Denmark Heat Pump Market Size and Share
Market Overview
| Study Period | 2019 - 2030 |
|---|---|
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Market Size (2025) | USD 207.40 Million |
| Market Size (2030) | USD 257.90 Million |
| Growth Rate (2025 - 2030) | 4.45% CAGR |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0. |
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Denmark Heat Pump Market Analysis by Mordor Intelligence
The Denmark heat pump market is valued at USD 207.4 million in 2025 and is forecast to reach USD 257.9 million by 2030, advancing at a 4.45% CAGR between 2025 and 2030. Denmark’s policy-driven push to eliminate fossil-fuel heating has kept demand resilient despite inflationary pressure. Declining retail electricity prices, a high carbon tax on fossil boilers, and the 2030 mandate for eco-design Class A+++ units continue to widen the economic advantage of heat pumps. Rapid electrification of urban district-heating networks, together with EU Fit-for-55 grants, is stimulating the development of large-capacity systems. Meanwhile, e-commerce channels are reshaping purchasing behavior as buyers seek price transparency and faster lead times. Manufacturers are accelerating the shift to natural refrigerants to comply with the incoming F-Gas revision, adding further momentum to innovation.
Key Report Takeaways
- By type, air-source units led with 84% revenue share in 2024, while ground-source systems are projected to expand at an 6.4% CAGR to 2030.
- By rated capacity, sub-10 kW systems captured 52% of the Denmark heat pump market share in 2024; units above 100 kW are forecast to grow at 6.2% CAGR through 2030.
- By application, space heating accounted for 71% of the Denmark heat pump market size in 2024, while domestic hot-water systems are advancing at a 5.9% CAGR to 2030.
- By end-user, residential customers held 63% share in 2024; industrial users record the fastest growth, with a 6% CAGR outlook.
- By installation type, new-build installations dominated with 68% share in 2024, whereas retrofit are set to grow at 5.8% CAGR on the back of stricter building codes.
- By sales channel, installer networks commanded 74% of 2024 sales; e-commerce is projected to advance at a 6.4% CAGR through 2030.
Denmark Heat Pump Market Trends and Insights
Drivers Impact Analysis
| Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Supportive Government Regulations Including Incentives for Saving Energy through Tax Credit Programs | +1.2% | National | Medium term (2-4 years) |
| Rising Demand for Energy-Efficient Systems | +0.8% | National | Long term (≥ 4 years) |
| Mandatory 2030 Installation of Eco-Design Class A+++ Heat Pumps in New Buildings (Denmark) | +0.7% | National | Long term (≥ 4 years) |
| Growing Electrification of District Heating Networks in Copenhagen & Aarhus | +0.6% | Copenhagen, Aarhus | Medium term (2-4 years) |
| Source: Mordor Intelligence | |||
Supportive Government Regulations Including Incentives for Saving Energy through Tax Credit Programs
Generous grants covering up to 50% of installed cost, handled through Denmark’s new digital portal that processed 930 applications in minutes, lower payback periods and boost consumer confidence. Transparent eligibility checks reduce administrative friction, allowing capital to flow quickly to installers, which in turn accelerates order backlogs and plant utilization rates.
Rising Demand for Energy-Efficient Systems
Heat pumps deliver 3–4 units of heat per unit of electricity consumed, a proposition amplified by Denmark’s falling power prices and escalating carbon tax. [1]International Energy Agency, “Executive Summary – Denmark 2023,” iea.org Builders are increasingly specifying smart controls that exploit hourly tariffs, and pilot projects in Nykobing Falster show CO₂ units paired with storage outperform legacy boilers on lifetime cost. [2]Fenagy, “Large Heat Pumps and Cooling Systems Case Studies,” fenagy.dk
Mandatory 2030 Installation of Eco-Design Class A+++ Heat Pumps in New Buildings (Denmark)
The compulsory requirement for top-class efficiency in all new buildings gives OEMs a predictable demand runway. Manufacturers are competing to optimize integrated heating-cooling-hot-water packages, while the installer certification clause improves execution quality and reduces performance gaps.
