Japanese AC manufacturer taps demand for efficient inverters and heat pumps.

OSAKA — With worldwide electricity demand from air conditioners set to skyrocket in the coming decades, global market leader Daikin Industries is seeking new energy-saving methods to maintain its edge over rivals like Samsung.

The International Energy Agency estimates 3,350 gigawatts of generating capacity will be needed to meet global demand for space cooling in 2050, up roughly fourfold from 2016, as adoption spreads in emerging markets like India and African nations.

This growth is too large to be met by new power plants or incremental improvements to conventional air conditioners. Manufacturers are finding other avenues to boost efficiency, from Samsung’s monitoring software to Daikin’s heat pumps.

One core market for Daikin is the U.S., where the Japanese manufacturer has received a boost from the January 2023 tightening of previously weak energy-efficiency standards for air conditioners.

The company enjoys brisk demand for its Fit systems, which incorporate inverter technology refined in Japan into the central air conditioners typically used in the U.S. It aims to sell 500,000 units in fiscal 2025, more than six times the figure for the current fiscal year.

Daikin’s overall North American sales are forecast to grow 14% this fiscal year to 1.52 trillion yen ($10.1 billion), putting its long-sought goal of becoming the top seller of air conditioners in the U.S. in reach in fiscal 2025.

“Even if [Donald] Trump returns to the presidency, the overall trend won’t change,” a Daikin executive said, referring to the industry’s push for energy savings.

Daikin President Masanori Togawa flew in October to Poland, where the manufacturer is investing 300 million euros ($321 million) in a new factory producing energy-efficient heat pumps, which regulate temperature by transferring heat. Heat pumps have gained traction in Europe, and though sales have softened recently amid a drop in gas prices, work on the plant is proceeding as planned.

“We can’t lose to other companies on speed,” Togawa said.

In Japan, Daikin fueled a year-on-year drop in energy use at Aeon even amid last summer’s record heat. Aeon is Japan’s top retailer, with around 16,000 locations including malls, and consumes roughly 1% of the country’s electricity.

The manufacturer surveyed the air conditioners at Aeon stores to identify the old units that most needed replacing and swapped them out for newer, more energy-efficient systems.

“We were able to save energy without losing customer satisfaction,” an Aeon representative said.

Energy management is becoming key to competition in the industry. Samsung Electronics announced a partnership with Tesla at the CES consumer technology trade show in January, under which Samsung’s app for monitoring energy use by home appliances will be linked to Tesla’s electric vehicles and home battery systems.

Daikin is keeping a close eye on the tie-up between the two giants. Tesla at one point sought to work with Daikin, but nothing came of it.

“We’ll break away from the idea of keeping everything in-house, and leverage partnerships and acquisitions,” Chairman Noriyuki Inoue said.