The global heat pump market size was estimated at USD 88.7 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 9.4% from 2024 to 2030. Favorable government policies for energy-efficient solutions and lowering carbon footprint are anticipated to boost market growth over the forecast period. Many governments are providing subsidies or incentives and tax credits & rebates for the installation of heat pumps are expected to further fuel the demand for energy-efficient heat pumps, thereby, benefitting the growth of heat pump industry.

According to the U.S. Department of Energy, a 30% tax credit can be claimed for buying a property in the U.S. that has qualified heat pumps installed in connection with an existing or new dwelling unit. Italy's Conto Termico incentive scheme provides grants that cover 30-35% of costs of installing renewable heating systems in buildings. Australia also provides national grants to municipals for heat pump installation. Moreover, heat pump industry is significantly affected by the availability of raw materials, such as metals like iron & steel, adhesives, rubber, chemicals, and plastics. Thus, fluctuations in raw material prices have a direct impact on manufacturing costs, which can limit market growth to some extent.

Gather more insights about the market drivers, restrains and growth of the Global Heat Pump Market

Heat Pump Market Segments Highlights:

1. The air-source technology segment dominated the market in 2023 by accounting for a share of over 84.6%. Its ability to provide water-heating solutions along with heating and cooling of space is expected to boost demand for air source technology over forecast years. In February 2023, LG introduced an air source heat pump (ASHP) capable of heating 200-270 liters of residential water.

2. The water-source technology segment is expected to witness a CAGR of 8.7% over the forecast period. It is most suitable for those who live near water sources. The growing importance of GSHP in global market owing to its high energy efficiency is expected to drive market growth over the forecast period.

3. The heat pump segment with up to 10-20 kW capacity accounted for a market share of 21.3% in 2023. The growth is attributed to capacity type being suitable for a wide range of uses such as in hotels, swimming pools, factories, restaurants, and schools.

4. The electric operation type segment accounted for a revenue share of 86.0% in 2023. An electric heat pump utilizes electricity to transfer heat from a cool space to a warm space. These heat pumps are not only used for heating but also for cooling during the summer season.

5. Hybrid heat pumps guarantee long-term savings by reducing end-users’ monthly energy expenditure. By adopting hybrid heat pumps end-users can also benefit from a tax credit or rebate thereby driving this segment’s growth.

6. The residential application segment dominated the market in 2023 by accounting for a revenue share of over 86.0%. Rapid urbanization coupled with increasing demand for energy-efficient products is expected to drive demand for heat pumps in residential sector.

7. The industrial application segment is expected to witness a CAGR of around 8.0% over the forecast period. Increasing demand for waste heat recovery heat pumps is projected to drive demand over coming years.

8. Asia Pacific led the market and accounted for 52.6% of the global revenue share in 2023. Asia Pacific is characterized by the availability of large skilled labor at low cost. The rising trend of shifting production bases to emerging economies, mainly China and India, is expected to positively influence market growth over the forecast period.

9. North America, led by the U.S. and Canada, accounted for a significant share of the global heat pump industry in 2023. Government initiatives and rebates offered to promote the incorporation of energy-saving and environment-friendly technologies are projected to augment demand for advanced heat pumps.

10. The construction sector of the Middle East & Africa is projected to witness significant growth in coming years owing to the strong support of local governments for infrastructure development. In addition, the region is witnessing new developments in the form of sports facilities, hotels, and restaurants. This is anticipated to contribute to growth of the Middle East & Africa heat pump industry in the coming years.

Browse through Grand View Research's Advanced Interior Materials Industry Research Reports.

1. Mining Drills And Breakers Market: The global mining drills and breakers market size was estimated at USD 17,492.9 million in 2024 and is projected to grow at a CAGR of 6.6% from 2025 to 2030.

2. Aluminum Casting Market: The global aluminum casting market size was estimated at USD 100.94 billion in 2024 and is projected to grow at a CAGR of 4.9% from 2025 to 2030.

Key Companies & Market Share Insights:

The manufacturers adopt several strategies, including acquisitions geographical expansions, new joint ventures, product developments, and mergers to enhance market penetration and cater to changing technological requirements of various applications such as residential, commercial, and industrial. For instance, in January 2023, Johnson Controls acquired Hybrid Energy AS. Hybrid Energy's innovative technology will provide customers with fresh, cost-effective solutions while tackling decarbonization and sustainability efforts in Europe and beyond.

1. Carrier

2. Daikin Industries, Ltd

3. Robert Bosch GmbH

4. Lennox International

5. Johnson Controls, Inc.

6. Midea Group

7. Hitachi, Ltd.

8. Ingersoll Rand Plc.

9. Rheem Manufacturing Company

10. HAIER (GENERAL ELECTRIC)

11. Panasonic Holdings Corporation

12. Danfoss

13. Fujitsu

14. LG Electronics, Inc.

15. Samsung

Order a free sample PDF of the Heat Pump Market Intelligence Study, published by Grand View Research.