China Heat Pump Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

China Heat Pump Market Trends and Insights

Growing use of heat pumps beyond traditional heating and cooling applications

Industrial low-temperature process heating has become the fastest expanding frontier for the China heat pump market. Units delivering up to 165 °C now reach 300–400% efficiency, which reduces factory thermal energy bills by as much as 70%. Food processors lead the charge by deploying heat-pump dryers, pasteurizers, and sterilizers, pulling annual installation growth toward 15% and setting the stage for scale benefits that lower prices across the board. 

Implementation of government policies and initiatives to promote energy-efficient heating and cooling systems

The national “coal-to-electricity” mandate accelerated air-source heat pump penetration in Beijing where these units already supply 63.95% of converted households. Central regulations, such as the General Code for Building Energy Efficiency that took effect in April 2022, require higher efficiency baselines in every new building and have been amplified by provincial subsidies covering up to half of the installed cost. The layered approach ensures quick wins in air-quality hot spots while nurturing a dependable order pipeline for equipment makers. 

Rapid urbanization and construction of new buildings

Urban population is slated to grow by 123 million by 2030, which will create continuous demand for space-conditioning in high-rise apartments and mixed-use complexes. Residential units below 10 kW dominate, yet mid-capacity systems above 50 kW are now specified in malls and office towers that prioritize low-carbon operation. In the Yangtze River Delta alone, heating needs are projected to rise 12% by 2030, translating into roughly 20 million fresh installations and cementing the long-term growth runway. 

Difficulties in installation and high installation cost

Installation typically adds 30–40% to the invoice for an air-source heat pump and can triple the bill for ground-source units because of drilling. The payback window stretches to 8–10 years in single-family retrofits when incentives are absent, prompting manufacturers to design modular, high-temperature units that mount into existing hydronic loops without changing radiators. 

Limited public awareness

Consumer surveys show that 65% of prospective buyers cite uncertainty over life-cycle savings as a core hesitation. The gap is most visible outside major metros where traditional coal or gas heating remains entrenched. Demonstration projects, virtual reality configuration tools, and education campaigns are beginning to shrink this barrier. 

Electric grid capacity in rural areas of China

Field studies reveal that once conversion rates surpass 50% in a village, substations need reinforcement to prevent voltage dips during cold spells. Seasonal peaks push infrastructure that sits idle in warmer months, complicating investment economics for utilities. Hybrid PV-heat-pump microgrids offer a partial answer by generating on-site electricity, though widespread rollout remains in early stages. 

Segment Analysis

By Type: Air-Source Dominates While Ground-Source Accelerates

The China heat pump market size for air-source systems registered an 83% share in 2024. The widespread appeal stems from relatively low upfront expense and performance upgrades that keep units running below –25 °C. Water-source and ground-source varieties together represented 15%, yet the latter is projected to outpace the field at 9.2% CAGR through 2030. Research at Tsinghua University confirms that ground-source units can achieve seasonal performance factors 30–40% higher than comparable air-source models, a key advantage for northern installations that face lengthy freezing spells.^{11. https://www.tsinghua.edu.cn/}

Recent drilling and heat-exchanger innovations have stripped 15–20% out of installation budgets, bringing payback periods closer to the 5–7 year mark in high-use buildings. Hybrid configurations tying borehole thermal storage to photovoltaic arrays are opening grid-support revenue streams for owners, an emerging incentive that further tilts the calculus toward deeper-loop systems. 

Note: Segment shares of all individual segments available upon report purchase

By Rated Capacity: Small Systems Lead While Medium-Large Capacity Grows

<10 kW units enjoyed a 47% revenue share in 2024 thanks to mass-market uptake in apartments and townhouses. Moving up the ladder, the 10–20 kW bracket supplied about one-quarter of shipments, but the 50–100 kW class is poised for a 6% CAGR fueled by demand from supermarkets, schools, and mid-rise office blocks. More capacious machines now incorporate cascade compressors and enhanced vapor-injection loops that deliver 90 °C water with 30% less electricity than legacy models, which attracts commercial buyers facing stricter building-performance labels. 

CO₂ refrigerant platforms, once confined to niche hot-water units, are migrating into these mid-capacity envelopes. This trend answers both efficiency and environmental goals by eliminating high-GWP fluids and unlocking heat-recovery synergies between hot-water and space-conditioning loads. 

Note: Segment shares of all individual segments available upon report purchase

By Application: Hot Water Leads While Cooling Accelerates

Domestic hot-water systems produced 44% of 2024 turnover, underpinned by stable everyday demand. Space-heating units contributed 35%, although total addressable square footage rises swiftly in northern retrofits. Cooling uses claimed 15% of sales but carry the highest 7.9% CAGR projection. Integrated heating-cooling platforms based on variable-refrigerant-flow architecture cut electricity needs 15-20% versus split mechanical systems and also enable load shifting that shaves building peak demand 25% on utility high-tariff days. 

Note: Segment shares of all individual segments available upon report purchase

By End-User Vertical: Residential Dominance With Industrial Growth

Residential occupied 71% of the 2024 revenue pie. Industrial, at just 5% now, is on track for the top-line 5.1% CAGR to 2030. Textile mills, food processors, and chemical plants have proven that low-temperature process heat from upgraded heat pumps yields 60-70% energy savings and can repay capital in 2–3 years for high-utilization shifts. 

Note: Segment shares of all individual segments available upon report purchase

By Installation Type: New-Build Leads While Retrofit Accelerates

New-build integration captured 62% of 2024 business owing to design flexibility and lower labor hours. Retrofits represent 38% today but future CAGRs favor retrofits at 6.4%. High-temperature units that pair with legacy radiators, plus modular outdoor units sized for elevator shafts or balconies, sharply reduce disruption in occupied premises. 

Note: Segment shares of all individual segments available upon report purchase

By Sales Channel: Distributors Dominate While E-Commerce Surges

Traditional distributors controlled 71% of shipments by leveraging on-the-ground engineering support. Direct OEM deals supplied 20% while e-commerce added 9% and is climbing at a 7.0% CAGR. Online platforms now bundle standardized installation packages, financing, and after-sales service that together demystify the purchase for digitally savvy homeowners. 

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Northern clusters such as the Beijing–Tianjin–Hebei corridor contributed around 40% of national installs in 2024, propelled by air-quality mandates that subsidize up to 50% of equipment costs. Manufacturers have responded with extreme-cold-rated compressors and EVI cycles that preserve capacity at –25 °C ambient, a specification absent five years ago. 

The eastern coastal belt anchored by the Yangtze River Delta delivered roughly 35% of 2024 volume. Rapid urban growth, mixed-climate comfort needs, and a robust grid make the region ideal for dual heating-cooling units. PV-ready designs are proliferating because self-consumption of rooftop solar shaves operational costs and alleviates afternoon grid congestion. 

Southern provinces historically centered on water-heating and cooling loads but a rising middle class now demands winter warmth. Guangdong’s Warm Winter initiative expands public-building retrofit funding, turning schools and hospitals into high-visibility demonstration sites. The absence of district-heating infrastructure removes a major competitor, allowing heat pumps to jump directly into first-time heating localization.