Steam & Air-Conditioning Supply in the US Industry Market Research Report from IBISWorld Has Been Updated

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The recent surge in energy prices during the economic recovery helped invigorate the industry once again and, as a result, industry revenue is anticipated to grow. For this reason, industry research firm IBISWorld has updated a report on the Steam & Air-Conditioning Supply industry in its growing industry report collection.

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District energy heats and cools apartments, houses, schools, shops and office buildings

Despite the recession, the Steam and Air-Conditioning Supply industry has grown over the past five years. Consequently, industry revenue is expected to rise over the five years to 2013. Prior to the recession, construction firms built out commercial buildings, apartment complexes and other large buildings at accelerating paces amid ample credit availability. Building owners increasingly sourced district energy (centralized heating and cooling services off-site) to heat and cool their buildings. Using district energy often saved customers money in comparison to using natural gas for heating and cooling, while energy prices were skyrocketing in the three years to 2009. However, the recession reversed these trends and industry revenue growth slowed considerably. Nonetheless, the recent surge in energy prices during the economic recovery helped invigorate the industry once again and, as a result, industry revenue is anticipated to grow in 2013.

The Steam & Air-Conditioning Supply industry has high market share concentration, with the four largest firms (Con Edison, Veolia Energy, GDF Suez and NRG Energy Inc.) accounting for more than 50.0% of total industry revenue (see IBISWorld report 22133 for major player market shares). The high concentration reflects the ownership of many individual district energy systems by few corporations and the dense populations they serve. Market share has increased over the past five years as larger companies bought out smaller entities in order to expand, streamlining operations and upgrading technology in the process. For example, Veolia, an industry major player, purchased Tringen, an operator of district energy (centralized heating and cooling services) assets. Veolia continues its acquisition spree by purchasing three more district energy systems in Michigan, Mt. Laurel, and Portland. The acquisition trend is expected to continue despite the fact that some players still only have one or two operations in a particular city. As a result of amplified acquisitions activities, however, the number of firms operating in the industry is expected to fall in the five years to 2013.

According to IBISWorld Industry Analyst Justin Molavi, “The next five years are set to be brighter for the industry.” Players will increasingly use cogeneration in their operations to boost output. Cogeneration is a method to capture the waste heat created during the energy generation process and use it to create more energy. The switch to cogeneration will be smooth, as the acquisitions that took place over the previous five years will create economies of scale and enable large firms to easily integrate cogeneration into acquired companies. Additionally, many firms will also benefit from the construction of multi-family residences that were built during the recovery and will continue to be built over the next five years. “Industry firms will generate higher revenue by providing district energy to these buildings,” says Molavi. As a result of these trends, industry revenue is expected to continue growing at modest rate in the five years to 2018.

For more information, visit IBISWorld’s Steam & Air-Conditioning Supply in the US industry report page.

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IBISWorld industry Report Key Topics

Firms in the Steam & Air-Conditioning Supply industry provide district energy for heating and cooling. Typically, they generate hot and cold water or steam via closed mains systems to cool or heat commercial or residential buildings. The district energy activities of firms that have electricity generation operations are included as well.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
IBISWorld Inc.
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