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Heat Pump Market

Heat Pump Market: Information by Type(Air source heat pumps,Water source heat pumps), End User(Industrial, Residential, Commercial), and Region — Forecast Till 2031

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Market Overview

The global heat pump market size was valued at USD 67.38 billion in 2022 and is projected to reach USD 132.45 billion by 2031, registering a CAGR of 7.8% from 2023 to 2031.

A heat pump is a device that transports heat from the source to a specific location by electric or mechanical means with the help of a compressor and refrigerant. Heat pumps are multifunctional and may be either used for heating or cooling and use a lot less electricity than other heating and cooling devices such as air conditioners and heaters. 

Heat pumps provide heating, cooling, and hot water to buildings in domestic, public and industrial sectors and can be located anywhere globally as they make use of the constant temperature of the earth, air, or water source. The majority of heat pumps operate on a vapor-compression cycle, whereas a few heat pumps use the absorption principle, with waste heat as the driving energy. Heat pumps are suitable for use in cooling, space heating, hot water, and industrial heat.

Market Snapshot

market snapshot
Base Year
: 2022
Study Period
: 2021-2031
: 7.8 %
Fastest Growing Market
: Asia Pacific
Largest Market
: North America
Market Size
: USD 132.45 billion by 2031
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Market Dynamics

Widespread Use of Heat Pumps in Over 30 Countries Across Europe Alone

More than two decades worth of R&D has been invested in heat pump technology in Europe, and today, heat pumps are available in more than 30 countries across the region. The concept of heat pumps was developed by Lord Kelvin in 1852, and the first heat pump was built in the 1940s. Commercial heat pumps have been available since the 1960s and 70s. Modern commercially available units focus on optimized design. The reliability of heat pumps drives their demand across regions and applications.

The global heat pump market was valued at over USD 43 billion in 2018, and annual installations are expected to surpass the 15-million mark by 2025. From a broader perspective, technological developments, consumer preferences, and the shift to greener technologies are driving the market growth globally.

Heat Pumps – Common Application Areas

  • Swimming pools
  • greenhouses
  • Commercial buildings
  • Hotels
  • Government buildings
  • Apartment buildings
  • Schools
  • District heating systems

Shift Towards Environment-Friendly & Energy-Efficient Technologies

Rising environmental concerns are catalyzing the shift towards sustainable development and limiting the use of conventional energy sources in a bid to conserve them for future generations. This movement has nudged people to shift towards cleaner alternatives for their personal use. These trends, coupled with the increase in purchasing power parity and improvements in the standard of living, are stimulating the growth of the heat pump market.

The Paris Agreement, which took place in 2015, stipulates that countries must review their greenhouse gas contributions and strive to limit the increase in the global average temperate this century to below two-degree Celcius above pre-industrial levels and pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. The agreement has brought together all nations under a common cause to undertake zealous efforts to combat climate change. Governments are providing incentives and tax rebates to people willing to shift to green technologies. The use of solar-powered heat pumps is a step in the right direction as these pumps are energy efficient and have low dependence on fossil fuels.

Industrialization and Subsequent Growth of End-Use Industries

Ongoing industrialization has accelerated the demand for heat pumps in heating, refrigeration, storage, and process heat and steam applications across various industries. High growth in the construction and residential sectors that require heating solutions in countries across North America and Europe and the need for cooling solutions in the Middle Eastern countries collectively contribute to the growth of the heat pump market. The latest trend of green buildings with a low carbon footprint is also imparting to the growth momentum.

Implementation of New Technologies in Heat Pumps

The integration of Internet of Things (IoT) in the latest heat pump solutions is directed towards automating these pumps and making them yet more energy-efficient as well as capable of providing ambient conditions without user interference. Such advancements are expected to drive the heat pump market in the coming years .

Segmental Analysis

Air source heat pumps, water source heat pumps, and ground source heat pumps are the different types of heat pumps pm the basis of energy source. Air source heat pumps use the atmospheric energy available outside for heating and cooling. They can be installed as compact units completely indoors or outdoors. The split systems consist of one unit inside the building and the other outside. Water source heat pumps utilize the energy stored in ground, surface, or seawater. At locations where groundwater is easily available, two drillings are made for access, one of which is used as a water source, while the other is used to reinject water into the ground. Water source heat pumps extract heat from the water and make it available for heating, cooling, and preparation of hot water. Ground source heat pumps utilize the energy stored in the ground; they extract heat from the ground with the help of a vertical or a horizontal collector.

Heat pumps find application in industrial, commercial, and residential sectors. Residential heat pumps provide each property with personalized control of heating, hot water, and cooling. In many industrial processes, heat pumps are used to recover process waste heat. They are used in distillation and evaporation processes, for water heating and combined heating and cooling and dehumidification. Among all industries, food and chemical are expected to present numerous opportunities for the heat pump market.