Growing Electrification of District Heating Networks in Copenhagen & Aarhus
Aalborg’s 132 MW installation and Esbjerg’s 70 MW seawater project highlight economies of scale, cutting delivered heat cost and carbon intensity. Large heat pumps also provide valuable flexibility to balance Denmark’s wind-heavy grid.
Restraints Impact Analysis
| Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Stringent compliance and safety standards | -0.4% | National | Medium term (2-4 years) |
| Shortage of certified refrigeration engineers | -0.3% | National (rural focus) | Short term (≤ 2 years) |
| Source: Mordor Intelligence | |||
Stringent compliance and safety standards
The F-Gas revision compels OEMs to redesign for low-GWP refrigerants such as CO₂ and propane, raising R&D spend and re-tooling costs. Smaller installers struggle with new safety rules, stretching project timelines.
Shortage of certified refrigeration engineers
A limited talent pool inflates labor costs and elongates installation queues, especially outside major cities. Strategic responses include Daikin’s Brondby training center and accelerated micro-credential programs that shorten onboarding cycles.
Segment Analysis
By Type: Air-source Dominance Faces Geothermal Challenge
Air-source units captured 84% of the Denmark heat pump market in 2024. Cost advantage and ease of retrofit underpin leadership. Ground-source systems, however, are on track as planners value steady winter performance and long service life. Advances such as propane-charged air-to-water models narrow the efficiency gap, reducing the payback premium that once deterred buyers. [3]Danish Technological Institute, “Air to Water Heat Pump with Natural Refrigerants,” dti.dk
Developers in suburban subdivisions increasingly specify geothermal loops at the earth-works stage, spreading drilling cost across multiple homes and flattening upfront capital curves. Urban hybrid networks blend air, water, and wastewater sources to enhance redundancy, as illustrated by Fårevejle’s combined system.
Note: Segment shares of all individual segments available upon report purchase
By Rated Capacity: Small Systems Dominate While Industrial Scale Accelerates
Units below 10 kW captured 52% of share in 2024, reflecting Denmark’s detached-house stock. District-heating operators favor high-capacity ammonia or CO₂ machines that integrate with thermal storage and ancillary electric boilers.
OEMs such as Johnson Controls expanded Holme capacity to build larger skids, aligning with utility procurement cycles and securing cost leadership via scale economies. Academic work at the Technical University of Denmark reports centrifugal compressors achieving above 90% isentropic efficiency, lowering levelized heat cost in industrial duty.
By Application: Space Heating Expands While Hot Water Accelerates
Space heating captured 71% share in 2024. Domestic hot-water installations will outpace the demand, propelled by compact CO₂ water heaters capable of 85 °C supply, ideal for hygiene codes in hospitality and healthcare.
Combined space-heat and hot-water packages optimized via smart controls raise seasonal performance factors and unlock utility rebates. A 6.5 MW drinking-water-source project in Viborg demonstrates how sourcing near-ambient water cuts compressor lift and operational cost.
Note: Segment shares of all individual segments available upon report purchase
By End-User Vertical: Residential Base with Industrial Momentum
Residential segment captured 63% share in 2024. Industrial plants, however, are witnessing significant growth on the back of process-heat decarbonization grants. Arla Foods' USD 34.3 million on-site plant turns 2.8 MW of power into 8 MW of heat, cutting 14,500 t CO₂e annually.
Energy-as-a-Service contracts, exemplified by Energy Machines' school project in Hørsholm, demonstrate new financing models that overcome capital expenditure hurdles for public institutions. Industrial buyers increasingly request combined heating and cooling solutions that deliver 12-34% energy savings over separate systems.
By Installation Type: Retrofit Dominance with New-Build Acceleration
New Build segment captured 68% share in 2024. The Denmark heat pump demand for new-builds is witnessing significant growth, aided by the existing ban on fossil boilers in new structures since 2013 and reinforced by the A+++ rule.
