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The variable frequency drive market size is forecast to increase by USD 7.59 billion at a CAGR of 5.51% between 2023 and 2028. Market growth analysis hinges on various factors, notably the escalating demand from commercial HVAC and refrigeration applications, driven by the need for effective climate control solutions. Additionally, there is a growing imperative for energy-efficient equipment across industrial facilities, propelled by increasing environmental consciousness and the pursuit of sustainable practices. Furthermore, regulatory mandates mandating the use of Variable Frequency Drives (VFDs) in industrial settings further bolster market expansion. These regulations underscore the importance of energy conservation and drive the adoption of VFDs to optimize energy consumption and enhance operational efficiency. As industries strive to comply with stringent regulations and achieve sustainability goals, the demand for VFDs as well as intelligent pump and control systems is expected to continue its upward trajectory. Thus, the market is poised for significant growth, fueled by a confluence of increasing demand from key sectors and regulatory drivers advocating for energy efficiency and environmental stewardship. Our market report examines historical data from 2018-2022, besides analyzing the current and forecasted market scenario.
The operations of global food and beverage companies are expanding in APAC. Therefore, the focus on food safety and inspection systems has started increasing in the region. ABB Ltd. company offers variable frequency drive solutions such as Control Board RDCU 12C plus Crane Software, IGBT Module. Also, Danfoss AS company offers variable frequency drive solutions such as VLT and VACON AC drives.
Market Forecast 2024-2028
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In the realm of industrial automation, variable frequency drives (VFDs) play a pivotal role, offering dynamic torque control and adjustable speed for enhanced efficiency. They are integral to energy-saving initiatives, particularly in sectors like the metal & mining industry where reducing CO2 impact is crucial. With features like energy efficiency and integration with the Industrial Internet of Things (IIoT), VFDs contribute to HVAC systems and integrated building management systems, aligning with renewable energy sources and Corporate Social Responsibility goals. Additionally, they bolster cybersecurity in smart grid environments and facilitate hybrid VFD systems for diverse applications. Our researchers studied the market research and growth data for years, with 2023 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.
VFDs find major applications in heating, ventilation, air conditioning, and refrigeration (HVAC and R), which account for a major part of electricity consumption in industrial facilities. Therefore, the demand for VFDs for HVAC and R applications has increased substantially. On average, HVAC and R systems account for approximately 20%-30% of the overall industrial energy consumption in the US. In addition, stringent government regulations for reducing energy consumption have further propelled the demand for VFDs in HVAC and R applications.
Additionally, the heating, cooling, and ventilation costs of industry operators also represent a significant proportion of their overall operating costs. Thus, end-users persistently focus on increasing operational efficiency while reducing overall energy consumption. This is encouraging process and discrete industries to shift toward using VFDs in HVAC and R systems. This is providing high growth opportunities for VFD market players in HVAC and R applications, thereby spurring the growth of the market during the forecast period.
VFDs integrated with IoT platforms enable the real-time monitoring of motor performance, energy consumption, and operating condition s. IoT sensors collect data from VFDs and connected equipment, allowing operators to identify potential issues, predict failures, and perform preventive maintenance to avoid costly downtime. A diverse range of industrial devices, such as motors, drives, and sensors, which are used for manufacturing or commercial purposes, are equipped with embedded technology and are a part of the industrial IoT network. IoT-enabled VFDs enable remote control and management via web-based interfaces or mobile applications.
Moreover, the development of next-generation VFDs with advanced technologies will help companies gain an edge over their competitors. Technological advances enable companies to develop advanced equipment that meets the expectations of end-users. Some companies offer VFDs with advanced and comprehensive features that can monitor, have communication capabilities, and report system performance quality. Also, the advent of IoT in electronic devices and the ease of operating machines at manufacturing plants are expected to increase the demand for IoT-enabled VFDs during the forecast period.
Major issues such as overvoltage and undervoltage with respect to VFDs occur while operating them with the incorrect power supply. These drives require a proper power supply to work efficiently. This is because the control panels in VFDs can vary the frequency only when they receive a fixed voltage. To resolve this issue, VFDs are integrated with harmonic mitigation devices. However, such devices increase the size and overall cost of VFDs. In addition, cooling facilities are required to regulate the heat and improve the performance of VFDs, leading to increased costs.
Additionally, the other factors that increase the cost of VFDs include customization requirements and the rising horsepower capacity of VFDs. VFDs provide a better ROI over the long run. However, end-users must make significant initial investments when compared with economical alternatives in motor control methods such as throttling valves or hydraulic couplers. These are usually used with pumps to control the speed of pumping operations. Thus, such factors may hamper the growth of the market during the forecast period.
