Global Heat Pumps Market 2025-2035
Description
Heat Pumps Market Size, Share & Trends Analysis Report by Type (Reversible Heat Pumps and Non-Reversible Heat Pumps), by Technology (Air-to-Air Heat Pumps, Air-to-Water Heat Pumps, Water-Source Heat Pumps, Ground-Source Heat Pumps, Hybrid Heat Pumps, and Photovoltaic-Thermal Heat Pumps), by Rated Capacity (Up to 10 kW, 10–20 kW, 20–30 kW, and Above 30 kW), by Refrigerant (R410A, R407C, R744, R290, R717, and Other Refrigerants), and by End-User (Residential, Commercial, and Industrial), Forecast Period (2025-2035)
Industry Overview
Heat pumps market, estimated at $92 billion in 2024, is projected to reach $283 billion in 2035, growing at a CAGR of 10.7% during the forecast period (2025–2035). This growth is supported by rising decarbonization policies, the electrification of heating, and the reduction of the use of fossil-fuel systems. Heat pumps, taking heat from the environment to provide space/water heating, can reduce 75% energy consumption than conventional systems. According to the International Energy Agency (IEA), heat pumps can offset 500 million tons of CO₂ emissions annually by 2030 globally.
Market Dynamics
Increasing Global Focus on Energy Efficiency and Sustainability
Increasing shift towards renewables and sustainable building technologies globally is the primary driver for the heat pump market. According to the U.S. Environmental Protection Agency, modern air-source heat pumps can reduce electricity use by 50% as compared to furnaces and baseboard heaters. Modern heat pumps are perhaps the most efficient technologies available, making heat pumps appealing for both residential and commercial uses where total heating costs can be down by 25% versus a conventional gas boiler.
Government Policies and Financial Incentives Driving Market Growth
Several government policies and financial incentives are emerging as essential driving forces that are energizing the market. These initiatives not only fuel growth but also create an environment for innovation and investment, leading to a dynamic economic landscape. For instance, the U.S. Inflation Reduction Act provides substantial tax credits, upwards of $2,000 for heat pump installations, covering around 30% of the installation costs. Additionally, in Europe, large-scale initiatives such as the REPowerEU plan, combined with country-specific initiatives such as the UK Boiler Upgrade Scheme (grants of $8,563), and subsidies in the BEG in Germany, are enabling mass deployment. Additionally, in China, the Clean Heating Plan continues to drive demand through provincial subsidies. Others strengthen laws on buildings that require the use of heat pumps. In Norway, Denmark, and the Netherlands, there are national bans on gas and oil boilers, which raises consumer expectations for heat pumps as the favored technology on an energy efficiency basis.
Market Segmentation
The tariff actions by the U.S. administration, which take effect on February 1, 2025, concerning major trading partners (Canada, Mexico, China), are having an outsized impact on the HVACR (Heating, Ventilation, Air Conditioning, and Refrigeration) industry supply chain. Trump signed an executive order tripling a tax on Chinese imports to 20%. Trump imposed 25% tariffs on items imported from Canada and Mexico. The government has stated that it plans to impose a 25% tariff on imports of steel and aluminum and impose a charge on imports from the European Union.
According to data from the United Nations and industry group Air Conditioning, Heating, & Refrigeration Institute (AHRI), only 382,000 of the 4.1 million heating and cooling heat pumps supplied in the United States in 2024 were imported, primarily from China and Mexico. Heat pump manufacturing is often regional. However, some heat pumps that are built domestically depend on foreign components. For instance, according to the International Energy Agency, China produced 95% of the global heat pump compressors in 2023 and controlled half of the global commerce in the components. Heat pump prices in the US may also increase as a result of steel and aluminum tariffs.
Regional Outlook
The global heat pumps is further divided by region, including North America (the US and Canada), Europe (the UK, Germany, France, Italy, Spain, Russia, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, Australia and New Zealand, ASEAN Countries, and the Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).
The Asia-Pacific region is driven by rapid urbanization, robust economic growth, and strong government support for renewable energy initiatives. In 2023, China produced 40% of the total heat pumps sold globally, surpassing the combined production from the US and EU. While the increase in heat pump manufacturing capacity was modest in most regions, China's capacity grew by over 10% that year. The sales of air-sourced heat pump water heaters in China remained stable, with more than 1 million units sold. Additionally, Japan is the fourth-largest market for heat pumps, and sales in that country increased by 1% compared to 2023.
