Europeans' Air Conditioning Habit
－History and background
If you have been to Europe, you might have noticed that Air Conditioners are not used as commonly as compared to Japan where it is used in almost every household, office building and store. It’s harder to find a household that does not use Air Conditioners in Japan.
Only 20% of households in Europe have Air Conditioners installed, whereas in the US and Japan more than 85% of households have Air Conditioners installed.
Are Europeans against the usage of Air Conditioning? Why are Air Conditioners so rare in Europe?
The three major reasons are cultural, territorial and climatic characteristics.
Up until the ‘’Heatwaves’’ started, most of Europe’s climate was mild with very little humidity. Europe only really experienced ‘’hot weather’’ for about Two Months. (Generally hotter in Southern Europe).
Thermal insulation in homes has been widely recognized across Europe for centuries, which keeps homes cool in Summer, warm in Winter. It is also a preferred method to control temperatures inside the house because it can reduce energy consumption. Because of this reason many grew up without Air conditioners, which made Europeans more comfortable with warmer temperatures inside their homes compared to other Nationalities.
Over the recent years summer temperatures across the globe has gotten hotter and hotter. It is becoming unbearable to live without Air Conditioning during the summer months.
Heatwaves are now common in the European region, with summer temperatures reaching up to 45 Celsius, breaking record highs. It is now more and more common for Europeans to buy Air Conditioners for residential and commercial purposes. Unlike before, many Europeans are now considering Air Conditioners as a necessity and will continue to rely on it to combat soaring temperatures. Urbanization, new building construction and increase in disposable income are the other key factors for the rapid growth of the HVAC market in the European region.
The Air Conditioning Systems market has long been dominated by the U.S. and Japan. Popular brands such as Daikin, HITACHI, Sanyo, Mitsubishi, Panasonic, Fujitsu, Toshiba, Sharp, Whirlpool, Carrier and Trane all have significant market share in the European industry. Companies like Daikin and Mitsubishi have set up subsidiaries and acquired shares of local AC companies in an effort to further strengthen its presence in Europe.
Chinese and Korean brands are currently on the rise and companies like Haier, Gree Electric, Midea Group, Samsung and LG are among some of the promising names in this competitive industry.
European companies such as De'Longhi and Electrolux are also gaining its market share as a local air conditioner brand.
Air Conditioning in European Countries
Like most of the European countries, air conditioners are definitely not something ubiquitous in the United Kingdom. When people from other continents visiting England, oftentimes many of them would find it very surprising that their hotel does not have air conditioning units installed! As a matter of fact, the market demand in the entire country was merely 110,000 air conditioning units and its AC market is worth a little less than 700 million euros in 2018(although the growth rate was the highest in Europe in 2019). Only around 3% of residential homes in the U.K. have air conditioning. One of the obvious reasons why air conditioners are not very common in the U.K. is that heating needs are far more demanding than that of cooling, because winter is very lengthy in the country. Even there are boiling summer days that exceeds 32 degrees Celsius in the U.K., they don’t normally last more than 2 weeks! For people living in big cities like London, the lack of air conditioning has been a problem not only at home but on public transportation. As most trains already have heating, they will not be fully equipped with air conditioners until as early as 2030.
Located in the southern part of the Nordic countries, Denmark is surprisingly characterized by a mild climate with four distinct seasons. Like in most of the countries in Northern Europe, air conditioning is not particularly prevalent as the temperatures are not high even in summer, and they usually drop significantly at night. Even hotels here are not always fully equipped with air conditioning units, let alone households in most areas. However, the extraordinary heat waves that Denmark has experienced in the past few years is gradually changing its heating, ventilation, and air conditioning (HAVC) market.
Summer in Finland is usually mild and pleasantly warm, although it can sometimes get pretty cold at night. Average temperatures range from 57 °F in the north to 64.5 °F in the south. However, there are also short but hot periods where the highest records could be around 90 °F to 93 °F in the southern areas of Finland. Finnish housing has long been designed to keep warm air inside, but as average temperatures continue to increase and the dramatic heatwaves that have struck the region in recent years, demands are growing fast and there are more people buying air conditioning units than ever before in the country. As the climate continues to warm, Finnish housing will need to adapt to hotter summers by installing air conditioners to help residents cope with the heat.
France is considered one of the big air conditioning markets in Europe. Its market is worth over 1 billion euros in 2018 and the growth rate was at 13% in 2019. Currently only around 5% of residential homes in France have air conditioners but sales of air conditioning units have surged in recent years. The market demand in the country was 485,000 air conditioning units in 2018 and it’s growing rapidly each year. However, Air conditioning is still not particularly prevalent in most commercial and residential buildings. The many old, thick-walled stone buildings in the country are part of the reason as it can be quite difficult to set up air conditioners. There are also strict restrictions that prevent any modifications necessary to install air conditioning units in historic buildings. Sadly, the lack of air conditioning and heatwaves in summer can be fatal, as there were more than 14,000 people died in France during the record-breaking heat wave in 2003.
Météo-France, the national meteorological service of the country, has also warned that the number of extreme heat waves is expected to double in the not too distant future.
