NORTH AMERICA VARIABLE FREQUENCY DRIVE MARKET ANALYSIS
The North America variable frequency drive market is estimated to be valued at US$ 5,754.8 Mn in 2024 and is expected to reach US$ 7,804.6 Mn by 2031, exhibiting a compound annual growth rate (CAGR) of 4.4% from 2024 to 2031.
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The growth of the market can be attributed to increased industrial automation and rise in construction activities in the region North America.
Energy efficiency and cost savings
Variable frequency drives are capable of delivering significant energy savings and reducing costs for organizations. By allowing precise control of motor speed, VFDs can optimize motor performance for different applications and workload requirements. This leads to substantial energy cost reductions compared to constant speed motors which operate at full power all the time irrespective of the actual needs.
VFDs play a big role in enhancing process efficiency through features like soft start acceleration and deceleration. This reduces mechanical wear and tear on motor components extending their lifespan. Fewer replacements mean lesser maintenance and repair costs. VFD controlled motors also experience less thermal cycling that leads to less motor winding failures. The ability to control torque output helps protect cost sensitive machinery from damage. Overall, the total cost of ownership is lower with VFDs over the long run due to energy and maintenance saving benefits.
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Opportunity: Increasing demand for automation and process control
There is growing emphasis on automation and digitization of industrial processes across various sectors in North America. Manufacturing industries are automating discrete and continuous production lines to improve product quality, maximize output and gain competitive advantage. Process industries require tight control of parameters like pressure, flow, temperature for safety and regulatory compliance. VFDs are a crucial part of implementing automation solutions as they enable remote centralized control and monitoring of multiple motor-driven systems over industrial networks.
VFDs facilitate precision process control capabilities through dynamic motor speed variation. This allows manufacturers to finely tune energy-intensive operations like heating, cooling, mixing, and grinding according to real-time production demands. Automating these processes with VFDs enhances overall equipment effectiveness. Industries are also installing VFDs for energy management and optimization purposes in building automation applications like HVAC, lighting and refrigeration systems. The demand is further stimulated by the need to reduce human intervention in manufacturing and streamline plant floor operations through industrial internet of things technologies. All these trends point towards a growing market share of variable frequency drives.
Key Takeaways from Analyst:
The North America variable frequency drive market is expected to witness steady growth over the forecast period driven by strong demand from the process and discrete industries. The oil and gas sector will continue investing in VFDs to optimize motor control in upstream and downstream operations. Moreover, rising investments to boost energy efficiency in industrial facilities through the adoption of VFD controlled pumps and fan applications will propel market growth. However, availability of replacement technologies offering similar benefits can restrain the market growth to some extent.
The U.S. currently dominates the North America variable frequency drive market owing to the presence of large industrial and manufacturing base. Meanwhile, growing investments to modernize critical infrastructure also makes Canada an important market. Going forward, replacement demand as older drives reach end of life is likely to open new opportunities. The discrete manufacturing industry especially food and automotive production will emerge as key end-users.
Meanwhile, water and wastewater industry present lucrative avenue for growth as aging infrastructure gets upgraded. As regulations regarding energy efficiency get stringent, adoption of VFDs is expected to increase considerably across commercial buildings and HVAC applications. However, the market may face short term challenges due to ongoing supply chain disruptions impacting component availability. Any signs of slowing investments in the process industries can also negatively impact the demand.
Market Challenges: Complexity of VFD systems and need for skilled labor
The North America variable frequency drive market faces significant challenges associated with the complexity of VFD systems and the need for skilled labor. VFD systems incorporate sophisticated control algorithms and power electronics that require experienced engineers to design, commission, and maintain. However, there is currently a shortage of technicians and engineers with the necessary training to work with VFDs. This skills gap can discourage end users from adopting VFD technology and slow the growth of the market. It also means that installation and support services are expensive due to high labor costs. VFD manufacturers must invest in extensive training programs to build up the workforce with skills in working with complex variable speed control systems. They also need to focus on developing simplified drive configurations and easy-to-use programming interfaces to reduce the engineering expertise required. Addressing the lack of qualified professionals through workforce development efforts is a major challenge that the industry will need to overcome to achieve further penetration of VFD systems.