Market Players Outlook
The global heat pumps market is highly competitive with a significant number of global and regional vendors. Carrier Global Corp., DAIKIN INDUSTRIES, LTD., LG Electronics, Inc., Mitsubishi Electric Corp., and NIBE Energy Systems are some of the market leaders for heat pumps. These players are continuously expanding their product offerings to increase their market presence.
Recent Developments
Industry Overview
Heat pumps market, estimated at $92 billion in 2024, is projected to reach $283 billion in 2035, growing at a CAGR of 10.7% during the forecast period (2025–2035). This growth is supported by rising decarbonization policies, the electrification of heating, and the reduction of the use of fossil-fuel systems. Heat pumps, taking heat from the environment to provide space/water heating, can reduce 75% energy consumption than conventional systems. According to the International Energy Agency (IEA), heat pumps can offset 500 million tons of CO₂ emissions annually by 2030 globally.
Market Dynamics
Increasing Global Focus on Energy Efficiency and Sustainability
Increasing shift towards renewables and sustainable building technologies globally is the primary driver for the heat pump market. According to the U.S. Environmental Protection Agency, modern air-source heat pumps can reduce electricity use by 50% as compared to furnaces and baseboard heaters. Modern heat pumps are perhaps the most efficient technologies available, making heat pumps appealing for both residential and commercial uses where total heating costs can be down by 25% versus a conventional gas boiler.
Government Policies and Financial Incentives Driving Market Growth
Several government policies and financial incentives are emerging as essential driving forces that are energizing the market. These initiatives not only fuel growth but also create an environment for innovation and investment, leading to a dynamic economic landscape. For instance, the U.S. Inflation Reduction Act provides substantial tax credits, upwards of $2,000 for heat pump installations, covering around 30% of the installation costs. Additionally, in Europe, large-scale initiatives such as the REPowerEU plan, combined with country-specific initiatives such as the UK Boiler Upgrade Scheme (grants of $8,563), and subsidies in the BEG in Germany, are enabling mass deployment. Additionally, in China, the Clean Heating Plan continues to drive demand through provincial subsidies. Others strengthen laws on buildings that require the use of heat pumps. In Norway, Denmark, and the Netherlands, there are national bans on gas and oil boilers, which raises consumer expectations for heat pumps as the favored technology on an energy efficiency basis.
Market Segmentation
- Based on the type, the market is segmented into reversible heat pumps and non-reversible heat pumps.
- Based on technology, the market is segmented into air-to-air heat pumps, air-to-water heat pumps, water-source heat pumps, ground-source heat pumps, hybrid heat pumps, and photovoltaic-thermal heat pumps.
- Based on the rated capacity, the market is segmented into up to 10 kW, 10–20 kW, 20–30 kW, and above 30 kW.
- Based on the refrigerant, the market is segmented into R410A, R407C, R744, R290, R717, and other refrigerants.
- Based on the end-user, the market is segmented into residential, commercial, and industrial.
The tariff actions by the U.S. administration, which take effect on February 1, 2025, concerning major trading partners (Canada, Mexico, China), are having an outsized impact on the HVACR (Heating, Ventilation, Air Conditioning, and Refrigeration) industry supply chain. Trump signed an executive order tripling a tax on Chinese imports to 20%. Trump imposed 25% tariffs on items imported from Canada and Mexico. The government has stated that it plans to impose a 25% tariff on imports of steel and aluminum and impose a charge on imports from the European Union.
According to data from the United Nations and industry group Air Conditioning, Heating, & Refrigeration Institute (AHRI), only 382,000 of the 4.1 million heating and cooling heat pumps supplied in the United States in 2024 were imported, primarily from China and Mexico. Heat pump manufacturing is often regional. However, some heat pumps that are built domestically depend on foreign components. For instance, according to the International Energy Agency, China produced 95% of the global heat pump compressors in 2023 and controlled half of the global commerce in the components. Heat pump prices in the US may also increase as a result of steel and aluminum tariffs.
Regional Outlook
The global heat pumps is further divided by region, including North America (the US and Canada), Europe (the UK, Germany, France, Italy, Spain, Russia, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, Australia and New Zealand, ASEAN Countries, and the Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).
- The US market is the primary global consumer for HVACR equipment, experiencing immediate inflationary pressure.