Germany is also considered to be one of Europe’s largest heating, ventilation, and air conditioning (HAVC) markets. It is worth over 1 billion euros in 2018 and the growth rate was at 6% in 2019. Even only about 3% of residential homes in Germany have air conditioners, more than 50 percent of German office buildings are fully air conditioned. As heat waves are becoming increasingly much more frequent and common like its neighboring countries due to human-caused climate change, the German market demand for air conditioning reached 130,000 AC units in 2018 and the sales are picking up at a steady pace.
Summer in Germany can be scorching hot and there are days that would easily exceed 38 degrees Celsius in certain areas.
Cities here are not designed to deal with the soaring temperatures and certain historic buildings are not even allowed to install a modern cooling system. Air conditioning is getting popularity in the country but still not widespread enough in most commercial and residential buildings. During heat waves, portable cooling units and fans are quickly sold out in stores, and people are using social media to exchange information on finding air-conditioned places nearby. Air conditioners have gradually become an essential of everyday life for Germans.
The Netherlands is considered the smallest air conditioning market in Europe. The market demand in the country was only 54,000 air conditioning units in 2018.
There is no "Air Conditioning Culture" in the Dutch society. Even there are summer days that would exceed 40 degrees Celsius during heat waves, these periods usually don’t last very long (a week or two). In general, Dutch buildings are designed specifically to help trap heat inside during the long, cold weather and few people feel the need to install air conditioning. The demand for air conditioners has slightly increased in the past few years due to climate change impacts. More people are searching for air conditioners on the internet, according to data from popular local online trading sites, but still not to a significant level.
Italy is the biggest heating, ventilation, and air conditioning (HAVC) market in Europe. The country tops the chart with its market worth a touch over 1.5 billion euros in 2018 and a growth rate of 9% in 2019. About 7% of residential homes in the country have air conditioners. The Italy market demand for air conditioning reached 1.1 million AC units in 2018, and sales of air conditioners for homes and businesses are growing each year at a rapid pace.
Summer in Italy can be dreadfully hot and humid. Traditionally, Italians believe that the cold breeze coming from an air conditioner can be bad for one's health, so they would rather endure the summer heat with perhaps nothing more than a fan. For hotels, restaurants, schools, and other public facilities, it is really not a strange thing if they do not have air conditioners installed at all. There are even energy-saving laws in Italy that would limit AC minimum temperatures or prohibit the use of AC during certain time of year!
However, unlike the older generations, modern Italians have adopted the culture of air conditioning like Americans and Japanese do. With brutal heat waves that break new records every year in the country, air conditioning has now become a life-saving necessity in the summertime when temperature can hit as high as 38 degrees Celsius in certain regions.
Summers are hot in Spain. The average temperature remains more than 24 degrees Celsius. In cities like Madrid and Toledo, summer days can be as roasting as 38 degrees. But just like many of its neighboring countries in southern Europe, air conditioning in Spain is not as prevalent as other parts of the world like America and Japan. Currently around 30% of residential homes in Spain have air conditioners, the number is higher in warmer cities like Seville where 70% of houses are air-conditioned. The Spanish market for air conditioning is worth about 895 million euros in 2018 and the growth rate was at 9% in 2019. The AC units in the country have steadily increased in the past few years and the market demand reached 600,000 air conditioning units in 2018. Split unit air conditioner is currently the most common type of air conditioning unit in Spain.
Summer season in Greece is long and hot under the burning Mediterranean sun. Temperature can hit as high as 45 degrees Celsius in cities like Athens during heat waves, and it is not unusual for many areas of the country to experience temperatures in the 40 degrees range. To fight against the country's notorious summer heat, an estimated 99 percent of households in Greece have air conditioning installed. Greek authorities have also made it mandatory for employers to provide air-conditioned areas for their workers. The Greece market demand for air conditioners reached 238,000 AC units in 2017.
Future Development of the Market
Although the Covid-19 Pandemic has affected many industries including the HVAC market, the overall global HVAC equipment market, which was worth $171.1 billion in 2020, is forecast to grow up to $290.8 billion by 2030.
The market driving factors include the construction rush in emerging countries, energy conservation efforts across the globe, investment in smart houses. In addition, the introduction of building automation systems, the development of climate change mitigation refrigerators, and the use of renewable energy for household heating systems has the potential to create new trends.
Let’s look at the European region. We have also seen a huge growth recently as mentioned earlier and forecast to grow even more. The overall European air conditioning market was at $ 14.64 billion in 2016, and the market is expected to reach $ 18.74 billion by 2022.
As the market grows, demands for Air Conditioners become more consistent, manufacturers are facing new challenges as the European regions have advanced environmental policies and regulations compared to other nations as Air Conditioners are subject to EU ecodesign requirements.
With the rising demand for Air Conditioners in Europe and across the globe, what does the future hold for the Air Conditioning and the overall HVAC market? Manufacturers need to understand the needs of consumers but also will need to comply with environmental impacts and comply with ever changing energy and environmental laws.
【Air Conditioning in Europe｜INABA note vol.1】