Heat Pump Water Heater Market
Heat Pump Water Heater Market Analysis By Type (Split System, Integrated Unit), By Capacity (Up to 50 Gallons, 50-65 Gallons, 65-80 Gallons, Above 80 Gallons), By End User (Industrial, Residential, (Standalone Building / Villas, Apartments), Commercial (HoReCa, Hospitality Sector, Healthcare Facilities, Academic Institution, Laundry Services, Corporate Spaces, Others)) and By Region - Market Insights 2023 to 2033
Analysis of Heat Pump Water Heater Market Covering 30+ Countries Including Analysis of US, Canada, UK, Germany, France, Nordics, GCC countries, Japan, Korea and many more
Heat Pump Water Heater Market Growth Outlook (2023 to 2033)
Heat pump water heater Market demand is expanding and is poised to grow at a CAGR of 7.9% during the forecast period and reach a valuation of US$ 3.4 billion in 2033 from US$ 1.6 billion in 2023.
The utilization of air, water, or geothermal heat to generate hot water is one of the prominent features offered by heat pump water heaters, which in turn, will proliferate their industry outlook in the coming years.
Governments around the world have developed regulations for the operation of heat pump water heaters, which can include rules for HVAC emissions, safety, and environmental regulations. Strict governmental regulations and policies to curb emissions from HVAC equipment across the residential and commercial sectors will augment product penetration.
Heat Pump Water Heater Market Size (2022A)
US$ 1.5 Billion
Estimated Market Value (2023E)
US$ 1.6 Billion
Forecast Market Value (2033F)
US$ 3.4 Billion
Global Market Growth Rate (2023-2033)
Europe Market Share 2023
United States Projected Market Value (2033F)
US$ 834 Million
Key Companies Profiled
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Historic and Future Pathway Analysis for the Heat Pump Water Heater Market
The heat pump water heater market has witnessed steady growth globally, driven by increasing demand for energy-efficient water heating solutions. The market has expanded both in residential and commercial sectors.
According to market research and competitive intelligence provider Fact.MR- the market for heat pump water heater reflected a value CAGR worth 7.9% during the forecast period. Rising necessity for sustainable technologies from the residential sector will bolster the product requirement. The majority of governments around the globe are implementing various policies and schemes to promote the distribution of clean technologies in the residential and commercial sectors, improving the technology perception.
Factors driving the growth of the heat pump water heater market include the energy efficient technology along with the usage of non-conventional sources of energy to heat the water. In addition, supportive regulations and grants for using renewable sources of energy in different applications are also expected to play a key role in the growth of this market during the forecast period.
- Short Term (2023-2026): The demand for heat pump water heaters is expected to continue growing in the short term. Factors such as energy efficiency regulations, rising energy costs, and increasing consumer awareness of environmental sustainability are driving the adoption of heat pump water heaters.
- Medium Term (2026-2029): Continued advancements in heat pump technology are expected to improve the efficiency, performance, and functionality of heat pump water heaters. These advancements may include improvements in compressor technology, refrigerants, controls, and integration with smart home systems. Enhanced features and increased energy savings may further drive the adoption of heat pump water heaters in the medium term.
- Long Term (2029-2033): The heat pump water heater market is expected to expand globally, with increased adoption in both developed and developing economies. As market penetration increases and economies of scale are achieved, the long-term outlook for heat pump water heaters becomes more promising.
On the back of the aforementioned facts, the heat pump water heater market is expected to grow at a CAGR of 7.9% during the forecast period from 2023-2033, According to the Fact.MR, a market research and competitive intelligence provider.
Market share analysis of heat pump water heater based on the Type and region is provided in a nutshell in the above image. Under the Type segment, the Split System sub-segment is expected to dominate with a 76.3% market share in 2023.
Market Dynamics Outlook
“Adoption of Heat Pump Water Heaters in Renewable Energy Will Drive the Market Growth”
Integration of renewable energy is a key driver for the adoption of heat pump water heaters. As the focus on renewable energy sources like solar and wind power intensifies, heat pumps provide an excellent opportunity to maximize their benefits. By integrating heat pump water heaters with renewable energy systems, such as solar panels, excess energy can be utilized to heat water efficiently.