- The Canadian HVACR market, with its high reliance on U.S. exports, faces possible retaliatory tariffs and greater uncertainty for cross-border supply chain viability and market access.
- China's role as the dominant low-cost component supplier is diminishing, and the resultant market shifts could expedite repositioning and opportunities for other regional manufacturers to capture market share.
The Asia-Pacific region is driven by rapid urbanization, robust economic growth, and strong government support for renewable energy initiatives. In 2023, China produced 40% of the total heat pumps sold globally, surpassing the combined production from the US and EU. While the increase in heat pump manufacturing capacity was modest in most regions, China's capacity grew by over 10% that year. The sales of air-sourced heat pump water heaters in China remained stable, with more than 1 million units sold. Additionally, Japan is the fourth-largest market for heat pumps, and sales in that country increased by 1% compared to 2023.
Market Players Outlook
The global heat pumps market is highly competitive with a significant number of global and regional vendors. Carrier Global Corp., DAIKIN INDUSTRIES, LTD., LG Electronics, Inc., Mitsubishi Electric Corp., and NIBE Energy Systems are some of the market leaders for heat pumps. These players are continuously expanding their product offerings to increase their market presence.
Recent Developments
- In January 2025, Midea announced the launch of its Heat Pump Water Heater (HPWH), an advanced solution designed in North America. HPWH aims to reduce utility bills and help lower carbon emissions.
- In June 2024, Aira Group and Anna Uggla, Chargé d'affaires, Embassy of Sweden, Poland, officially inaugurated the new production site. Aira to invest $351 million and manufacture up to 500,000 heat pumps a year in Poland. This is a significant milestone, just one year after Aira’s official launch, marking the successful commencement of production of the company’s intelligent heat pumps and demonstrating Aira’s commitment to expanding its operations across the European market.
- In May 2024, Samsung and Lennox announced the establishment of a joint venture for Ductless Mini Split, AC, Heat Pump, and Variable Refrigerant Flow HVAC Systems in the United States and Canada. The newly established joint venture will be called Samsung Lennox HVAC North America. This joint venture represents the union of two outstanding brands with strong market positions and deep customer trust.
- Market value data analysis of 2024 and forecast to 2035.
- Annualized market revenues ($ million) for each market segment.
- Country-wise analysis of major geographical regions.
- Key companies operating in the global heat pumps market. Based on the availability of data, information related to new products and relevant news is also available in the report.
- Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
- Analysis of market-entry and market expansion strategies.
- Competitive strategies by identifying ‘who-stands-where’ in the market.
Table of Contents
220 Pages
- 1. Report Summary
- Current Industry Analysis and Growth Potential Outlook
- Global Heat Pumps Market Sales Analysis – Type | Technology | Rated Capacity | Refrigerant | End-User ($ Million)
- Heat Pumps Market Sales Performance of Top Countries
- 1.1. Research Methodology
- Primary Research Approach
- Secondary Research Approach
- 1.2. Market Snapshot
- 2. Market Overview and Insights
- 2.1. Scope of the Study
- 2.2. Analyst Insight & Current Market Trends
- 2.2.1. Key Heat Pumps Trends
- 2.2.2. Market Recommendations
- 3. Market Determinants
- 3.1. Market Drivers
- 3.1.1. Drivers For the Global Heat Pumps Market: Impact Analysis
- 3.2. Market Pain Points and Challenges
- 3.2.1. Restraints For the Global Heat Pumps Market: Impact Analysis
- 3.3. Market Opportunities
- 3.3.1. Opportunities For the Global Heat Pumps Market: Impact Analysis
- 4. Competitive Landscape
- 4.1. Competitive Dashboard – Heat Pumps Market Revenue and Share by Manufacturers
- Heat Pumps Product Comparison Analysis
- Top Market Player Ranking Matrix
- 4.2. Key Company Analysis
- 4.2.1. Carrier Global Corp.
- 4.2.1.1. Overview
- 4.2.1.2. Product Portfolio
- 4.2.1.3. Financial Analysis (Subject to Data Availability)
- 4.2.1.4. SWOT Analysis
- 4.2.1.5. Business Strategy
- 4.2.2. Daikin Industries, Ltd.
- 4.2.2.1. Overview
- 4.2.2.2. Product Portfolio
- 4.2.2.3. Financial Analysis (Subject to Data Availability)
- 4.2.2.4. SWOT Analysis
- 4.2.2.5. Business Strategy
- 4.2.3. LG Electronics, Inc.
