Heat Pump Market Analysis

Global Heat Pump Market Overview

Heat Pump Market Size was valued at USD 92.97 billion in 2023. The heat pump market industry is projected to grow from USD 101.38 billion in 2024 to USD 215.36 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 8.73% during the forecast period (2024 - 2032). Increasing investments in the commercial and residential sectors and government regulations for increasing energy efficiency are the key market drivers enhancing market growth.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Heat Pump Market Trends

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  Increasing Installation of Heat Pump to Condense Carbon Footprint to boost the market growth

  
  

Fossil fuel energy production results in massive GHG emissions, which, together with ozone depletion, cause climate change. Major nations globally are working to transition quickly from non-renewable sources toward renewable ones to reduce harmful emissions. 

For instance, the Indian government announced new plans in November 2021 to combat global warming and attain net-zero emissions by 2070. The National Climate Agreement, which is an extension of the Climate Act and was adopted by the Dutch government, also asks for a 49% decrease in greenhouse gas emissions from 1990 levels by 2030 and a 95% reduction by 2050.

Major players in the business are concentrating on creating cutting-edge heating technology that is anticipated to become more and more popular. Manufacturers are creating cutting-edge two-stage compressors that operate at lower speeds, use less energy, and have cheaper costs, as well as contractor-friendly designs and improved efficiency. 

For instance, in July 2020, Daikin Industries, Ltd. announced the introduction of its Daikin SmartSource, Dedicated Outdoor Air System (DOAS). A 49% better efficiency than a conventional heat pump, it is a next-generation technology that enables efficient and affordable cooling and heating in all conditions.

Due to the rising demand for heat pump for heating and cooling applications in commercial and residential buildings, the market is anticipated to grow considerably in the coming years. The two key characteristics that drive their demand worldwide are their affordability and energy efficiency. heat pump market expansion is anticipated to be significantly impacted by the growing government programs, such as incentives, rebates, and tax credits, to promote sustainability and clean and green heating and cooling solutions. 

In addition, it is projected that increased corporate and governmental efforts to reduce carbon emissions and promote renewable energy sources would push the market worldwide during the forecast period, enhancing the heat pump market CAGR globally in recent years.

Due to the integration of technology with cutting-edge technologies like artificial intelligence and the internet of things, market participants are also projected to experience rapid growth shortly. Additionally, the development of dual-source technology is anticipated to increase demand. Heat can be drawn from the earth and the air using dual-source technology, another factor driving the growth of the heat pump market revenue.

Heat Pump Market Segment Insights:

Heat Pump Type Insights

The heat pump market segmentation, based on type, includes air-to-air and air-to-water. The air-to-air segment held the majority share in 2021 of the heat pump market revenue. Air-to-air technology ensures minimal carbon footprint, low maintenance, simple installation, and cost-effectiveness while providing an efficient source of hot water for spacing heating and cooling applications. Depending on which is most practical, air-to-water technology uses energy stored in the ground, the surface, or seawater. 

The heat pump uses a hydronic distribution system or fan coils/ducted ventilation systems to ensure that heat is dispersed evenly across the provided space as it takes heat from the water and makes it available for heating, cooling, and hot water applications.

Heat Pump Capacity Insights

The heat pump market segmentation, based on capacity, includes up to 10 kW, 10-20 kW, 20-30 kW, and above 30 kW. The up to 10 kW capacity segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period 2022-2030. Due to their appropriateness and high energy efficiency, the increasing use of heat pump in single-family homes positively impacts market growth.

Heat Pump End User Insights

The heat pump market data has been bifurcated by end users into industrial, commercial, and residential. The residential segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period 2022-2030. The heat pump is increasingly used to offer cooling on hot days and warmth during cooler months due to changing climatic circumstances. 

The heat pump is utilized in homes for space heating, cooling, and sanitary hot water production since they are very energy-efficient. As a result, encouraging government policies and tax breaks for installing energy-saving devices further encourage its adoption in the residential sector.

Figure 2: Heat Pump Market by End User, 2024 & 2030 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Heat Pump Regional Insights

By region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. North America Heat Pump market accounted for USD 21.51 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. 

The rise in demand in North America has been significantly affected by rising consumer demand for energy-efficient systems, government initiatives to promote emission reduction, and clean heating and cooling systems to adopt clean and sustainable technology. Additionally, the rise in family units and population growth will accelerate the expansion of the residential market.

Further, the major countries studied in the market report are: The U.S., Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: Heat Pump Market Share By Region 2021 (%)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe heat pump market accounts for the second-largest market share due to government measures to reduce carbon emissions and growing environmental concerns. It is anticipated that rising investments in the construction of greenhouse infrastructure would further accelerate industry expansion. Further, the Germany heat pump market held the largest market share, and the UK heat pump market was the fastest-growing market in the European region.

The Asia-Pacific Heat Pump Market is expected to grow at the fastest CAGR from 2024 to 2030. It is due to several factors, including the rising demand for energy-efficient heating solutions in the residential and commercial sectors and the growing awareness about climate change and greenhouse gas emissions. Moreover, China heat pump market held the largest market share, and the India heat pump market was the fastest-growing market in the Asia-Pacific region.

