The global Variable Frequency Drive (VFD) market was valued at USD 16.23 billion in 2020 and is expected to reach USD 27.57 billion by 2028, growing at a CAGR of 6.9% from 2021 to 2028. A variable frequency drive, also known as an adjustable speed drive, is an electronic device that controls the speed of an AC motor by adjusting the frequency of the power supplied to it.
Variable frequency drives are used in a variety of applications across industries such as oil and gas, mining, water and wastewater, and HVAC systems. They provide energy savings, improved process control, and reduced maintenance costs. They are also used for soft starting of motors, which reduces mechanical and electrical stress on the motor and the driven equipment.
Executive Summary:
The global VFD market is expected to grow at a CAGR of 6.9% from 2021 to 2028. The market is driven by the increasing demand for energy-efficient solutions and the growing adoption of VFDs in various industries. The market is also driven by the increasing use of VFDs in HVAC systems, which has led to energy savings and improved indoor air quality. The market is expected to face challenges in terms of high installation costs, which may hinder the adoption of VFDs in certain industries.
Important Note:ย The companies listed in the image above are for reference only. The final study will cover 18โ20 key players in this market, and the list can be adjusted based on our clientโs requirements.
Key Market Insights:
- The global VFD market was valued at USD 16.23 billion in 2020 and is expected to reach USD 27.57 billion by 2028, growing at a CAGR of 6.9% from 2021 to 2028.
- The AC drive segment held the largest share of the market in 2020, owing to its widespread use in various applications such as oil and gas, mining, and water and wastewater.
- The low voltage drive segment is expected to grow at the highest CAGR from 2021 to 2028, owing to its increasing use in HVAC systems and other applications.
- Asia Pacific held the largest share of the market in 2020, owing to the presence of key market players and the growing adoption of VFDs in various industries in the region.
Market Drivers:
- Increasing demand for energy-efficient solutions
- Growing adoption of VFDs in various industries
- Increasing use of VFDs in HVAC systems
- Advancements in VFD technology
Market Restraints:
- High installation costs
- Technical complexities in installing and maintaining VFDs
- Limited awareness about the benefits of VFDs in certain industries
Market Opportunities:
- Growing demand for VFDs in the renewable energy sector
- Increasing adoption of VFDs in developing countries
- Rising demand for VFDs in the marine and water treatment industries
Market Dynamics:
The global VFD market is driven by the increasing demand for energy-efficient solutions and the growing adoption of VFDs in various industries. The market is also driven by the increasing use of VFDs in HVAC systems, which has led to energy savings and improved indoor air quality. The market is expected to face challenges in terms of high installation costs, which may hinder the adoption of VFDs in certain industries. However, the market is expected to grow in the coming years, owing to the advancements in VFD technology and the growing demand for VFDs in the renewable energy sector.
Regional Analysis:
Asia Pacific held the largest share of the global VFD market in 2020, owing to the presence of key market players and the growing adoption of VFDs in various industries in the region. The region is expected to continue to dominate the market during the forecast period. North America and Europe are also expected to witness significant growth in the coming years
Leading Companies in the Variable Frequency Drive Market:
- ABB Ltd.
- Siemens AG
- Schneider Electric SE
- Danfoss A/S
- Rockwell Automation, Inc.
- Mitsubishi Electric Corporation
- General Electric Company
- Hitachi, Ltd.
- Eaton Corporation plc
- Yaskawa Electric Corporation
Please note: This is a preliminary list; the final study will feature 18โ20 leading companies in this market. The selection of companies in the final report can be customized based on our client’s specific requirements.
Segmentation:
The global VFD market can be segmented based on type, voltage, power rating, application, and region. By type, the market can be segmented into AC drives and DC drives. By voltage, the market can be segmented into low voltage and medium voltage. By power rating, the market can be segmented into up to 40 kW, 41 to 200 kW, 201 to 600 kW, and above 600 kW. By application, the market can be segmented into oil and gas, mining, water and wastewater, HVAC systems, and others.
Category-wise Insights
- Low Voltage Drives: Widely used in commercial and light industrial applications.
- Medium Voltage Drives: Suitable for high-capacity industrial motors in heavy-duty sectors.
- HVAC Applications: VFDs control fan and compressor speeds, optimizing climate systems.
- Water & Wastewater Management: Ensure pump control, pressure regulation, and reduced energy use.
Key Benefits for Industry Participants and Stakeholders
- Enhances process control and operational flexibility.
- Reduces energy consumption and utility costs.
- Extends the lifespan of motors and mechanical components.
- Supports sustainability and regulatory compliance.
- Provides real-time monitoring and fault diagnostics.
SWOT Analysis
- Strengths: Proven energy-saving capabilities, versatile applications, increased equipment life.
- Weaknesses: High initial costs, technical training requirements.
- Opportunities: Digital integration, renewable energy, industrial retrofitting.
- Threats: Economic downturns, cheaper alternatives, harmonics issues.
Market Key Trends
- Emergence of smart VFDs with embedded sensors and AI.
- Focus on modular and compact design for easier installation.
- Integration with building management and industrial IoT systems.
- Use of VFDs in electric vehicle charging infrastructure.
Covid-19 Impact:
The Covid-19 pandemic has had a significant impact on the global VFD market. The pandemic has led to supply chain disruptions and delays in project execution, which have affected the demand for VFDs. However, the market is expected to recover in the coming years, owing to the growing demand for energy-efficient solutions and the increasing use of VFDs in various industries.
Key Industry Developments:
- In May 2021, Schneider Electric SE launched a new range of Altivar Process variable speed drives, which can help customers to save energy, optimize process control, and reduce downtime.
- In March 2021, ABB Ltd. announced that it had won a contract to supply VFDs to the Shetland HVDC link project in Scotland.
- In January 2021, Siemens AG announced that it had launched a new range of Simatic Micro-Drive drives, which are designed for use in small automation applications.
Future Outlook:
The global VFD market is expected to witness significant growth in the coming years, owing to the increasing demand for energy-efficient solutions and the growing adoption of VFDs in various industries. The market is also expected to grow, owing to the advancements in VFD technology and the growing demand for VFDs in the renewable energy sector. The low voltage drive segment is expected to grow at the highest CAGR from 2021 to 2028, owing to its increasing use in HVAC systems and other applications. Asia Pacific is expected to continue to dominate the market during the forecast period, owing to the presence of key market players and the growing adoption of VFDs in various industries in the region.
Conclusion:
The global VFD market is expected to witness significant growth in the coming years, owing to the increasing demand for energy-efficient solutions and the growing adoption of VFDs in various industries. The market is also expected to grow, owing to the advancements in VFD technology and the growing demand for VFDs in the renewable energy sector. Despite the challenges posed by high installation costs and technical complexities, the market is expected to grow in the coming years, and market players should focus on developing cost-effective solutions and educating potential customers about the benefits of VFDs.