- 4.2.3.1. Overview
- 4.2.3.2. Product Portfolio
- 4.2.3.3. Financial Analysis (Subject to Data Availability)
- 4.2.3.4. SWOT Analysis
- 4.2.3.5. Business Strategy
- 4.2.4. Mitsubishi Electric Corp.
- 4.2.4.1. Overview
- 4.2.4.2. Product Portfolio
- 4.2.4.3. Financial Analysis (Subject to Data Availability)
- 4.2.4.4. SWOT Analysis
- 4.2.4.5. Business Strategy
- 4.2.5. NIBE Group
- 4.2.5.1. Overview
- 4.2.5.2. Product Portfolio
- 4.2.5.3. Financial Analysis (Subject to Data Availability)
- 4.2.5.4. SWOT Analysis
- 4.2.5.5. Business Strategy
- 4.3. Top Winning Strategies by Market Players
- 4.3.1. Merger and Acquisition
- 4.3.2. Product Launch
- 4.3.3. Partnership And Collaboration
- 5. Global Heat Pumps Market Sales Analysis By Type ($ Million)
- 5.1. Reversible Heat Pumps
- 5.2. Non-Reversible Heat Pumps
- 6. Global Heat Pumps Market Sales Analysis By Technology ($ Million)
- 6.1. Air-To-Air Heat Pumps
- 6.2. Air-To-Water Heat Pumps
- 6.3. Water-Source Heat Pumps
- 6.4. Ground-Source (Geothermal) Heat Pumps
- 6.5. Hybrid Heat Pumps
- 6.6. Photovoltaic-Thermal (PVT) Heat Pumps
- 7. Global Heat Pumps Market Sales Analysis By Rated Capacity ($ Million)
- 7.1. Up to 10 kW
- 7.2. 10–20 kW
- 7.3. 20–30 kW
- 7.4. Above 30 kW
- 8. Global Heat Pumps Market Sales Analysis By Refrigerant ($ Million)
- 8.1. R410A
- 8.2. R407C
- 8.3. R744
- 8.4. R290
- 8.5. R717
- 8.6. Other refrigerants
- 9. Global Heat Pumps Market Sales Analysis By End-User ($ Million)
- 9.1. Residential
- 9.2. Commercial
- 9.3. Industrial
- 10. Regional Analysis
- 10.1. North American Heat Pumps Market Sales Analysis – Type | Technology | Rated Capacity | Refrigerant | End-User ($ Million)
- Macroeconomic Factors for North America
- 10.1.1. United States
- 10.1.2. Canada
- 10.2. European Heat Pumps Market Sales Analysis – Type | Technology | Rated Capacity | Refrigerant | End-User ($ Million)
- Macroeconomic Factors for Europe
- 10.2.1. UK
- 10.2.2. Germany
- 10.2.3. Italy
- 10.2.4. Spain
- 10.2.5. France
- 10.2.6. Russia
- 10.2.7. Rest of Europe
- 10.3. Asia-Pacific Heat Pumps Market Sales Analysis – Type | Technology | Rated Capacity | Refrigerant | End-User ($ Million)
- Macroeconomic Factors for Asia-Pacific
- 10.3.1. China
- 10.3.2. Japan
- 10.3.3. South Korea
- 10.3.4. India
- 10.3.5. Australia & New Zealand
- 10.3.6. ASEAN Countries (Thailand, Indonesia, Vietnam, Singapore, And others)
- 10.3.7. Rest of Asia-Pacific
- 10.4. Rest of the World Heat Pumps Market Sales Analysis – Type | Technology | Rated Capacity | Refrigerant | End-User ($ Million)
- Macroeconomic Factors for the Rest of the World
- 10.4.1. Latin America
- 10.4.2. Middle East and Africa
- 11. Company Profiles
- 11.1. Bosch Thermotechnology Corp.
- 11.1.1. Quick Facts
- 11.1.2. Company Overview
- 11.1.3. Product Portfolio
- 11.1.4. Business Strategies
- 11.2. Carrier Global Corp.
- 11.2.1. Quick Facts
- 11.2.2. Company Overview
- 11.2.3. Product Portfolio
- 11.2.4. Business Strategies
- 11.3. Daikin Industries, Ltd.