The market thrives on its integral role in heating, ventilation, and air conditioning systems, enabling energy efficiency initiatives. Offering versatility, VFD (Variable frequency drives) cater to diverse needs with options like AC drive, DC drive, and servo drive, covering a wide power range. They are indispensable in sectors like electric vehicle and building management system, where precise control and optimization are paramount, driven by the demand for electric motors and sustainable solutions.
The food and beverage segment will account for a major share of the market's growth during the forecast period. The manufacturers of food are adopting energy-efficient equipment to compete in a highly fragmented global food and beverage industry. Variable frequency drives are aiding food and beverage manufacturers not only in fulfilling the sanitary regulatory requirements but also in ensuring an energy-efficient solution for food processing, which is expected to augment the demand for variable frequency drives in the food and beverage industry during the forecast period.
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The food and beverage segment was valued at USD 4.75 billion in 2018. The majority of processes in the food and beverage industry involve the use of motors and motor-related equipment. The motors are mostly used for tasks such as food processing, cold supply, and ventilation. Variable frequency drive aids in reducing energy consumption during the cleaning process. Furthermore, minor machine failures in continuous process lines can have a hugely detrimental effect on overall productivity. Therefore, features such as advanced drive diagnostics aid in reducing the overall troubleshooting time and preventing unnecessary trips in the case of a breakdown of machines. This ensures uninterrupted process flow.
Based on type, the market has been segmented into low-voltage drives and medium-voltage drives. The low-voltage drives segment will account for the largest share of this segment. As variable frequency drives find major applications in controlling low and medium voltage motors, the increasing demand for low and medium voltage motors provides a high growth opportunity for the companies of low voltage variable frequency drives. Further, soft starters are more cost-efficient than variable frequency drives in low-voltage motor applications. Soft starters provide smooth motor start and stop functionalities. This factor is expected to restrain the growth rate of the low voltage variable frequency drives segment of the global variable frequency drives market during the forecast period.
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APAC is estimated to contribute 42% to the growth by 2028. Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. Many small and medium enterprises (SMEs) have also started adopting automated material handling and packaging systems to compete with global companies. Factors such as rising demand for food and beverages, growing population, and increasing disposable income are significantly driving the growth of the industry in APAC. Growing investments in the food and beverage industry will significantly drive the demand for variable frequency drives in the region during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Emerson Electric Co., Fuji Electric Co. Ltd., General Electric Co., Hitachi Ltd., Honeywell International Inc., Invertek Drives Ltd., Johnson Controls, Mitsubishi Electric Corp., Nidec Corp., Rockwell Automation Inc., Schaffner Group, Schneider Electric SE, Siemens AG, Spoc Automation Inc., Toshiba Corp., WEG S.A, and Yaskawa Electric Corp.
Technavio market forecast the an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market is witnessing significant growth driven by the increasing demand for energy-efficient products and compliance with regulations like the Ecodesign Regulation (EU). VFDs, including DC drives and low-power range types, are becoming essential components across various industries, such as conveyors, electric fans, and extruders. These drives enable precise control of motor speed, leading to enhanced motor life and reduced energy consumption, particularly in applications like chillers and Variable Valve Timing systems in automobiles. With a focus on eco-friendliness and sustainability, VFDs are being adopted in emerging economies to drive efficient industrial equipment and optimize processes in factories and industrial robots. Additionally, advancements in smart manufacturing practices and grid interfaces are further propelling the adoption of VFDs across power industries and transportation sectors.
Further, the market caters to various sectors, offering solutions like low-power range types and medium power range frequency drives. VFDs optimize automobile output and enhance centrifugal load service efficiency, retrofitting existing motors for better performance. They control motor shaft speed, powering shaft-driven fans and rotors with precision. VFD motors enable dynamic braking and accommodate thermal expansion, making them indispensable in the power and industrial sectors. They facilitate energy-efficient devices and process optimization, supporting applications in pump storage, carbon capture, and hydrogen generation systems across the national grid. The market thrives on collaborations with local vendors, offering diverse voltage classes and compact designs for versatile drive cabinet installations.
Market Scope |
|
Report Coverage |
Details |
Page number |
187 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.51% |
Market Growth 2024-2028 |
USD 7.59 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.35 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 42% |
Key countries |
US, China, Japan, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., Danfoss AS, Eaton Corp. Plc, Emerson Electric Co., Fuji Electric Co. Ltd., General Electric Co., Hitachi Ltd., Honeywell International Inc., Invertek Drives Ltd., Johnson Controls, Mitsubishi Electric Corp., Nidec Corp., Rockwell Automation Inc., Schaffner Group, Schneider Electric SE, Siemens AG, Spoc Automation Inc., Toshiba Corp., WEG S.A, and Yaskawa Electric Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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