Regional Analysis

The U.S. to Hold the Largest Value Share in North America, Driven by R&D Investments in Renewable Technologies

North America's heat pump market is expected to witness significant growth in the coming years, with the U.S. accounting for the largest value share. In the U.S., the adoption of environment-friendly approaches in new projects has resulted in an increase in R&D investments. As per the UNESCO Institute for Statistics, in 2018, the U.S. spent around 2.7% of its GDP on R&D, creating an array of opportunities in innovations in renewable technologies.

Growth of End-Use Industries to Drive Market Growth in Asia-Pacific, With China as the Frontrunner

Asia-Pacific is witnessing significant growth in the heat pump market during the forecast period, owing to the increasing demand from construction, residential, and industrial sectors. China is the frontrunner in the production of heat pumps in the region. As an example, Northern China has a clean housing policy that mandates half of the heating in the region through clean energy and this share will be increased to 70% by 2021.

East Asia continues to create a pool of opportunities in the heat pump market, backed by rapid urbanization and industrialization. The increasing preference for green technology by consumers, keeping in mind the effects of climate change and rising global temperatures, and government awareness initiatives are pegged to remain vital demand influencers in East Asia’s heat pump market. Further, an array of energy efficiency and sustainable heating technologies hitting the residential, commercial, and industrial sectors has led to a notable rise in the adoption of heat pumps.

Close to 80% of all new household heat pump installations in 2017 were in the U.S., China, and Japan, accounting for around 35% of the global final energy demand for heating in residential buildings.

Energy Efficiency Initiatives & Widespread Application in Residential Sector to Drive Market growth in Europe

Europe has limited access to natural energy sources, and the shortage is mainly met through imports from all over the globe. The import dependency is expected to increase in the coming years. The European Commission presented a European energy security strategy identifying main focus areas for boosting energy security in Europe. Investments in domestic and emission-free renewable energy production and energy efficiency have increased the demand for heat pumps.

Europe’s market is growing quickly, with around 1 million households purchasing a heat pump in 2017, including heat pumps for sanitary hot water production (135,000 units). Norway,  Sweden, Estonia, and Finland have the highest penetration rates, with more than 25 heat pumps per 1 000 households yearly. Air-to-air heat pumping technologies dominate global sales for households and, at the same time, purchases of other types of heat pumps such as air-to-water and geothermal heat pumps have also expanded recently.

Heat Pump Market Regional Analysis
Regional Growth Insights Download Free Sample

Top Key Players of Heat Pump Market

Some of the key players in the global heat pump market are

  1. Mitsubishi Electric
  2. Enertech Group
  3. Carrier Corporation
  4. Bryant heat pumps
  5. Robert Bosch
  6. NIBE
  7. Ingersoll Rand
  8. Viessmann

Report Scope

Report Metric Details
CAGR 7.8%
Forecast Period 2023-2031
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
Segments Covered
  1. By Type
    1. Air source heat pumps
    2. Water source heat pumps
    3. Ground source heat pumps
  2. By End User
    1. Industrial
    2. Residential
    3. Commercial
Geographies Covered
  • North America
  • Europe
  • APAC
  • Middle East and Africa

Recent Developments

  • July 2022, Viessmann Werke GmbH & Company KG announced 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 be spending 200 million euros on new technology sites. In 2023, the construction is anticipated to be finished.
  • May 2022, A contract for the purchase of 50% of the shares of the Italian company Argoclima and the remaining stake within five years was signed by NIBE Industrier AB. Heat pump and air conditioning products are produced and distributed in Italy by Argoclima SpA.

Heat Pump Market Segmentation

By Type

  • Air source heat pumps
  • Water source heat pumps
  • Ground source heat pumps

By End User

  • Industrial
  • Residential
  • Commercial

By Region

North America

  • U.S.
  • Canada
  • Mexico


  • U.K.
  • Germany
  • France
  • Italy
  • Spain
  • Rest of Europe


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

Latin America

  • Brazil
  • Argentina
  • Colombia
  • Rest of Latin America


  • Saudi Arabia
  • South Africa
  • UAE
  • Rest of MEA

Frequently Asked Questions (FAQs)

What is the growth rate for the Heat Pump Market?
Heat Pump Market size will grow at approx. CAGR of 7.8% during the forecast period.
Some of the top industry players in Heat Pump Market are, Mitsubishi Electric, Enertech Group, Carrier Corporation, Bryant heat pumps, Robert Bosch, NIBE, Ingersoll Rand, Viessmann, etc.
In the Heat Pump Market, North America has established itself as the market leader with a significant market share.
The Heat Pump Market has seen the most substantial growth rate in Asia Pacific.
The global Heat Pump Market report is segmented as follows: By Type, By End User
Price Starts From
USD 995

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