Heating and cooling account for nearly half of all energy consumed in buildings, generating around 2.5 gigatonnes (Gt) of CO₂ annually. As urbanization and economic growth continue, the global building stock is projected to double by 2060, placing enormous pressure on energy and accelerating emissions unless transformative measures are taken.
These trends highlight the urgent need for energy-efficient and low-carbon heating and cooling for buildings. By reducing dependence on fossil fuels, such innovations can cut emissions, enhance grid flexibility, and strengthen energy security.
The technologies explored in this article highlight how innovations in heating and cooling can reshape the energy footprint of today’s buildings and ensure that the next generation of infrastructure is designed for a low-carbon future.
Innovation landscape in heating and cooling for buildings
The innovations highlighted below present promising pathways to transform heating and cooling in buildings. These solutions aim to boost energy efficiency, lower greenhouse gas emissions, and contribute to global climate targets while enhancing energy security.
By tackling the sector’s key challenges, they are paving the way for low-carbon technologies to be cleaner, smarter, and more sustainable.
The Net Zero Insights Market Compass showcases these innovation pathways in a structured, multi-layered framework that brings clarity to the evolving heating and cooling innovation landscape.
HVAC systems
Heating, Ventilation, and Air Conditioning (HVAC) systems form the backbone of modern buildings, maintaining optimal indoor temperatures and air quality. Innovations in HVAC focus on boosting energy efficiency, lowering emissions, and enhancing system intelligence.
New-generation systems combine efficient heat pumps, advanced cooling technologies, and electric heating solutions to deliver year-round comfort with minimal environmental impact.
Heat pumps
Heat pumps have emerged as a leading solution for decarbonizing space and water heating. Instead of generating heat through combustion, they transfer existing heat between indoor and outdoor environments making them two to four times more efficient than conventional boilers.
Global deployment of heat pumps is accelerating rapidly with installed capacity projected to rise from around 1,000 GW in 2021 to nearly 2,600 GW by 2030, potentially cutting global CO₂ emissions by at least 500 million tonnes annually.
Two major variants dominate the market:
- Air-source heat pumps draw heat from ambient air to warm indoor spaces, or operate in reverse for cooling.
- Ground-source heat pumps extract or dissipate heat through the stable temperatures of the earth, providing higher efficiency but requiring greater installation investment.
HVAC load reduction
HVAC load reduction focuses on minimizing energy demand through improved design and building envelope technologies. These improvements directly lower system strain and operational costs. Even simple adjustments such as fine-tuning temperature set points can meaningfully reduce the cooling load and generate energy savings.
Passive cooling leverages architectural design and environmental conditions to maintain comfortable indoor temperatures naturally. Key innovations include insulation materials that limit heat transfer, solar shading systems and reflective coatings that block unwanted heat gain, and optimized natural ventilation that enhances airflow. Green roofs and vegetated facades further support cooling by offering natural insulation and mitigating heat absorption.
Passive heating is designed to capture, store, and retain natural warmth during colder months. These include high-performance glazing that allows beneficial solar radiation, window coatings that balance sunlight with insulation, and the use of thermal mass materials that absorb daytime heat for gradual release overnight.
Building HVAC optimisation
Heating, ventilation, and air conditioning (HVAC) systems are among the largest energy consumers in buildings. Inefficient systems also increase maintenance costs and the risk of system failures.
Recent innovations in this space combine automation, data analytics, and artificial intelligence (AI) to create smarter, more responsive HVAC systems. Interconnected systems allows for precise, real-time adjustments that maintain comfort while minimizing energy use like:
- Smart thermostats powered by AI can automatically adjust temperature and airflow based on real-time conditions, occupancy patterns, and user preferences.
- Building Management Systems act as centralized control hubs, integrating IoT-enabled sensors that provide continuous data on temperature, humidity, and energy usage.
HVAC systems operate under varying conditions like fan speed, ambient temperature, and occupancy levels. To achieve efficiency requires intelligent decision-making. Machine learning algorithms excel at processing this dynamic data, identifying patterns, predicting system behavior, and making proactive adjustments.