Developers increasingly integrate low-temperature hydronic loops and high-insulation envelopes, raising system COP by up to 20% compared with retrofit contexts. Copenhagen’s Nordhavn district showcases district-cooling waste-heat recovery feeding building-scale heat pumps, demonstrating design-for-electrification principles. [4]The Climate Drive, “Re-use Excess Energy from Operations,” theclimatedrive.org
Note: Segment shares of all individual segments available upon report purchase
By Sales Channel: Installer Networks Evolve as E-Commerce Disrupts
Traditional distributor-installer captured a share of 74% in 2024. Pure-play online retailers and OEM web-stores are witnessing significant growth, driven by consumers seeking transparent pricing and do-it-yourself feasibility tools.
Installer networks respond with hybrid models that integrate digital lead funnels with on-site audits, while manufacturers embed augmented-reality aids to support remote commissioning. The shift compresses sales cycles and could squeeze distributor margins, prompting consolidation among regional installers.
Geography Analysis
Urban areas anchor growth. Copenhagen and Aarhus electrify district networks with flagship megawatt-scale projects that reduce carbon intensity and offer balancing services to a wind-dominant grid.
Jutland leverages high wind penetration, delivering low off-peak prices that lift heat-pump operating margins. Projects in Vildbjerg exploit price arbitrage via intelligent controls fenagy.dk. Zealand’s rural zones face grid-capacity constraints, slightly moderating uptake until planned reinforcements by Energinet come online. Government grant programs earmark extra funds for areas without gas or district-heat connections, accelerating oil-boiler replacements and ensuring equitable access to clean-heat solutions odyssee.
Competitive Landscape
The Denmark heat pump market is fragmented. Domestic specialists such as Dantherm Group A/S and Metro Therm compete with multinationals Danfoss, Bosch, and Viessmann. Strategic moves in 2024-2025 indicate an arms race in capacity, channels, and skills. Daikin's acquisition of BKF Klima secures nationwide distribution and creates a training hub that addresses the installer bottleneck while embedding the brand deeper in specification pipelines.
Johnson Controls' Holme expansion readies the firm for industrial-scale tenders, pursuing cost leadership and first-mover advantage in natural-refrigerant mega-skids. Copeland's launch of the Vilter VQ95 targets high-temperature industrial loads, diversifying revenue beyond traditional comfort heating. Digitalization emerges as a competitive differentiator; IoT interfaces enable remote diagnostics, lower service cost, and lock-in after-sales revenues.
Emergent white-space opportunities include turnkey energy-as-a-service models, high-temperature process units above 120 °C, and modular plug-and-play kits for e-commerce customers. Market participants that master supply-chain resilience, installer loyalty, and regulatory foresight are best positioned to outpace the 4.45% sector CAGR.
Denmark Heat Pump Industry Leaders
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Trane Inc. (Trane Technologies Plc)
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Danfoss A/S
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LG Electronics
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Daikin Industries Ltd.
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Johnson Controls International Plc
- *Disclaimer: Major Players sorted in no particular order
Recent Industry Developments
- May 2025: Innargi, a geothermal developer, has revealed a strategic shift in its geothermal heating project in Aarhus, Denmark. Instead of the initially planned seven sites, Innargi will now harness a target capacity of 110 MW from just three locations. This pivot comes on the heels of insights gained from three test wells, which the company commenced in 2023. Furthermore, with advancements in heat pump technology and the local district heating firm, Circuit A/S (Kredslob), actively working to reduce temperatures in the district heating grid, the consolidation into fewer plants has become feasible.
- March 2025: The Danish Energy Agency has unveiled a new digital platform in a bid to streamline its heat pump subsidy program. This system is designed to automate the majority of applications, reserving manual reviews solely for intricate cases. The agency revealed a robust response, with 1,383 applications submitted, amounting to a substantial DKK 26.6 million.
