Heat Pump Market Size, Share, & Industry Analysis, By Source (Air-Source, Water-Source, and Geothermal), By Capacity (Up to 10 kW, 10-20 kW, and Above 20 kW), By End-User (Residential, Commercial, and Industrial), and Regional Forecasts, 2024-2032

The global heat pump market size was valued at USD 86.10 billion in 2023. The market is projected to grow from USD 89.01 billion in 2024 to USD 203.42 billion by 2032, exhibiting a CAGR of 10.88% during the forecast period.

A heat pump system extracts heat from the outside air and transfers it inside a house or building. The device inside the home or building uses electricity to increase the temperature of the heat pulled from the outdoor air. It also delivers cooling by moving warm indoor air to the outside.

The global heat pump market growth is driven by increasing adoption of energy-efficient technologies, government support for renewable energy, and the urgent need to reduce carbon emissions. Over the forecast period, the integration of heat pumps with renewable energy sources, stringent regulations promoting energy efficiency, and the technological advancements are expected to drive market growth.

The COVID-19 pandemic negatively impacted the global market. This was due to the pause in manufacturing activities, which led to an imbalance in demand and supply. In addition, the unavailability of raw materials, shutdown of import and export of goods, and closure of borders impacted the market growth. According to industry analysis, the national sales of air-source heat pumps in China in the first half of 2020 were down by 25.78% from the same period last year.

Heat Pump Market Trends

Rising Significance of Renewable Energy Sources Will Back Market Growth

The rising demand for renewable energy sources, such as solar and wind power has resulted in higher government subsidies and a better focus on the consumption of these energy sources in various sectors, including residential and commercial. This is important as the sales of household appliances are constantly growing, leading to frequent electricity usage throughout the day. The growing consumption of electricity from renewable sources will help the market grow as it is one of the appliances that needs a higher amount of electricity.

Heat Pump Market Growth Factors

Rising Interest in Energy-Efficient Heat Pump to Drive Market Growth

Energy-efficient heat pumps are becoming popular owing to their impressive performance and sustainability advantages. Sales of pumps have grown rapidly in recent years, driven by their applications and advantages. According to the U.S. Environmental Protection Agency, modern heat pumps can reduce energy use by 30-60% compared to the old-style heating systems. In Europe, the installation of pumps has increased by 10% annually, backed by strict energy regulations. This growth highlights the shift toward more efficient, eco-friendly heating and cooling solutions in response to climate change and rising energy costs.

Growing Government Support for Promoting Adoption of Heat Pumps to Bolster Market Growth

Growing investment in HVAC technologies is significantly propelling the market growth. These investments are driving innovation and scaling production, making heat pumps more accessible and cost-effective. Governments worldwide are also contributing through incentives and subsidies. For instance, the U.S. Inflation Reduction Act offers up to USD 2,000 in tax credits for pump installations. As a result, the market is projected to expand from 18 million units in 2023 to 27 million by 2027. This figure is expected to grow in the future owing to the rising popularity of pump technologies.

RESTRAINING FACTORS

Low Awareness Regarding Heat Pump Technologies to Hinder Market Growth

The modern heat pump technologies deliver several advantages including, energy efficiency, and environmental advantages among others. Beside this the sales are slowing down. Lack of awareness among the public regarding technological advancements in heat pumps is a major hurdle to the market’s growth.

Heat Pump Market Segmentation Analysis

By Source Analysis

Energy Efficiency of Air-Source Heat Pumps to Boost Their Sales

By source, the market is segmented into air-source, water-source, and geothermal.

Air-source heat pump market growth is driven by its advantages in energy efficiency. It has been the most widely sold pump for 5 consecutive years. Air-source heat pumps are leading the market expansion, due to its advantages like lowest installation costs, high seasonal performance coefficients, and versatile heating and cooling capabilities.

Water-source is one of the fastest-growing segments, driven by advantages, such as superior indoor air quality, easy maintenance, and lower price. These pumps has the ability to maintain operational efficiency, which makes them a preferred choice for most of the geographic locations.

The geothermal segment is also accounting for a major market share and is expected to grow during the forecast period. Geothermal heat pumps represent the most advanced segment, characterized by constant temperature supply, extremely low pollution levels, and exceptional energy efficiency. These systems deliver consistent performance independent of external temperature fluctuations, positioning them as a premium solution for sustainable heating and cooling.

By Capacity Analysis

Rising Interest in Lower Capacity Products Drives Sales of Up to 10 kW Heat Pumps

By capacity, the market is segmented into up to 10 kW, 10-20 kW, and above 20 kW.

