The HVAC industry is always in a state of flux, with trends, regulations, and market demands shifting continually. But in the rooftop units (RTU) sector, several converging forces are driving heightened demand, urging HVAC professionals to remain agile in their planning, training, and inventory management. What worked last season might not necessarily suffice this time around. So, what are these game-changing factors?

A Booming Construction Market and Replacement Equipment Demand

The construction boom is undeniable. The Dodge Construction Network reported a 25% increase in construction starts for commercial and multifamily residential buildings in 2022 over 2021. On top of this, 2021 also saw a 16% jump from the previous year. Farooq Mohammad, Vice President of Commercial Business at Rheem, pinpointed the extraordinary growth to the influx of federal pandemic relief money channeled towards new HVAC systems in schools and small businesses.

This surge is not just confined to new constructions. At Rheem, almost half of the RTUs sold cater to emergency replacements, and another 25% for planned ones. This indicates a robust, consistent demand across different segments.

Regulatory Shifts and Their Impacts

The Department of Energy’s (DOE) efficiency standards are not new to the industry. However, 2023 brought about heightened minimums for commercial products. Such regulations might seem daunting initially, but manufacturers like Daikin Applied and Johnson Controls took them in stride, given the generous lead time. These firms realigned their product offerings to ensure compliance.

Interestingly, Johnson Controls witnessed a surge in demand for 2022 RTU models, just before the new standards came into effect. Some customers, foreseeing the upcoming changes, opted to stock up on older units. This phenomenon underscores the importance of HVAC professionals to anticipate market trends and adjust their offerings and inventory accordingly.

The Shift Towards a Greener Future

Environmental concerns are pushing the HVAC industry in new directions. Enhanced tax incentives and state legislations are nudging the sector towards greener solutions. Notably, there’s a noticeable uptick in demand for rooftop units fitted with heat pumps as they offer both heating and cooling solutions. This preference marks a transition from traditional air conditioner-gas furnace combinations, driven by the broader push towards electrification, decarbonization, and significant corporate ESG goals.

Major players in the corporate world, like Amazon, Apple, and Walmart, are championing net-zero initiatives, thereby fostering a demand for electrified HVAC solutions. With various states passing legislation to discourage or outright ban the use of fossil fuels, the momentum towards heat pumps is only going to accelerate. This sentiment was echoed by Matt Schlegel, a commercial product manager at Johnson Controls, who expressed the firm’s anticipation of growing demand in the coming years.

However, despite this emerging trend, a/c-gas furnace combinations still dominate sales, highlighting the market’s complex, multifaceted nature.


While macroeconomic concerns like inflation or the potential onset of a recession loom large, the RTU market remains resilient, driven by pent-up demand and the continued impact of pandemic-related financial support.

For HVAC professionals, this landscape suggests two things. Firstly, understanding and anticipating the market trends is paramount. What was effective in addressing last season’s needs might fall short now. Secondly, and perhaps more crucially, the broader industry trajectory underscores the critical importance of continuous training and adaptation. With regulations shifting, technological innovations advancing, and market demands evolving, HVAC professionals must stay ahead of the curve.

In this ever-evolving landscape, adaptability isn’t just a trait—it’s a necessity. Professionals should be prepared to plan their team training and inventory based on the changing trends, always striving to meet the demands of the season.

tl;dr: The HVAC rooftop units market is experiencing heightened demand due to a construction boom and the need for replacement equipment. Regulatory changes, like the DOE’s enhanced efficiency standards, have shifted product offerings, while environmental incentives are driving a move towards greener solutions, notably heat pumps. Despite macroeconomic concerns, the sector remains strong. HVAC professionals must stay adaptable, understanding market trends and ensuring continuous training to navigate this evolving landscape effectively.