Commercial Heat Pump Market

The Commercial Heat Pump Market is segmented based on heat source, and the segments are air-source heat pumps, water-source heat pumps, and ground-source heat pumps. During the 2023 base year, air-source heat pumps accounted for approximately 60% of the global market revenue. This segment leads the market, as air-source heat pumps have lower installation and maintenance costs compared to other heat sources. Furthermore, the air-source heat pumps segment is expected to dominate the heat-source segment throughout the forecast period and is expected to account for over 55% of global market revenues by 2032.

Thus, as air-source heat pumps are increasingly adopted in commercial buildings, the heat-source segment is anticipated to grow. 

The Application segment is critical in shaping the Commercial Heat Pump Market market. In the context of key applications, Space Heating has seen an increase in 2023 and holds the largest share of the market, which is more than 40% of the revenue. The growing interest in energy-efficient heating in commercial buildings will only result in an increase in the popularity of this Application among customers in countries with cold climates. 

The segment Water Heating occupies the second place by the market share and is expected to grow steadily over time with the increase in the number of commercial properties’ owners that resort to commercial heat pumps for heating of water in their establishments. Space Cooling is quite a new segment and the one with the least market share; however, the growing number of commercial buildings with air conditioning systems in countries with warmer climates will only increase the market share of this Application in the segment in the future. 

The Commercial Heat Pump Market segmentation by Capacity is divided into Small (10 kW), Medium (10-100 kW), and Large (100 kW). The Medium Capacity segment held the largest market share in 2023, accounting for over 45% of the Commercial Heat Pump Market revenue. This is due to the increasing adoption of medium-capacity heat pumps in commercial buildings, such as offices, schools, and hospitals. 

The Small Capacity segment is expected to grow at the highest CAGR during the forecast period, owing to the rising demand for energy-efficient heating and cooling solutions in small commercial spaces. The Large Capacity segment is also expected to witness significant growth, driven by the increasing construction of large commercial buildings, such as warehouses, factories, and data centers.

The End-User segment of the Commercial Heat Pump Market is categorized into Commercial Buildings, Industrial Facilities, Institutional Buildings, and Multi-family Buildings. Commercial Buildings hold the largest market share due to rising demand for energy-efficient solutions in offices, retail spaces, and other commercial establishments. In 2023, the Commercial Buildings segment accounted for approximately 45% of the Commercial Heat Pump Market revenue. 

Industrial Facilities are another significant end-user segment, driven by the need for heating and cooling in manufacturing plants and warehouses. Institutional Buildings, such as schools, hospitals, and government buildings, also contribute to the market growth, as they require reliable and efficient heating and cooling systems. Multi-family Buildings, including apartments and condominiums, are expected to witness increasing adoption of commercial heat pumps owing to their ability to provide both heating and cooling in individual units.

The installation segment of the Commercial Heat Pump Market is bifurcated into new construction and retrofit. The new construction segment is expected to account for a larger share of the market in 2023, owing to the growing construction of commercial buildings across the globe. The retrofit segment, on the other hand, is anticipated to exhibit a higher growth rate during the forecast period 2024-2032. This growth can be attributed to the increasing need for energy-efficient solutions and government initiatives promoting the adoption of heat pumps in existing commercial buildings.

In 2023, the new construction segment is expected to account for approximately 84.3% of the Commercial Heat Pump Market revenue, while the retrofit segment is projected to hold a 15.7% share. By 2032, the revenue share of the new construction segment is expected to reach 80.2%, while the retrofit segment is anticipated to account for 19.8%.