives are favored.

Condensing Unit Market, Segmentation by Application

The Condensing Unit Market has been segmented by Application into Commercial, Industrial and Transportation.

Commercial

The commercial segment holds the largest market share at approximately 47%, driven by growing demand for retail refrigeration, HVAC systems, and cold chain logistics. Condensing units in this segment are widely used in supermarkets, restaurants, and office buildings to maintain consistent cooling performance.

Industrial

Industrial applications account for about 36% of the condensing unit market. These systems are vital for process cooling in sectors like food processing, pharmaceuticals, and chemical manufacturing, where continuous and high-capacity refrigeration is essential.

Transportation

The transportation segment comprises nearly 17% of the market and includes refrigerated trucks, containers, and rail cars. Condensing units play a critical role in maintaining the cold chain for perishable goods across long-distance logistics networks.

Condensing Unit Market, Segmentation by Geography

In this report, the Condensing Unit Market has been segmented by Geography into five regions; North America, Europe, Asia Pacific, Middle East and Africa and Latin America.

Condensing Unit Market Share (%), by Geographical Region

North America

North America holds approximately 29% of the condensing unit market, supported by strong demand in HVAC and cold storage applications across the U.S. and Canada. The region emphasizes energy-efficient technologies and is a major adopter of low-GWP refrigerants.

Europe

Europe commands a market share of around 24%, led by countries such as Germany, France, and the UK. The region is witnessing increased use of natural refrigerants and stringent emission regulations that promote eco-friendly condensing units.

Asia Pacific

Asia Pacific dominates the market with a share of about 33%, driven by rapid industrialization, urbanization, and expansion of the retail cold chain. Major contributors include China, India, and Japan, where demand for air conditioning and commercial refrigeration is surging.

Middle East and Africa

The Middle East and Africa region accounts for nearly 8% of the market. Increasing infrastructure development and the need for temperature control solutions in hot climates are driving the adoption of advanced condensing units in this area.

Latin America

Latin America holds a market share of around 6%, supported by growing demand in the retail, transportation, and food processing sectors. Countries like Brazil and Mexico are investing in cold chain logistics and energy-efficient HVAC systems.

This report provides an in depth analysis of various factors that impact the dynamics of Condensing Unit Market. These factors include; Market Drivers, Restraints and Opportunities Analysis.

Drivers, Restraints and Opportunity Analysis

Drivers

• Energy efficiency regulations
• Growth in food retail sector
• Demand for frozen & chilled storage

• Technological advancements in refrigeration systems - Significantly transforming the cooling industry by enhancing energy efficiency, automation, and environmental sustainability. Modern refrigeration solutions are incorporating smart sensors, IoT connectivity, and AI-driven controls to optimize temperature regulation and minimize energy consumption. These technologies enable real-time monitoring, predictive maintenance, and automated system adjustments, resulting in greater operational reliability.

  Refrigeration units are now being designed with low-GWP refrigerants, inverter-driven compressors, and adaptive defrost systems that reduce greenhouse gas emissions and meet stringent environmental regulations. These systems are more suitable for sustainable building standards and contribute to long-term cost savings through improved energy performance. As global pressure mounts to reduce the environmental impact of HVAC systems, these advancements are becoming more than a trend—they are a necessity.

  Manufacturers are also integrating modular architecture, compact designs, and enhanced insulation materials to support applications in limited spaces and high-demand environments. These features improve installation flexibility, allow for customizable configurations, and meet the demands of industries such as hospitality, retail, healthcare, and logistics.

  As end-users increasingly prioritize reliability, automation, and regulatory compliance, manufacturers that offer innovative, energy-smart, and future-ready refrigeration solutions are positioned to gain a competitive edge in the global market.

Restraints

• High initial investment costs
• Environmental regulations on refrigerants
• Maintenance and operational costs

• Competition from traditional cooling methods - challenge the growth of advanced refrigeration technologies. Many small and medium businesses still rely on conventional air-based systems or passive cooling solutions due to their lower upfront costs and perceived simplicity. These systems often require minimal technical training and are easy to maintain, which makes them attractive in regions with limited technical infrastructure.

  In developing economies, the dominance of low-cost, widely available equipment often overshadows the long-term benefits of modern refrigeration. End-users may hesitate to adopt new technologies due to a lack of technical knowledge, after-sales support, or financial incentives. This results in slower transition rates and restricted adoption of more efficient and sustainable systems.

  Traditional systems are also well-established in specific sectors, such as agriculture, fisheries, and small retail chains, where infrastructure upgrades are viewed as disruptive or unnecessary. The perceived risk of switching to newer systems—especially those involving software integration or remote monitoring—can deter investment, despite clear energy and performance advantages.

  To counter this competition, advanced system providers must focus on education, ROI demonstration, and tailored financing options that make the transition easier and more appealing. Highlighting long-term cost efficiency, environmental compliance, and automation benefits is essential to shift user behavior away from traditional alternatives.

Opportunities

• Increasing demand in emerging economies
• Development of eco-friendly refrigerants
• Integration of IoT in refrigeration systems

• Expansion in pharmaceutical storage solution - The substantial opportunities for the refrigeration industry. With rising global demand for vaccines, biologics, and temperature-sensitive medications, healthcare and life sciences sectors require precise, reliable cooling systems that ensure product integrity and regulatory compliance. The need for temperature uniformity and constant monitoring is driving investments in specialized refrigeration units.

  Pharmaceutical storage requires ultra-low temperature freezers, stability chambers, and cold chain logistics solutions designed for strict industry guidelines such as GMP, WHO, and US FDA standards. These systems must also provide real-time alerts, fail-safe mechanisms, and remote access functionality to ensure uninterrupted operation and mitigate product loss.

  As immunization programs, clinical trials, and pharmaceutical manufacturing scale up, the need for robust, scalable storage infrastructure grows. Governments, hospitals, and research institutions are increasing their budgets for cold storage equipment, resulting in demand for systems with flexible temperature ranges and validated performance.

  Manufacturers who specialize in medical-grade refrigeration with energy efficiency, data logging capabilities, and compliance-ready documentation are poised for strong growth. The sector's long-term demand is driven by both regulatory expectations and a growing emphasis on healthcare reliability and pandemic preparedness.

Key players in Condensing Unit Market include:

• Emerson Electric Co
• Danfoss Group
• Carrier Global Corporation
• BITZER Kühlmaschinenbau GmbH
• GEA Group AG
• Baltimore Aircoil Company
• Johnson Controls International plc
• LU-VE Group
• Mitsubishi Electric Corporation
• Heatcraft Worldwide Refrigeration

In this report, the profile of each market player provides following information:

• Company Overview and Product Portfolio
• Market Share Analysis
• Key Developments
• Financial Overview
• Strategies
• Company SWOT Analysis