Europe Heat Pump Market Size was valued at USD 14.6 Billion in 2022. The Heat Pump market industry is projected to grow from USD 16.0 Billion in 2023 to USD 34.7 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 10.10% during the forecast period (2024 - 2032). The growing need for effective space heating technologies, along with the rapid advancements in building infrastructure, are the main market drivers anticipated to propel the Heat Pump market in Europe.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Favorable governmental policies promoting energy efficiency and carbon footprint reduction are expected to drive market CAGR growth in the foreseeable future. Governments worldwide are offering subsidies, incentives, tax credits, and rebates to encourage the adoption of energy-efficient heat pumps, thereby stimulating demand in the heat pump industry. In 2022, the European Union's primary energy consumption exceeded the 2030 target by 26.7% but fell 4.2% below the 2020 target. Final energy consumption surpassed the 2030 target by 23.3% but was 1.9% below the 2020 target. The International Energy Agency (IEA) reports that energy intensity improvement accelerated from 0.8% per year (2000-2010) to 1.7% per year (2010-2022), resulting in substantial CO2 emissions reductions. In the NZE Scenario, energy intensity improvement is projected to increase to 4% per year on average this decade, potentially avoiding around 10 Gt CO2 per year by 2030.
The demand for heat pumps in Europe is significantly influenced by the growing emphasis on sustainability and energy conservation. Heat pumps use less energy than traditional systems since they transfer heat rather than create it, making them extremely effective for heating and cooling areas. This is in line with international initiatives to improve energy efficiency and lower carbon emissions. For instance, on July 25, 2023, Europe concluded the legislative process to bolster the Energy Efficiency Directive, which came into effect in all member countries on October 10, 2023. This directive aims to reduce EU final energy consumption by 11.7% by 2030 compared to projected levels based on the 2020 reference scenario, translating to specific targets of 992.5 million tonnes of oil equivalent for primary energy consumption and 763 Mtoe for final energy consumption by 2030. Thus, driving the Europe Heat Pump market revenue.
The Europe Heat Pump market segmentation, based on Product, includes Air Source, Ground Source, and Water Source. The air source segment dominated the market. The air source heat pump segment in Europe is poised for significant growth until 2032, driven by increasing demand for reliable, user-friendly, and efficient space heating systems in both residential and commercial settings. This trend is fueled by the growing preference for ambient temperatures. Air source heat pumps offer numerous benefits, such as low maintenance requirements, compact size, affordability, and ease of installation, which contribute to their rising popularity. For instance, in June 2022, Trane introduced an expanded range of air-source heat pump units featuring R-454B refrigerant. These units, equipped with 4 Sintesis Balance CMAF tubes, provide efficient heating and cooling with capacities ranging from 150 kW to 1,400 kW. Regulatory bodies are increasingly focused on replacing traditional heating systems with clean and sustainable alternatives like heat pumps, which will further bolster the air source heat pump industry in the region.
The Europe Heat Pump market segmentation, based on Application, includes Residential and Commercial. The residential segment dominated the market. The surge in urbanization, coupled with the increasing demand for energy-efficient products, is projected to propel the market for heat pumps in the residential sector. Manufacturers are prioritizing residential decarbonization efforts to reduce CO2 emissions. For instance, Daikin recently introduced a comprehensive plan aimed at transforming residential heating and cooling systems. According to Daikin, approximately 36% of all CO2 emissions in the European Union originate from the building stock, highlighting the importance of deploying heat pumps in new residential constructions. This trend is driving the demand for heat pumps across the region. Despite the challenges posed by the COVID-19 pandemic, residential construction has experienced significant growth in many markets. For example, the German construction sector was expected to generate sales of EUR 151 billion in 2022, marking a 5.5% increase from 2021, as reported by the country's leading construction associations, ZDB and HDB. The robust performance of the residential construction sector in Germany has remained resilient amidst the pandemic, contributing to the overall market growth.