The up to 10 kW is considered the dominating segment owing to its use in most of the residential buildings. Standard homes require a lower capacity of heat pumps. Hence, the growing sales of smaller capacity pumps is driving the segment’s growth.

The 10-20 kW capacity segment is one of the fastest-growing segments, driven by its application in commercial buildings, such as hotels, gyms, and malls. Heat pumps of above 20 kW capacity are only seen in industrial settings; this segment holds an ample market share. Growing industrial applications is one of the key drivers of the segment’s growth.

By End-User Analysis

Increasing Demand for Pumps in Homes Augmented Growth of Residential Segment

By end-user, the market is categorized into residential, commercial, and industrial.

The residential segment accounted for the highest heat pump market share owing to the rising demand for pumps in residential buildings. These pumps are widely used for space heating and cooling in all climates.

The commercial segment is one of the fastest-growing segments owing to the rising applications of pumps in offices, hotels, and malls and their rising demand in the modern infrastructure.

Expansion of the heat pump technology is also driving the use of product in industrial settings, across various applications, this is expected to drive the growth of the industrial segment.

REGIONAL INSIGHTS

The market is studied geographically across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

Asia Pacific accounted for a major share of the market owing to rising investments in pumps. In 2023, as per the data by the International Energy Agency, investment in industrial capacity for solar PV, batteries, wind turbines, electrolyzers, and heat pumps surged by 70% last year. China and Japan are the dominating countries in the region and are expected to grow in the coming years.

North America is more focused on energy-efficient products, such as heat pumps. The U.S. is actively participating in various initiatives to meet the zero carbon emission targets. This is one of the major factors that make the regional market grow rapidly. For instance, in 2022, the total heat pump shipments were around 4.3 billion in the U.S., which is more than the previous year.

Europe is one of the fastest-growing regions in the global market. The rise in the sales of these pumps in recent years is due to their growing demand in residential and commercial sectors. France, Germany, and Italy are some of the countries holding major shares of the global market. As per the European Heat Pump Association, around 45 million heat pumps will be installed by 2030 in Europe.

Latin American countries are slowly but surely focusing on energy-efficient products, thereby helping the market grow in the region. The market in the Middle East & Africa is expected to grow in the coming years as many residential and commercial projects are using pumps on a large scale.

KEY INDUSTRY PLAYERS

Competitive Landscape For This Market Is Characterized By Increasing Investments In Advancing Their Product Portfolio For Heat Pumps 

The market is growing at a strong pace due to investments and strong product portfolios offered by leading market players, such as Danfoss, LG Electronics, Inc., and Hitachi, Ltd. Danfoss is one of the leading global players delivering pump services. It has been launching electrification products for many years and provides quality services to multiple sectors.

LIST OF TOP HEAT PUMP COMPANIES:

• Danfoss (Denmark)


• Daikin Industries, Ltd. (Japan)


• Robert Bosch GmbH (Germany)


• Johnson Controls, Inc. (Ireland)


• LG Electronics, Inc. (South Korea)


• Hitachi, Ltd. (Japan)


• Ingersoll Rand Plc. (U.S.)


• HAIER (China)


• Panasonic Holdings Corporation (Japan)


• Carrier (U.S.)


• Fujitsu (Japan)


• Samsung (South Korea)

KEY INDUSTRY DEVELOPMENTS:

• September 2024 – Samsung Electronics introduced the Bespoke AI Laundry Combo to the European market. The Bespoke AI Laundry Combo will be controlled by AI, heat pump technology, and a 7” display to deliver a convenient, entertaining laundry experience that is also energy efficient.


• August 2024 – LG introduced two new residential air-to-water heat pumps that will utilize propane refrigerant and have a seasonal coefficient of performance of more than 5. Moreover, it can attain a flow temperature of 75^oC, even when it is -15^oC outside.


• April 2024 – Daikin, a branch of Japanese manufacturer Daikin Industries, announced the launch of its first-ever propane (R290) air-to-water residential heat pump, the Altherma 4 HS-S+ series, which will come in four sizes: 8, 10, 12, and 14kW (2.3, 2.8, 3.4, and 4.0TR).


• May 2024 – British Gas introduced the U.K.’s lowest heat pump rate of 14p/kWh to boost the adoption of affordable, low-carbon technology and encourage the adoption of heat pumps. Homes could save up to USD 500 by switching to a heat pump, utilizing the new rate, and capping their gas meter.


• April 2024 – YORK, a heat pump manufacturer, launched its 575-volt, energy-saving air-to-water heat pump. The new product will help decarbonize heating and cooling for the Canadian market.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, product capacity, and top end-use industries for the product. Besides, it offers insights into the market trends and highlights key industry developments. In addition to the factors listed above, the report encompasses several factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation