Heat Pump Market
Heat Pump Market by Product (Air Source, Water Source, Ground Source Heat Pumps), by System (Air-to-Air, Air-to-Water, Electric, Geothermal Heat Pumps), Rated Capacity (Up to 10 kW, 10–20 kW, 20–30 kW, Heat Pump above 30 kW), by Application & Region – Forecast to 2031
Heat Pump Market Outlook
The global heat pump market was valued at around US$ 60 Bn in 2020, which amounts to close to 35% share of the overall HVAC (heating, ventilation, and air conditioning) market. Sales of heat pumps are projected to accelerate at a healthy CAGR of 9% to top US$ 140 Bn by 2031.
|Heat Pump Market Size in 2020||US$ 60 Bn|
|Sales Forecast for Heat Pumps by 2031||US$ 140 Bn|
|Global Market Growth Rate (2021 to 2031)||9% CAGR|
|Share of Top 5 Companies||45%|
Demand for air source heat pumps is set to increase at a CAGR of 7% across the assessment period of 2021 to 2031. Numerous benefits of electric heat pumps in different fields have paved the way for opportunities for manufacturers of electric heat pumps over the next ten years.
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Revenue Analysis of Heat Pumps (2016-2020) Vs Market Outlook (2021 to 2031)
As per Fact.MR, a market research and competitive intelligence provider, the global heat pump systems market is estimated to be valued at US$ 60 Bn in 2020.
The heat pumps industry remains influenced by continued improvements in electricity generation from renewable heating and cooling technology, and exploration on future heat pump implementations.
Adoption of eco-friendly alternatives to conventional heating appliances for arresting CO2 emissions and growing demand for Integration of IoT with heat pumps continues to fuel the sales of heat pump systems.
Increasing implementation of stringent policies to restrict the release of greenhouse gases in the environment across the globe is likely to provide new growth opportunities for heat pump equipment & component manufacturers.
Latest trends of heat pumps, growing demand for industrial heat pumps, and rising adoption of heat pump technology in residential applications are the factors driving the expansion of the market for heat pumps.
All of these factors are expected to drive the market for heat pump equipment at 9% CAGR across 2021 to 2031.
What are the Major Factors Fueling Market Growth for Heat Pumps?
Significant growth in the adoption of HVAC (heating, ventilation, and air conditioning) systems, on the back of changing climatic conditions, rapid urbanization, and demographic transformations, has also been complementing the demand for energy-efficient heat pumps.
Development of low GWP alternative refrigerants in heat pumps, energy-efficient heat pump installations, and demand for air source heat pumps are drivers of the market for heat pumps.
Once a niche technology for domestic heating and hot water supply, advanced heat pumps are now expected to play a significant role in creating a low-carbon future.
Manufacturers are leveraging latest technologies to make reliable advances in the areas of compressors, mechanical-compression cycle refrigeration systems, fan motors and coils.
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What Barriers are Mostly Faced by Heat Pump Manufacturers?
Higher initial installation costs of energy-efficient heat pumps have significantly restricted their mass adoption, particularly in price-sensitive countries. Several technical difficulties are associated with the installation of advanced heat pumps in existing infrastructures, which have added to the reluctance of end users toward heat pumps.
Lack of awareness regarding the changes in efficiency and cost of heating appliances is one of the primary reasons why consumers fail to realize the potential benefits of heat pumping technology- a notable impediment to the sales of heat pump systems.
Policies and strategies promoting the sales of heat pump systems further continue to remain different and complex, as the benefits of dual-source heat pumps vary between countries, individual sectors, and also over time.
Which Regional Market is the Most Profitable for Heat Pump Suppliers?
In terms of revenues, East Asia is projected to remain the largest market for heat pumps. Revenue in the East Asian regional market is expected to rise 1.5X by 2031.
East Asia continues to create a pool of opportunities in the market, on the back of rapid urbanization and industrialization.
Rising sales of dual-source heat pumps, growing demand for industrial heat pumps, and increasing sales of water source heat pumps are expected to fuel the market growth over the forecast period.
Increasing preference for green technology among consumers, complementing the governments’ awareness initiatives, will remain a vital growth influencer associated with the heat pump market in the East Asian region.
What is the Demand Outlook for Heat Pumps in the U.S.?
The U.S. market for heat pumps is expected to increase 1.4X by 2031.
The use of heat pumps has continuously increased in the United States, owing to a variety of factors including climatic conditions, the ease with which the equipment can be offered, government tax credit benefits, and restrictions.
The need for technologically innovative and compact heating solutions in the residential sector is expected to be driven by the rapidly recovering building industry in the United States, which will be supplemented by repair and restoration operations.
Due to residential development activities and heating solutions, as well as increased demand for air-to-air heat pumps, the U.S. holds a significant share of the market.
How Lucrative is the Market for Heat Pumps in China?
Increasing residential and commercial construction developments in China are likely to have a beneficial impact on market growth. Demand for heat pumps in China is expected to increase as a result of favorable government policies aimed at lowering energy usage.
Growing demand for heat pumps in residential, commercial, and industrial sectors and the prominent presence of top heat pump manufacturing companies are driving the market growth in China.