Figure 1: Europe Heat Pump Market, by Application, 2023 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Key drivers expected to propel growth in the heat pump market during the forecast period include the escalating imperative to reduce reliance on fossil fuels, seek energy-efficient alternatives to traditional heating and cooling systems, and respond to shifting global climate conditions. Germany, abundant in renewable energy sources, offers advanced and suitable heat pump solutions to meet consumer needs. According to the Federation of European Heating, Ventilation and Air Conditioning Associations, 87% of the European market volume was sold in only ten countries. The five biggest European heat pump markets in 2020 were France (394,129 units sold; −0.7% growth vs. 2020), Italy (232,834; +12.2%), Germany (140,390; +37.2%), Spain (127,856; −0.2%), and Sweden (107,723; +4.4%). The biggest absolute gains were achieved in Germany (38,040), Italy (25,324), Poland (18,504), the Netherlands (13,475) and Denmark (5,117). In relative terms, seven markets showed substantial increases above 10%. The government's backing through the implementation of favorable policies and financial schemes, such as financial assistance, subsidies, and tax incentives, has further incentivized the adoption of heat pumps. For instance, in January 2023, the German government modified its incentive program to encourage the adoption of sustainable heating methods, including heat pumps employing natural refrigerants. The updated regulations provide a base subsidy rate of 25% and can cover up to 40% of the costs related to the purchase and installation of heat pumps. Additionally, government efforts to promote environmentally friendly building infrastructure, coupled with a strong emphasis on reducing carbon emissions from building stock, will enhance the dynamics of the national industry.
Figure 2: Europe Heat Pump Market Share By Country 2023 & 2032 (Usd Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Leading market players are investing heavily in research and development to expand their product lines, which will help the Heat Pump market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the Heat Pump industry must offer cost-effective items.
Major players in the Heat Pump market are attempting to increase market demand by investing in research and development operations, including Trane, Viessmann, Bosch Thermotechnology Ltd., Panasonic Corporation, STIEBEL ELTRON GmbH & Co. KG, Gree Electric Appliances, Inc., SAMSUNG, NIBE Industrier AB, Mitsubishi Electric Corporation, DAIKIN INDUSTRIES, Ltd.
January 2023:During the ISH 2023 trade fair, Daikin Europe N.V. introduced its upcoming Altherma 4 series of air-to-water heat pump systems. This new series serves as the successor to the highly acclaimed Altherma 3 series, which established a new industry benchmark for heat pumps. Concurrently with the product launch, the company rolled out a comprehensive European-wide program aimed at supporting and guiding installers. The program's objective is to deliver proper and high-quality training to ensure the smooth operation of installed units throughout their lifespan. The commercial availability of the Daikin Altherma 4 series is slated to commence in 2024.
October 2022:Midea Group commenced the construction of a new facility in Feltre, situated in northern Italy, aimed at manufacturing, researching, and developing heat pumps to support its global market expansion efforts. This new facility, representing an investment of EUR 60 million (equivalent to USD 58.75 million), is situated within the production premises of Clivet, an Italian company specializing in the design, manufacturing, and distribution of systems for residential, commercial, and industrial cooling, heating, air ventilation, and air purification markets across Europe.
| Report Attribute/Metric | Details |
| Market Size 2022 | USD 14.6 Billion |
| Market Size 2023 | USD 16.0 Billion |
| Market Size 2032 | USD 34.7 Billion |
| Compound Annual Growth Rate (CAGR) | 10.10% (2024-2032) |
| Base Year | 2023 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2019-2022 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Product, Applications, and Region |
| Region Covered | Europe |
| Countries Covered | Germany, France, UK, Italy, Spain, Sweden, Denmark, Luxembourg, Norway, Austria, Rest of Europe |
| Key Companies Profiled | Trane, Viessmann, Bosch Thermotechnology Ltd., Panasonic Corporation, STIEBEL ELTRON GmbH & Co. KG, Gree Electric Appliances, Inc., SAMSUNG, NIBE Industrier AB, Mitsubishi Electric Corporation, DAIKIN INDUSTRIES, Ltd |
| Key Market Opportunities | ·        Integration of IOT with heat pumps |
| Key Market Dynamics | ·        Positive transition toward clean energy alternatives ·        Growing demand for advanced space heating technologies |
Frequently Asked Questions (FAQ) :
The Europe Heat Pump market size was valued at USD 16.0 Billion in 2023.
The market is projected to grow at a CAGR of 10.10% during the forecast period 2024-2032.
The key players in the market are Trane, Viessmann, Bosch Thermotechnology Ltd., Panasonic Corporation, STIEBEL ELTRON GmbH & Co. KG, Gree Electric Appliances, Inc., SAMSUNG, NIBE Industrier AB, Mitsubishi Electric Corporation, DAIKIN INDUSTRIES, Ltd.
The Air Source category dominated the market in 2023.
The market share leader was the Residential category.
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Team Lead - Research Anshula mandaokar holds an academic degree in chemical engineering and has been contributing to the field for more than 5 years. she has expertise in market research and business consulting and serves as a team lead for a reputed market research firm under the chemicals and materials domain spectrum. she has worked on multiple projects, generating explicit results in a quick turnaround time. her understanding of data interpretation justifies her role as a leader.
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