This synergy reduces reliance on fossil fuels and contributes to a more sustainable and eco-friendly approach to water heating. The compatibility of heat pump water heaters with renewable energy sources aligns with the global goal of transitioning to cleaner and greener energy solutions.
As governments and organizations prioritize renewable energy and sustainability, the demand for heat pump water heaters is expected to increase. Incentives, rebates, and regulations promoting the adoption of energy-efficient technologies further drive market growth. The expanding market for heat pump water heaters also encourages innovation and technological advancements, leading to improved performance and cost-effectiveness.
Hence Integration of heat pump water heater with renewable energy will provide an excellent opportunity to maximize their benefits.
“High Installation Costs Emerging as the Major Pain Point in Adoption”
Heat pump water heater systems are used to increase the energy-efficiency, reduce energy costs, and lower the carbon emissions in residential, commercial, and industrial sectors.
Heat pump water heaters are of two types: aerothermal heat pumps (air source heat pumps) and geothermal heat pumps (ground source heat pumps). Air source heat pump water heaters are more common, as they are less expensive and efficient enough to service most homes and small commercial buildings. Geothermal heat pump water heaters are typically costlier to install because of underground installation.
High-density polyethylene pipes are required to be put in the ground, which takes a team of specialists at least three days to install the pipes and the entire system, although they are more efficient and can service bigger buildings.
The installation cost of heat pump water heater equipment for residential, commercial, and industrial applications depends on various factors. For instance, in the residential application, the installation cost of all heat pump systems depends on the size of homes, additional ductwork, type of equipment, and British Thermal Unit (BTU) value of the equipment.
The cost of installation of a heat pump water heater also depends on the complexity, type, brand, and size of the heat pump. Thus, the high installation cost is a major factor that is expected to impede the growth of the heat pump water heater market during the forecast period.
Hence the initial purchase and installation expenses of heat pump water heaters can outweigh the long-term energy savings in some cases, deterring cost-conscious consumers.
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What are the Factors Driving Heat Pump Water Heater Demand Across the Germany?
Germany has been at the forefront of the energy transition, aiming to transition away from fossil fuels and significantly increase the share of renewable energy sources. This transition is driven by Germany's ambitious renewable energy targets, such as the target of achieving 65% renewable electricity by 2030.
According to the German Federal Ministry for Economic Affairs and Energy, renewable energy accounted for 47.7% of gross electricity consumption in 2020, indicating a strong commitment to clean energy sources.
Heat pump water heaters, which utilize renewable electricity, align with Germany's renewable energy targets and contribute to reducing greenhouse gas emissions.
Heat pump water heaters are therefore widely used in Germany. The reason is that Germany has rigorous energy efficiency rules in place to encourage the use of energy-efficient devices.
How will the U.S perform in the Global Market for Heat Pump Water Heater?
As per Fact.MR’s analysis, the U.S heat pump water heater market is expected to garner a revenue share of 85.5% in 2023. Heat pump water heaters can save homeowners between 50% and 75% on water heating costs compared to conventional electric resistance water heaters. Sales of heat pump water heater in the US can be attributed to the growing emphasis towards energy efficient heating systems in the country.
Additionally, encouraging regulatory framework to mitigate carbon emissions is one of the major factors that is expected to escalate the growth of the Heat Pump Water Heater market in the U.S in the forthcoming years.
Why Split System Type of Heat Pump Water Heater Gaining Traction?
Split system heat pump water heaters consist of two separate components: an outdoor unit and an indoor unit. The outdoor unit captures heat from the surrounding air and transfers it to the indoor unit, which heats the water. This configuration offers flexibility in installation, as the indoor unit can be placed in a convenient location within the building, while the outdoor unit can be installed outside or in a well-ventilated space. This flexibility makes split system heat pump water heaters suitable for various building types and space constraints.