- 11.3.1. Quick Facts
- 11.3.2. Company Overview
- 11.3.3. Product Portfolio
- 11.3.4. Business Strategies
- 11.4. Denso Corp.
- 11.4.1. Quick Facts
- 11.4.2. Company Overview
- 11.4.3. Product Portfolio
- 11.4.4. Business Strategies
- 11.5. Ecotech Solutions
- 11.5.1. Quick Facts
- 11.5.2. Company Overview
- 11.5.3. Product Portfolio
- 11.5.4. Business Strategies
- 11.6. Energen Hybrid Systems Ltd.
- 11.6.1. Quick Facts
- 11.6.2. Company Overview
- 11.6.3. Product Portfolio
- 11.6.4. Business Strategies
- 11.7. Evo Energy Technologies.
- 11.7.1. Quick Facts
- 11.7.2. Company Overview
- 11.7.3. Product Portfolio
- 11.7.4. Business Strategies
- 11.8. Fujitsu General America, Inc. (Delaware Corp.)
- 11.8.1. Quick Facts
- 11.8.2. Company Overview
- 11.8.3. Product Portfolio
- 11.8.4. Business Strategies
- 11.9. GEA Group Aktiengesellschaft
- 11.9.1. Quick Facts
- 11.9.2. Company Overview
- 11.9.3. Product Portfolio
- 11.9.4. Business Strategies
- 11.10. Glen Dimplex Deutschland GmbH
- 11.10.1. Quick Facts
- 11.10.2. Company Overview
- 11.10.3. Product Portfolio
- 11.10.4. Business Strategies
- 11.11. Guangzhou SPRSUN New Energy Technology Development Co., Ltd.
- 11.11.1. Quick Facts
- 11.11.2. Company Overview
- 11.11.3. Product Portfolio
- 11.11.4. Business Strategies
- 11.12. Johnson Controls Inc.
- 11.12.1. Quick Facts
- 11.12.2. Company Overview
- 11.12.3. Product Portfolio
- 11.12.4. Business Strategies
- 11.13. Lennox International Inc.
- 11.13.1. Quick Facts
- 11.13.2. Company Overview
- 11.13.3. Product Portfolio
- 11.13.4. Business Strategies
- 11.14. LG Electronics, Inc.
- 11.14.1. Quick Facts
- 11.14.2. Company Overview
- 11.14.3. Product Portfolio
- 11.14.4. Business Strategies
- 11.15. MIDEA Group
- 11.15.1. Quick Facts
- 11.15.2. Company Overview
- 11.15.3. Product Portfolio
- 11.15.4. Business Strategies
- 11.16. Mitsubishi Electric Corp.
- 11.16.1. Quick Facts
- 11.16.2. Company Overview
- 11.16.3. Product Portfolio
- 11.16.4. Business Strategies
- 11.17. Nammaswadeshi
- 11.17.1. Quick Facts
- 11.17.2. Company Overview
- 11.17.3. Product Portfolio
- 11.17.4. Business Strategies
- 11.18. NIBE Group
- 11.18.1. Quick Facts
- 11.18.2. Company Overview
- 11.18.3. Product Portfolio
- 11.18.4. Business Strategies
- 11.19. Panasonic Corp.
- 11.19.1. Quick Facts
- 11.19.2. Company Overview
- 11.19.3. Product Portfolio
- 11.19.4. Business Strategies
- 11.20. Rheem Manufacturing Co.
- 11.20.1. Quick Facts
- 11.20.2. Company Overview
- 11.20.3. Product Portfolio
- 11.20.4. Business Strategies
- 11.21. Samsung Electronics Co., Ltd.
- 11.21.1. Quick Facts
- 11.21.2. Company Overview
- 11.21.3. Product Portfolio
- 11.21.4. Business Strategies
- 11.22. Thermax Ltd.
- 11.22.1. Quick Facts
- 11.22.2. Company Overview
- 11.22.3. Product Portfolio
- 11.22.4. Business Strategies
- 11.23. Trane Technologies Company, LLC
- 11.23.1. Quick Facts
- 11.23.2. Company Overview
- 11.23.3. Product Portfolio
- 11.23.4. Business Strategies
- 11.24. Zealux Electric Ltd.
- 11.24.1. Quick Facts
- 11.24.2. Company Overview
- 11.24.3. Product Portfolio
- 11.24.4. Business Strategies
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