Refrigerant solutions
Refrigerants are specialized fluids that enable heating and cooling systems in air conditioners, refrigerators, and heat pumps to transfer heat efficiently. When refrigerants leak, they can significantly increase a building’s carbon footprint. Even small leaks contribute to greenhouse gas emissions, undermining energy efficiency gains achieved through advanced system design.
Hydrofluorocarbons (HFCs) are the most widely used refrigerants. While effective as cooling agents, they pose serious environmental risks. When released into the atmosphere, HFCs act as potent greenhouse gases with extremely high global warming potential (GWP). For example, 1 kg of the common refrigerant gas R-410A has a GWP equivalent to 2,088kgCO2e.
As global demand for cooling continues to rise, the climate implications of refrigerants have become a central focus in decarbonizing buildings.
- Natural refrigerants such as carbon dioxide (CO₂), ammonia (NH₃), and other chemicals are gaining traction due to their low global warming potential and strong thermodynamic efficiency.
- Solid and low-GWP refrigerant technologies are being developed to replace high-impact gases. For example, U.S.-based Pascal is pioneering solid refrigerant materials that perform effectively within standard HVAC temperature and pressure ranges but with drastically lower environmental footprints.
- Advanced monitoring and recovery systems are improving safety and sustainability. Companies like the UK-based Climate-i are developing predictive leak-detection and gas-management solutions to minimize HFC emissions used across industrial cooling and energy systems.
Thermal energy storage
Thermal Energy Storage (TES) encompasses a range of technologies that capture and store energy as heat or cold for later use. TES supports grid stability, enhances energy flexibility, and helps balance intermittency in renewable energy supply. For large buildings, TES can also reduce the capacity and cost requirements of heat pumps needed for space and water heating.
TES systems are typically categorized by how energy is stored through sensible, latent, or thermo-chemical means:
- Sensible heat storage relies on heating or cooling a medium such as water or rocks. Large-scale installations often use underground tanks or aquifer thermal energy storage (ATES) systems that leverage groundwater as a natural heat sink.
- Latent heat storage uses materials that absorb or release energy during phase changes, such as ice melting into water. It enables compact and efficient energy storage several times higher than sensible heat storage.
- Thermo-chemical storage employs reversible chemical reactions to capture and release energy. These systems can achieve up to 20 times the energy density of sensible storage and discharge heat at variable temperatures depending on the chemical process used.
Water heaters
Water heating remains one of the most energy-intensive technologies deployed in buildings, second only to space heating and cooling. Conventional systems that rely on gas combustion or electric resistance account for 17–32% of total household energy use.
Heat pump water heaters
Heat pump water heaters represent a key decarbonization technology, cutting both emissions and household energy costs. Unlike conventional units that generate heat directly, they transfer heat from surrounding air to water, operating like a refrigerator in reverse. This approach makes them two to four times more efficient than standard gas or electric-resistance systems.
The most advanced models use 80–85% less energy than the least efficient gas and electric-resistance water heaters. Heat pump water heaters can avoid up to one ton of CO₂ emissions per year when replacing gas units. By leveraging electricity instead of combustion, heat pump systems align with renewable integration and provide a scalable pathway to low-carbon building operations.
Solar Thermal Water Systems
Solar thermal water heating systems use solar energy to warm a collector fluid in rooftop panels, which then transfers heat to stored water. This solution is best suited for buildings with steady hot water demand and ample sun-exposed roof space.
Transforming the built environment through smarter technologies
The transition from conventional HVAC systems to advanced, low-carbon heating and cooling technologies represents one of the most powerful levers to decarbonize the built environment. Beyond cutting emissions, these solutions improve system reliability, lower operating costs, and reduce overall energy demand.
New technologies integrating intelligent system design, advanced energy management, precise leakage detection, and AI-driven optimization are accelerating this transformation. Together, they are redefining how heating and cooling systems are designed, operated, and maintained across residential, commercial, and industrial buildings.
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