HVAC Retrofit Trends in Aging North American Buildings

Opportunities and Challenges in Retrofitting HVAC Systems in Older North American Buildings

Across North America, aging infrastructure presents both a significant challenge and an unprecedented opportunity for HVAC innovation. Most buildings, especially pre-1990s buildings are still utilizing aged future-proof and inefficient HVAC systems that were not designed for today’s energy performance requirements or climate targets. As the region focuses on decarbonization, the retrofitting of HVAC systems found in older commercial and residential structures has been recognized as a major means of reducing emissions, ensuring improved indoor air quality, and minimizing long-term operational costs.

Whether a heritage property in Boston or a mid-century apartment complex in Toronto, HVAC retrofitting allows building owners to modernization their systems with no intention of pulling them down. The retrofit market is rapidly growing with the combination of policies, sustainability objectives, and the expensive cost of wasted energy.

Energy Efficiency: The Core Driver of HVAC Retrofits

The greatest short-term advantage of HVAC retrofitting is energy efficiency. Legacy systems have lower Seasonal Energy Efficiency Ratio (SEER) and Heating Seasonal Performance Factor (HSPF) ratings than new counterparts. This leads to increased energy consumption and unreliable climate control, particularly in erratic North American climates.

Retrofitting provides the potential to switch to variable refrigerant flow (VRF) systems, high-efficiency boilers, smart controls, or ductless mini-splits, each custom-fit to the unique building's design and occupancy pattern. All these enhancements dramatically lower the energy use profile of vintage structures, meaning lower utility bills and increased property value.

In Canada and the United States as well, property owners who make energy-efficient retrofits usually get rebates, grants, and tax credits, especially in provinces and states that have ambitious climate targets.

Sustainability and Climate Policy Alignment

Government policies are putting pressure on organizations to make upgrades to reach carbon targets. The U.S. Inflation Reduction Act (IRA) and Canada's Greener Homes initiative have allocated millions to retrofit existing energy systems. Localities like New York City are mandating local law 97 penalties for buildings and properties that do not meet their emissions targets. As a result, not only are HVAC heating and cooling system retrofitting an opportunity, but an obligation.

Strategies to help meet authorities’ regulation and targets could involve replacing legacy HVAC systems with models that use low GWP refrigerants or equipping spaces with demand control ventilation or heat recovery systems all decarbonization initiatives. For publicly funded institutions such as schools and local, regional and provincial government offices, a retrofit could indicate leadership in advancing sustainable development.

Occupant Comfort and Indoor Air Quality

In addition to enhancing energy efficiency, upgrading old HVAC systems can greatly improve indoor air quality (IAQ) and thermal comfort. Many older buildings have been designed without modern ventilation requirements and as a result have stale air, inconsistent temperatures, and limited humidity control.

Today’s retrofit approaches can also offer sophisticated filtration systems, fresh air and humidity control which help to manage health impacts and facilitate healthier indoor environments. For owners of facilities and property managers, good indoor air quality (IAQ) generates positive tenant retention, good reviews, and regulatory compliance with a changing environment of IAQ codes and certifications such as WELL and RESET.

Technical and Structural Retrofit Challenges

While there are benefits to retrofit approaches, there are barriers to overcome with HVAC retrofitting in some older buildings, as issues such as structural limitations, low ceilings, existing ductwork and existing electrical service limitations all create challenges. In conservation buildings, rules to limit the impact of modifications often constrain any visible changes or major structural modification.

So with retrofits, the need for custom design work from custom engineering is very high as is coordination between mechanical engineers, architects and building officials. The use of technologies such as ductless systems, packaged rooftop units, or hydronic upgrades are common methods of navigating barriers but while still producing and efficient system.

For an in-depth analysis of market trends, regulatory drivers, and forecast opportunities, read our North America HVAC Market

A Strategic Investment in North America's Built Environment

HVAC retrofits are not solely an investment in sustainability, but also an investment in long-term operational efficiency, occupant wellness, and compliance. As millions of buildings across the United States and Canada utilize outdated systems, the retrofit opportunity fits right into the ESG zeitgeist.

Banks, real estate developers, institutional owners, and public policymakers are beginning to acknowledge HVAC retrofits as an element of future-ready infrastructure. As technology becomes increasingly modular, low-disruption, and digital, the retrofit pathway is becoming more apparent.

The North American wave of HVAC retrofits will be successful if technology providers, contractors, building owners, and government work together to overcome all current obstacles so that all buildings, old and new, can participate in what could be a more sustainable, efficient, and comfortable built environment.