Market Opportunities: Expansion in the Renewable Energy Sector
The North America variable frequency drive market is presented with significant opportunities for growth through the expansion of the renewable energy sector. VFDs play a vital role in applications such as wind turbines, pumps for solar thermal plants, and extraction of alternative fuels. They allow for the precise control of motor speed that is required for maximum efficiency. With the strong policy push for increased adoption of clean energy in both the United States and Canada, investment and development of renewable sources such as wind, solar, and hydropower is growing rapidly. This widespread installation of renewable infrastructure will drive immense demand for associated control and electrical equipment including VFDs. VFD manufacturers can capitalize on this opportunity by developing advanced drive solutions customized to meet the technical requirements of renewable applications. Partnerships with major renewable project developers are expected to boost the market growth.
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Insights By Voltage - Expanding industrial automation drives adoption
In terms of voltage, the low voltage (less than 1 kV) segment is expected to contribute 61.5% share of the market in 2024 owing to its widespread adoption across industrial automation applications. Low voltage drives are used extensively to control electric motors used in conveyor belts, packaging equipment, and other automated machinery in the manufacturing industry. As factories increasingly invest in robotics, IoT sensors, and other Industry 4.0 technologies to modernize operations and improve productivity, the demand for low voltage drives controlling these automated systems continues growing. Their compact size and ease of use also makes them well-suited for controlling small to medium horsepower motors used in many industrial automation solutions.
Insights By Application - Rising HVAC equipment upgrades
In terms of application, the pumps segment is expected to contribute 32.1% share of the market in 2024 due to the growing need for pumping systems in commercial and residential construction. However, the demand for variable frequency drives is also increasing rapidly from the HVAC segment. Stricter building energy codes are prompting more facilities and infrastructure managers to retrofit existing HVAC systems with VFDs. They allow precisely controlling the speed of air handling unit fans and cooling tower pumps based on the actual cooling or heating load. This delivers significant energy savings compared to constant speed operation. The need to optimize older HVAC systems is driving more contractors and building engineers to incorporate VFDs.
Insights By End-use Industry - Focus on industrial energy efficiency
In terms of End-use Industry, the industrial segment is expected to contribute 43.4% estimated share of the market in 2024 as manufacturing facilities seek to cut energy costs through process optimization. Variable frequency drives play a key role in enabling industrial energy management strategies. They are widely installed on motors powering centrifugal fans, pumps and other loading equipment to dynamically vary speed according to real-time process needs. This improves process control while trimming electricity usage substantially compared to constant speed motor operation. As industries face pressures to improve efficiency and reduce carbon footprints, investments will continue in applications like these that enhance plant energy efficiency through flexible motor control with VFDs.
North America Variable Frequency Drive Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 5,754.8 Mn |
| Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
| Forecast Period 2024 to 2031 CAGR: | 4.4% | 2031 Value Projection: | US$ 7,804.6 Mn |
| Geographies covered: |
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| Companies covered: |
ABB Ltd., Delta Electronics, Inc., Eaton Corporation, Fuji Electric Co., Ltd., General Electric Company, Hitachi, Ltd., Honeywell International Inc., Inovance Technology, NIDEC Corporation, Parker Hannifin Corporation, Rockwell Automation, Inc., Schneider Electric SE, Siemens AG, TMEIC Corporation, and Yaskawa Electric Corporation |
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| Restraints & Challenges: |
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*Definition: The North America variable frequency drive market is a segment of the electrical engineering industry that provides electronic devices used to control the speed of AC motors by varying the frequency and voltage supplied to the electric motor. Variable frequency drives are used in a wide range of industrial applications such as fans, pumps, conveyors and compressors in different industries including Oil & Gas, Energy & Power, Food Processing and Automotive across countries in North America like the U.S. and Canada.
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About Author
Ramprasad Bhute is a Senior Research Consultant with over 6 years of experience in market research and business consulting. He manages consulting and market research projects centered on go-to-market strategy, opportunity analysis, competitive landscape, and market size estimation and forecasting. He also advises clients on identifying and targeting absolute opportunities to penetrate untapped markets.
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