Heat Pump Key Market Players & Competitive Insights

Major market players are spending a lot of money on R&D to increase their product lines, which will help the heat pump market grow even more. Market participants are also taking various strategic initiatives to grow their footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the heat pump industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies manufacturers adopt in the heat pump industry to benefit clients and expand the market sector is manufacturing locally to reduce operating costs. In recent years, the heat pump industry has provided some of the most significant benefits. The heat pump market major player such as Midea (China), Ingersoll Rand (Ireland), Glen Dimplex (Ireland), Stiebel Eltron (Germany), and others, are working on expanding the market demand by investing in research and development activities.

A significant Japanese multinational conglomerate firm with its headquarters in Kadoma, Osaka, Panasonic was formerly known as Matsushita Electric Industrial Co., Ltd. from 1935 and 2008 and as the first iteration of Panasonic Corporation between 2008 and 2022. It was established in 1918 as a maker of lightbulb sockets by Knosuke Matsushita. Panasonic provides a wide range of goods and services, including rechargeable batteries, automotive and avionic systems, industrial systems, home remodeling, and construction, and was formerly the largest producer of consumer electronics in the world. In April 2022, Panasonic enhanced the output of the heat pump. 

The company's factory in Pilsen, Czech Republic, started making air-to-water heat pump three years ago. The demand for Panasonic's Aquarea air-to-water heat pump products has made production at its Czech facility a constantly expanding endeavor.

Also, a Japanese manufacturer of air conditioners with its headquarters in Osaka is Daikin Industries, Ltd. Japan, China, Australia, the United States, India, Southeast Asia, Europe, the Middle East, Latin America, and Africa are the countries where it conducts business. Daikin developed variable refrigerant flow (VRF) air conditioners. Daikin eventually remarketed the systems as "VRV" after failing to trademark "VRF" (variable refrigerant volume) successfully. 

In July 2022, Daikin, a Japanese manufacturer, and air conditioning system, will build a heat pump plant in Poland with an investment of more than one billion zloty. As gas costs rise and consumers put off installing a heat pump for extended periods, the company is taking advantage of the growing demand in Europe.

List of the Key Companies in the heat pump market include

• Midea (China)


• Ingersoll Rand (Ireland)


• Glen Dimplex (Ireland)


• Stiebel Eltron (Germany)


• Panasonic (Japan)


• Daikin (Japan)


• Danfoss (Denmark)


• Hitachi (Japan), among others

Heat Pump Industry Developments

May 2022: To meet the growing demand for air-to-water heat pump and air conditioners in Europe, Mitsubishi Electric announced the expansion of the production capacity at its Turkey plant. To raise MACT's yearly capacity for air-to-water (ATW) heat pump from its current capacity to 300,000 units, the business would invest USD 113 million.

November 2020: Viessmann Werke GmbH & Company KG declared that it was constructing a new production facility in Legnica, Poland, to hasten the ramp-up of heat pump production in Europe. Additionally, the business might spend EUR 200 million ($213 million) on new technological locations. The construction is expected to be finished in 2023.

August 2020: Nibe accounted for 60% of the market. It joined forces with VEA. Together, they created and produced whole industrial systems, pressure vessels, steam boilers, and superheated water boilers.

Carrier’s Viessmann acquisition, completed in May 2024, was centered on increasing Carrier’s heat pump range and aimed to bring Inherently: Energy Efficient Viessmann’s heat pump technologies and know-how.

In March 2024, LG launched an R32 air-to-water heat pump monobloc system with the aim and end goal to ease installation and enhance heating and hot water in residential applications across the region, more so in Canada.

In July 2023, Daikin entered a partnership with ABB aimed at the advancement of energy efficiency measures, seeking to implement inverter drives for heat pumps to further reduce carbon emissions.

September 2023. Samsung announced its joint venture with BASF to incorporate sustainable refrigerants into its heat pumps for greening impacts.

In October 2023, a groundbreaking integration of AI into heat pump systems for better energy control was established by Johnson Controls and Microsoft cooperation.

In June 2023 Thermia entered a joint collaboration partnership with Energy Save on next-generation ground source heat pumps for the European market.

In April 2024, Panasonic entered a collaboration with Tesla Energy in pairing its heat pump technologies with solutions for storing renewable energy, thus extending the applicability for solar systems. In the scope of its partnership, Panasonic said it will collaborate with Tesla Energy in producing heat pump technologies.

In November 2022, Trane Technologies Announced the incorporation of low-carbon eco steel of Nucor Corporation Econiq and US Steel verdeX at their facility for the production of high-performance heat pumps and air conditioners. This program intends to cut down production of carbon emissions and boost sustainability in the entirety of their manufacturing operations.

In July 2023, Carrier Global Corporation Added to the offer an innovative heating pump for commercial buildings including integration of renewable energy sources so as to improve efficiency and operational efficiency of the buildings.

Heat Pump Market Segmentation:

Heat Pump Systems Type Outlook

• Air to Air


• Air to Water

Heat Pump Capacity Outlook

• Up to 10 kW


• 10-20 kW


• 20-30 kW


• Above 30 kW

Heat Pump End User Outlook

• Industrial


• Commercial


• Residential

Heat Pump Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America