Some of the trends of heat pumps observed in Japan include heat pumps being used not just for space heating and cooling, but also for refrigerators in the majority of houses in the residential sector. Hence opportunities for manufacturers of heat pumps in Japan are increasing.
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Why are Air Source Heat Pumps in Such High Demand?
By product type, air source heat pumps will remain preferred in the market. Sales of air source heat pumps are expected to increase by 2.2X over the forecast period.
The air source heat pump (ASHP) uses electricity to absorb heat from the surrounding air and provide hot water up to 90 degrees Celsius. The ambient becomes cooler as heat is extracted from the ambient air. As a result, the demand for both hot water and chilly air fuels the expansion of air source heat pumps.
In comparison with water source and ground source heat pumps, the air source variants will continue to account for higher market shares.
Suitable for a broad range of applications and characterized by low capital and installation costs, air source heat pumps have been witnessing strong growth in demand. However, sensing the operational limitations of air source heat pumps in colder regions, manufacturers are concentrating on including the ‘dual-source’ offerings in their portfolios.
Further, new heat pumps developed with variable or dual speed features to maximize efficiency and electrical savings are likely to provide an added advantage to manufacturers, thereby offering them a competitive edge.
Why is There Increasing Requirement of Heat Pumps from the Residential Sector?
One of the rising industries that are expected to drive the demand for heat pumps is the residential sector. Residential sector contributes substantially, to the growth of the global heat pump industry.
Adoption of heat pumps to provide heating solutions in cooler seasons and cooling solutions on hot days is fueled by climate change. Heat pumps are energy-efficient devices that are used in homes for space heating, cooling, and sanitary hot water generating.
Increasing government spending on infrastructural activities along with incentives to adopt renewable systems, especially in developing regions, remain the key aspects for market consolidation in the residential sector.
COVID-19 Impact on Industry
The unprecedented outbreak of the COVID-19 pandemic has had a significant influence on the global economy over the previous two years. The market has been negatively affected by the decline in construction activity in practically all countries as a result of the COVID-19 outbreak.
In addition, the world saw interruptions in global energy supply systems that were influenced by the epidemic but not directly tied to it. Deployment of heat pump systems was similarly impacted by such disruptions.
Simultaneously, the market has demonstrated capable of dealing with such short-term disturbances as long-term concerns, such as energy efficiency and environmental friendliness, remain unaltered.
Sales of air source heat pumps have increased as development activity has increased in several countries in recent months, releasing pent-up demand for residential units.
Moreover, technological advancements have boosted the ability of most heat pump manufacturers to produce products that comply with government standards and suit the needs of consumers.
Heat pump market has not only witnessed the provision of ecologically and economically feasible products, but also premium products with advanced features for critical commercial and industrial applications.
Companies are heavily spending in research and development operations as well as innovation centers to acquire a competitive advantage in the market.
Top manufacturers of heat pumps are adapting to contemporary trends and developing high-end products to tap latent opportunities. The production of premium or advanced heat pumps tend to be limited, but represent a high market value. As a result, the heat pump market shows a high level of consolidation for high-end products.
Heat Pump Industry Report Scope
|Historical Data Available for||2016-2020|
|Market Analysis||Value in US$ Mn, Volume in Units|
|Key Regions Covered||
|Key Countries Covered||
|Key Market Segments Covered||
|Key Companies Profiled||
|Pricing||Available upon Request|
Key Segments Covered in Heat Pump Industry Research
- Air Source Heat Pumps
- Water Source Heat Pumps
- Ground Source Heat Pumps
- Air-to-Air Heat Pumps
- Air-to-Water Heat Pumps
- Electric Heat Pumps
- Geothermal Heat Pumps
- Heat Pump Up to 10 kW
- 10–20 kW Heat Pump
- 20–30 kW Heat Pump
- Heat Pump Above 30 kW
- Use of Heat Pumps in Residential sector
- Use of Heat Pumps in Commercial Sector
- Use of Heat Pumps in Hospitality Sector
- Use of Heat Pumps in Retail Sector
- Use of Heat Pumps in Education Sector
- Use of Heat Pumps in Industrial Sector
- Use of Heat Pumps in Food & Beverage Sector
- Use of Heat Pumps in Paper & Pulp Sector
- Use of Heat Pumps in Chemicals & Petrochemicals Sector
- FAQs -
The global market for heat pumps is currently worth more than US$ 60 Bn.
From 2016-2020, 4% CAGR was witnessed for the sales of heat pumps.
Positive outlook toward the use of geothermal energy, increasing demand for energy-efficient systems, and rapid urbanization and commercialization are expected to drive sales of heat pumps.
Sales of heat pumps in Canada are forecasted to top US$ 18 Bn by 2031.
Key heat pump providers are Trane Inc., Midea Group, NIBE Group, Panasonic Corporation, and Mitsubishi Electric Corporation.
With 50% share, East Asia will largely contribute to the growth of global heat pump revenue.
Heat pump sales in Germany are expected to rise at a CAGR of 5% over the forecast period of 2021 to 2031.
Air source heat pumps account for a share of 55% in the market.
The U.S., China, Japan, Germany, and Canada are expected to drive most of the demand for heat pumps.
The global market is expected to surge at a CAGR of 9% over the forecast period of 2021 to 2031.