Cooling shipments hit 7-month growth streak
The biggest data story of the week is AHRI's August 2026 shipment report, released October 12. Combined U.S. central air conditioner and air-source heat pump shipments reached 756,739 units in August — an 11.4% increase over August 2025 and the seventh consecutive month of year-over-year growth. Central A/C units led at 418,323 (up 17.2%), while heat pumps contributed 338,416 (up 5.0%). Year-to-date combined shipments stand at 6.39 million units, up 6.2% (ACHR News).
Heat pumps accounted for 44.7% of combined cooling shipments in August — the second-highest percentage for the month in AHRI's reporting history. Over the past decade, heat pump shipments have grown 57.6%, and from 2022 to 2026 heat pumps have consistently exceeded 40% of July's combined totals. Utility Dive notes heat pump shipments were up roughly 77% since July 2016, while A/C-only units grew 40% over the same period (UtilityDive).
Not every category was up. Gas warm-air furnace shipments declined 4.3% to 287,710 units, while oil furnaces posted a surprising 27.1% gain to 3,052 units — extending a six-month growth streak. Residential water heaters remained soft. The Q2 2026 recovery was strong: combined A/C and heat pump shipments totaled 2.78 million units, up 11.3% from Q2 2025 (ACHR News).
Global HVAC market projected to $347.56 billion by 2034
Research and Markets released its global HVAC equipment market report on October 20, projecting the market to grow from $237.53 billion in 2025 to $347.56 billion by 2034, at a CAGR of 4.32%. Growth drivers include rapid urbanization, stringent energy-efficiency regulations, increasing demand for improved IAQ, and adoption of smart controls, connected platforms, and AI-enabled diagnostics. The transition away from fossil fuel boilers is strengthening heat pump demand in both residential and commercial buildings (GlobeNewswire / Research and Markets).
Carrier reported data center revenue doubling to $1 billion in 2025, with a backlog stretching into 2028. Vertiv, the data-center power and thermal specialist, gained 36% over the year as AI-driven data center construction fueled demand for precision cooling. Commercial HVAC remains the industry's bright spot, even as residential markets reset (The Closing Print).
Refrigerant regulations: four markets, five different moves
DNARENS published a comprehensive analysis this week clarifying that the 2026 refrigerant landscape is not a uniform tightening — regulators in four major markets did five different things (DNARENS):
| Market | Action | Effective |
|---|---|---|
| China | R-22 VRF production ban (Notice No. 42) | Jan 1, 2027 |
| United States | 700 GWP installation deadline for R-410A withdrawn | Jul 27, 2026 |
| European Union | HFC quota flat; GWP≥2500 servicing ban in effect | Jan 1, 2026 |
| New Zealand | Regulated refrigerant product stewardship scheme | Apr 1, 2027 |
| IEC (global) | IEC 60335-2-40: A3 charge limit raised from 150g to flexible LFL-based | Published 2026 |
China's Notice No. 42, published September 2, 2026, prohibits production of multi-split (VRF) units using HCFC-22 from January 1, 2027 — the only new hard deadline this quarter. The U.S. went the other direction: EPA withdrew the 700 GWP installation deadline for residential and light-commercial R-410A equipment, effective July 27, 2026, though the January 1, 2025 manufacture and import ban remains unchanged. The EU held its HFC quota flat at 42,874,410 t CO2e for 2025-2026, with the next step-down and Annex IV product bans coming January 1, 2027. New Zealand legislated a regulated product stewardship scheme for synthetic refrigerants effective April 1, 2027, projecting a 400,000-tonne CO2e reduction by 2030 (DNARENS; IBEE Testing).
IEC raises flammable refrigerant charge limits.The International Electrotechnical Commission approved an updated IEC 60335-2-40 standard that significantly raises charge limits for A2L and A3 refrigerants. For A3-class refrigerants like propane (R-290), the limit increases from a fixed 150 grams to flexible LFL-based calculations — up to 988 grams for wall-mounted split systems and 4.94 kg for standard split systems depending on room area. A2L charge limits also increased several-fold, enabling more powerful residential multi-split and VRF systems. This opens the door to wider adoption of natural refrigerants in residential equipment (HVAC Info).
China's R-290 breakthrough and product launches
Three Chinese industry standards on flammable refrigerants entered into force on September 1, 2026, removing key barriers to large-scale R-290 use in China's residential air conditioners — a market that produces more than 85% of the world's room AC units. The new standards revised charge limits, standardized installation and servicing procedures, and aligned with national energy-efficiency standard GB 21455, which gives preference to R-290 when assigning efficiency classes (HVAC Info).
Several product launches surfaced this week. Hisense introduced Hi-Hybrid R-290 M Series monoblock propane heat pumps in 4, 6, and 8 kW capacities for hybrid and all-electric configurations. Panasonic unveiled R-454C air-to-water heat pumps with 3-9 kW capacities for residential use. Samsung launched its EHS All-in-One heat pump in Europe, operating down to -25°C with R-32 refrigerant. Testing of Mitsubishi Electric's City Multi YXM VRF system with R-32 showed a 31% annual energy reduction compared to an R-410A system (HVAC Info; GlobeNewswire).
Oil heat at $6/gallon drives heat pump interest
With oil prices testing $6 per gallon in the Northeast, ACHR News reports contractors seeing a 30% increase in leads from homeowners asking whether heat pumps could lower their bills. The trend is noteworthy alongside the August oil furnace shipment increase of 27.1% — suggesting both replacement of aging oil systems and interest in heat pump conversions are happening simultaneously. Gas furnace shipments, by contrast, declined 4.3% in August (ACHR News).
Federal heat pump tax credits expired
The federal Section 25C heat pump installation tax credit and Section 25D geothermal heat pump credit under the Inflation Reduction Act expired on December 31, 2025. No residential heat pump installations in 2026 qualify for these federal tax credits, though state and utility rebate programs may still be available. Contractors should verify local incentive programs when quoting heat pump replacements (PracticeTestGeeks, verified against EPA, IRS, and Federal Register).
Policy and compliance notes
- DOE withdrew the commercial furnace test procedure on October 12 following industry opposition (HARDI).
- HARDI and AHRI urged New York City to revise costly A2L refrigerant requirements that exceed federal standards (HARDI).
- Potentially non-compliant HVAC equipment entering the market was flagged by HARDI on October 8, warranting distributor vigilance (HARDI).
- EPA Section 608 certification continues to apply to all technicians handling refrigerants, including A2Ls. Credentials do not expire, but A2L-specific training is recommended (PracticeTestGeeks).
- German HVACR associations formally called for PFAS restriction exemptions where no viable refrigerant alternative exists, noting A2L blends with GWP below 150 and zero temperature glide are entering certification (IBEE Testing).
Naming a product or manufacturer in this article is for identification purposes only and does not constitute an endorsement by HVAC Zone Inc. We are a multi-brand dealer and remain neutral on brand preference.
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