Also, split system heat pump water heaters are designed for optimal performance and efficiency. By placing the outdoor unit in a location with access to ambient air, it can effectively capture heat and transfer it to the indoor unit for water heating. This separation of components allows each unit to function with optimized efficiency, resulting in better overall performance and energy savings.
Split system heat pump water heaters is estimated to account for a market share of 76.3% in 2023 and grow at a CAGR of 7.4% during the forecast period.
Why Demand for Residential Application is Growing?
Based on application, Fact.MR forecasts heat pump water heaters for residential applications are expected to be most sought after. According to the report, the segment is projected to experience a CAGR of 8.3% during the 2023-2033 period of assessment. Growing urbanization in the developing countries has supplemented the construction of new residential buildings, which has propelled the urge for energy-efficient HVAC systems.
Retrofitting of single and multi-family buildings with cleaner technologies to effectively save energy and reduce carbon emissions is set to complement demand. Continuous technological advancements in the heat pump water heater technology to create a more efficient unit will also bode well for market expansion in forthcoming years.
Residential heat pump water heaters are highly energy-efficient compared to conventional water heaters. They transfer heat from the surrounding air or ground to heat water, using significantly less electricity. This energy efficiency leads to lower energy consumption and reduced utility bills, resulting in cost savings for homeowners over the long term.
Know thy Competitors
Competitive landscape highlights only certain players
Complete list available upon request
Eminent Player’s Key Stratagems
Prominent players operating in the global Heat Pump Water Heater market are A. O. Smith Corporation, American Water Heaters, Bosch (Bosch thermotechnik), Bradford White Corporation, Daikin Industries, Ltd., Danfoss Group, Dimplex, Hitachi Ltd., Mitsubishi Electric Corporation, Nibe Energy Systems, Noritz Corporation, Panasonic Corporation, Rheem Manufacturing Company, State Water Heaters, and Stiebel Eltronand.
Either it is residential or Commercial, to attract customers, heat pump water heaters offer a wide range of options to cater to various requirements. Market players ensure that their inventory includes different types and sizes of Heat pump water heaters suitable for both residential and commercial. Also, manufacturers provide strive to offer competitive pricing to attract customers. Offering flexible price, discounts, and package deals give manufacturers a competitive edge.
For instance :
- In March 2023, A. O. Smith Corporation, a leading manufacturer of water heating and water treatment products, has again been named India’s most trusted water heater brand
- In April, 2022, A. O. Smith Launches Instant Water Heaters With Blue Diamond® Technology.
- In March, 2023, Leading U.S.-based manufacturer of water heaters and boilers got certified by Green Restaurant Association. Their certified water heaters are Water Heaters Infiniti® GS and GR and select eF Series® products.
Fact.MR has provided detailed information about the key manufacturers of Heat Pump Water Heater, service portfolio, and revenue growth, in the recently published report.
Segmentation of Heat Pump Water Heater Industry Research
By Type :
- Split System
- Integrated Unit
By Capacity :
- Up to 50 Gallons
- 50-65 Gallons
- 65-80 Gallons
- Above 80 Gallons
By End User :
- Standalone Bulding/ Villas
- Hospitality Sector
- Healthcare Facilities
- Academic Institution
- Laundry Services
- Corporate Spaces
By Region :
- North America
- Latin America
- East Asia
- South Asia & Oceania
- Middle East & Africa
- FAQs -
The Heat Pump Water Heater market is expected to grow from US$ 1.6 billion in 2023 to US$ 3.4 billion in 2033 at a rate of 7.9%.
By type, split system is estimated to hold a prominent share of the heat pump water heater market accounting for 76.3% in 2023.
Residential end user is expected to hold a significant position in the Heat Pump Water Heater market accounting for 80.4% market share in 2023.
The U.S. heat pump water heater market is expected to grow at a CAGR of 8.1% during the forecast period and reach a valuation of US$ 834 million in 2033.
The Europe heat pump water heater market is likely to grow at a CAGR of 7.2% during the forecast period to reach a valuation of US$ 1.5 billion in 2033 from a valuation of US$ 658 million in 2023.