5 Reasons Why Hybrid VRF Systems Will Lead HVAC Trends in 2025
Key Highlights
- Hybrid VRF merges heat pump technology with water-based hydronics to improve energy efficiency and zone-specific comfort.
- Growing energy costs and diverse building needs are driving demand for flexible, cost-effective HVAC solutions like hybrid VRF.
- Technological innovations such as IoT and AI are making hybrid VRF systems more practical, efficient, and easier to maintain.
- Environmental benefits, including reduced refrigerant risks and water-based operation, enhance hybrid VRF's appeal amid climate concerns.
- The current property market and renovation trends create a favorable environment for the adoption of hybrid VRF systems in new and existing buildings.
Variable refrigerant flow (VRF) systems have gained increased attention since their emergence decades ago. Their high efficiency, ability to operate zones independently and support for simultaneous heating and cooling have only become more relevant with age. Now, hybrid VRF stands to take these advantages further.
Hybrid VRF combines the heat pump-adjacent operation of a conventional VRF system with hydronics. Chemical refrigerants may still serve cooling purposes, but water is the primary transfer medium for both heating and cooling. Some manufacturers have been making these hybrids for years, but 2025 could be the year they leave their mark on HVAC trends. Here is a closer look at why.
1. The Need for Efficiency Is Growing
The biggest force behind hybrid VRF today is the rising demand for efficiency. Consumers and businesses alike want energy-efficient solutions, and in many cases, it has little to do with sustainability. Rather, it’s a matter of cost.
Residential electricity prices have risen by 13% between 2022 and 2025. That is at least the seventh consecutive year of rising rates, and those cost increases have outpaced inflation in the last three years. Amid this trend, homeowners and property managers, regardless of their stance on climate issues, can see the value in efficient HVAC.
Combining hydronics and VRF provides a best-of-both-worlds scenario in terms of energy efficiency. These systems’ zoned heating and cooling ability offers further benefits, as it removes wasted power from switching between the two and provides greater precision.
2. Buildings Have Diverse Heating and Cooling Needs
Buildings, both residential and commercial, also carry diverse HVAC needs. VRF’s zone functionality is an ideal solution amid this demand, and hybrid systems’ additional safety and cost-effectiveness make them the best way forward.
The need for different heating and cooling levels between rooms is more than a matter of individualism. Mixed-use properties are also gaining popularity, with apartments in such developments quadrupling between 2012 and 2021 amid a demand for convenience. Ongoing housing shortages have also fueled the rise of multiuse buildings, which carry more distinct HVAC discrepancies between rooms.
As the population grows and new housing remains scarce in 2025, more properties will require different heating and cooling levels between specific floors or rooms. Commercial buildings like hospitals and multi-company offices carry the same requirements. Hydronic VRF solutions will become increasingly valuable as more people realize this need.
3. New Technologies Make Hybrid VRF More Practical
Hybrid VRF systems are also becoming easier to justify as a purchase. As with many newer, high-efficiency HVAC solutions, VRF’s upfront costs and complexity have been its largest adoption barrier. However, new technologies are coming out that improve the return on investment.
Internet of Things (IoT) connectivity is a major innovation in this field. There will be 32.1 billion active IoT connections by 2030, and many of these devices can provide real-time temperature data and automatically adjust HVAC systems accordingly. Combining IoT with hybrid VRF means each zone can operate with minimal waste, adding to this technology’s already significant efficiency benefits.
Artificial intelligence (AI) can also make VRF and hydronic setups more convenient. AI models can detect early warning signs of damage or suggest operational changes as they notice trends in IoT data. As a result, they make maintenance easier and less expensive while enabling even greater energy savings.
4. Climate Concerns Are as Prominent as Ever
While the financial benefits of modern VRF may be its biggest adoption driver, hybrid setups’ environmental benefits matter, too. Government support for sustainability initiatives may be waning, but climate threats have grown increasingly prominent. Severe weather has become five times as common over the past five decades and now causes 74% of economic losses.
Amid these unmistakable threats, more eco-friendly hybrid systems have an advantage over conventional VRF. In addition to boasting higher energy efficiency, hybrid solutions pose fewer environmental risks because of their use of water instead of synthetic refrigerants. Leaks pose fewer dangers to the surrounding ecosystem, and water does not produce hydrofluorocarbons.
Many of these environmental advantages have positive health effects. Those may be all the more relevant to residents and property managers in 2025 as attention to public health and severe weather events increases.
5. The Building Market Is Prime for HVAC Upgrades
Demand for hybrid VRF will heat up this year because the current property market lays an ideal foundation for HVAC upgrades. Home renovation spending is projected to increase by 1.2% in 2025, which may not be much, but this uptick follows two years of decline. Consequently, the shift signifies a growing interest in home improvement.
New construction is also rising. Recently finished projects now account for roughly 30% of available single-family homes on the market—more than double the historical average. This shift suggests modern homebuyers may consider newly built homes more heavily than usual.
Both of these trends affect the HVAC market in the same way. Newer, more complicated installations like hybrid VRF systems are more viable, as people are either building new projects from the ground up or are renovating existing ones. Such an investment may mean more consumers consider an upgrade like VRF when they may otherwise stick to conventional options.
Remaining Challenges in the Hybrid VRF Market
Naturally, some obstacles remain before hybrid VRF can reshape the HVAC industry. While it has gotten increasingly cost-effective over the years, its initial expense is still high. As such, it will likely see the most success in new construction and high-end projects in 2025, with broader adoption taking longer to catch up.
Combination hydronic-VRF solutions are also less widely publicized than alternatives like heat pumps. This lack of awareness may mean missed market opportunities. More building and construction professionals and homeowners will need to learn about this technology to recognize how they can benefit from it.
Hybrid VRF Systems Offer Many Advantages
Given its relatively niche status, hybrid VRF technology will not become the biggest HVAC segment for buildings in 2025. However, it is on the cusp of significant growth. While it may not take over this year, the coming months could be a turning point for these high-efficiency heating and cooling solutions.
As attention to VRF and the trends behind its adoption grow, so too will this market. Implementing these hybrid systems in modern buildings could yield substantial improvements in energy consumption, sustainability and convenience. Those benefits are too promising to ignore.
About the Author
Emily Newton
Emily Newton is an industrial and tech journalist passionate about how technology is revolutionizing each sector. She has been writing and editing professionally for more than five years and is the editor-in-chief of Revolutionized.