Heat Pump Market Analysis Report By Technology, By Application, By Region And Segment Forecasts From 2019 To 2025

Industry Insights

The global heat pump market size was accounted for USD 58.6 billion, in 2018. It is projected to grow at a CAGR of 8.5% over the forecasted period, 2019 to 2025. Increasing demand for renewable energy sources coupled with supportive government funding through incentives, subsidies are mainly driving the market growth.

The growing housing and construction sector for multi-unit and single-unit dwellings is boosting the demand for heat pumps during the forecasted period. In addition, rising commercial establishments, restaurants are projected to spur the need for heat pumps.

Changing energy prices and growing carbon emission is boosting the utility of renewable heat source, which in turn is proliferating the market growth. For example, the U.S. government provides incentives for heat pumps installations. Furthermore, the growing need for energy-efficient equipment is expected to bolster the market growth. Increasing energy consumption across the industrial and residential sector is projected to spur the demand for energy-saving products that enhances operational efficiency.

Rising water & space heating requirements and the growing need for energy-efficient solutions are expected to foster the product demand. Supportive government initiatives are projected to support the growth of the market. The air source heat pumps segment is anticipated to hold the largest share in the market.

Technology Insights

Depending on the technology, the heat pumps market is fragmented into the ground source, water source, and air source. In 2018, the air source type segment held the highest share of over 80.8% in the overall market. It is projected to register a CAGR of 8.6% over the forecast period. This heat pump absorbs outside heat and transfers it into indoor space using a heating radiator.

There are mainly two categories of air source heat pump (ASHP) namely air to water, and air-to-air system. The fans equipped with heat pumps are used to transfer ambient energy inside the home. In the air to the water system, ambient energy is used for heating water and providing heat to inside space.

A ground source heat pump is projected to grow at a significant rate from 2019 to 2025, due to its benefits such as stable temperature levels for subsoil heat sources. The segment is estimated to register at a CAGR of over 8.1% during the forecast period.

The water source technology segment is projected to grow at a CAGR of over 7.5% during the forecasted period. This type of system extracts & dissipates heat by the use of water. This system is useful near rivers and lakesides.

Application Insights

The application segment is comprised of residential, commercial, and industrial. The residential segment holds the largest market share of over 81.3% in terms of global revenue. These heat pumps are widely used for cooling, generating sanitary hot-water, and space heating in the residential sector. Additionally, supportive government policies & tax benefits are projected to boost the market growth, over the forecast period.

In 2018, demand from the industrial segment accounted for USD 5.4 billion.  The growing need for waste heating recovery pumps is driving the market growth. These pumps are utilized for applications like dehumidification, water heating, cooling, and distillation. These heat pumps are also used across petroleum, chemical, and food industries. The commercial segment is anticipated to expand at a CAGR of over 7.1% during the forecasted period.

Regional Insights

In 2018, Asia Pacific led the heat pumps market with the highest market share of over 41% in the overall market. It is projected to grow at a CAGR of 9.4% over the forecast period. Heat pumps are used in pharmaceuticals, chemicals, textiles, and steel industries for providing heat energy as an input. Growing demand for the construction sector across the developing region is projected to augment the market growth. Additionally, rising manufacturing facilities in countries like India, and China is supporting market growth.

North America is projected to register a CAGR of 7.0% from 2019 to 2025. An increasing number of repair and renovation activities in the construction sector across the U.S. is boosting market growth. In addition, advancement in technology is boosting the need for innovative heating solutions.

Europe is estimated to grow at a substantial rate, over the forecast period. Rising demand for energy-efficient equipment and supportive government regulations are driving the market growth.

Impact of COVID-19

COVID-19 outbreak has caused disruption in the supply chain of heat pump systems production. Manufacturers are facing challenges owing to lockdown restrictions and interruption in manufacturing processing. During the pandemic, manufacturers are taking this downtime to enhance their installation capabilities and new product development.

The market is projected to foresee significant growth over the next few years. Various factors such as increasing awareness regarding carbon emission footprints, and supportive government policies are boosting the market growth. In the U.K., over 28,000 heat pumps have been installed in 2019, this number is expected to increase at a rate of 15-30% every year.

Heat Pump Market Share Insights

Key players in the market include Daikin Industries, Ltd., United Technologies Corporation, NIBE Group, Ingersoll-Rand, The Viessmann Group, Robert Bosch GmbH, The Danfoss Group, StiebelEltron, Mitsubishi Electric Corporation, and Vaillant Group.

The companies in the market focus on strategic acquisitions, spending in R&D activities to remain competitive in the industry. For example, in 2018, StiebelEltron has signed a contract for acquiring DanfossVermepumpar AB.

Report Scope

Segments Covered in the Report 

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2014 to 2025. For the purpose of this study, Million Insights has segmented the global heat pump market report on the basis of technology, application, and region:

• Technology Outlook (Revenue, USD Billion, 2014 - 2025)
    • Air Source
    • Water Source
    • Ground Source

• Application Outlook (Revenue, USD Billion, 2014 - 2025)
    • Residential
    • Industrial
    • Commercial

• Regional Outlook (Revenue, USD Billion, 2014 - 2025)
    • North America
        • U.S.
        • Canada
    • Europe
        • Germany
        • France
        • Italy
        • Sweden
        • Norway
    • The Asia Pacific
        • China
        • Japan
        • Australia
    • Central & South America
        • Brazil
        • Argentina
    • Middle East & Africa (MEA)
        • UAE
        • Saudi Arabia