- December 2024: MAN Energy Solutions has inaugurated its inaugural industrial-scale heat pump in Esbjerg, Denmark, delivering its first batch of heat. The newly commissioned heat pump, managed by DIN Forsyning, a multi-utility firm, is set to provide around 280,000 MWh of climate-neutral heat each year. This output will cater to the district heating networks of both Esbjerg and the adjacent town of Varde, fulfilling the heating demands of 25,000 households and curbing CO2 emissions by an impressive 120,000 tons annually.
- December 2024: AI-based solutions are paving the way for the future of district heating, enabling utility companies to optimize and manage energy more effectively. Taking a significant step in this direction, HOFOR (Greater Copenhagen Utility) has teamed up with Danfoss, investing in the Danfoss Leanheat software. In addition to this software investment, HOFOR is also channeling funds into large heat pumps, geothermal energy, and various digital initiatives. These efforts mark HOFOR's shift towards electricity-based production and a commitment to enhancing energy efficiency in Copenhagen.
- October 2024: Johnson Controls is significantly expanding its heat pump and chiller facility in Holme, near Aarhus, Denmark. This move is in response to the surging global demand for high-capacity commercial and industrial heat pumps. The expansion will introduce an additional 2,300 square meters dedicated to production and a 1,800 square meter center for customers and testing, boasting a cutting-edge simulation environment. Furthermore, the investment encompasses modernizing current buildings with top-tier production equipment and technology.
- March 2024: Panasonic Corporation's Heating & Ventilation A/C Company (HVAC) will unveil three new models of commercial air-to-water (A2W) heat pumps. Designed for multi-dwelling units, retail stores, offices, and other light commercial properties, these pumps utilize eco-friendly natural refrigerants. By merging its advanced air conditioning technology with Systemair's environmental expertise, Panasonic has engineered A2W products boasting robust heating capacities. Production is set to kick off in April 2024 in France, ensuring a timely launch of these innovative products in September.
Research Methodology Framework and Report Scope
Market Definitions and Key Coverage
Mordor Intelligence defines the Danish heat-pump market as the annual value of newly installed, electrically driven air, water, and ground-source units up to 500 kW that deliver space heating and/or sanitary hot water in residential, commercial, and light industrial premises.
District-scale plants, replacement spare parts, absorption or gas-fired hybrids, and portable air conditioner heat-pump modes are excluded.
Segmentation Overview
- By Type
- Air-Source
- Water-Source
- Ground-Source (Geothermal)
- Others (Hybrid, Exhaust-Air)
- By Rated Capacity (kW)
- < 10 kW
- 10-20 kW
- 20-50 kW
- 50-100 kW
- > 100 kW
- By Application
- Space Heating
- Space Cooling
- Domestic / Sanitary Hot Water
- Others (Pool Heating, Process Heating, and Cooling)
- By End-User Vertical
- Residential
- Commercial
- Industrial
- Institutional
- By Installation Type
- New Build
- Retrofit / Replacement
- By Sales Channel
- Direct (OEM to End-User)
- Distributor / Installer Network
- E-Commerce
Detailed Research Methodology and Data Validation
Primary Research
We interviewed installers, wholesalers, and utilities across Zealand, Jutland, and Bornholm, followed by calls with policy officers and compressor OEM engineers. Insights on average selling prices, subsidy pass-through, and likely 2026 retrofit intentions were captured and fed back to respondents for clarification, giving us confidence to fine-tune model assumptions.
Desk Research
Our analysts began by extracting baseline installation and sales counts from tier-1 public datasets such as Statistics Denmark, the European Heat Pump Association's sales barometer, Eurostat energy price files, and Danish Energy Agency subsidy bulletins. Energy performance studies from IEA-HPT journals, patent trends logged on Questel, and company financials accessed through D&B Hoovers added technology cost and revenue signals. Additional context came from investor presentations and parliament climate agreement papers. The sources listed illustrate, rather than exhaust, the secondary corpus used for cross-checks.
Market-Sizing & Forecasting
A top-down reconstruction converts EHPA unit sales and building stock heat demand profiles into value, using region-specific average selling prices validated through channel checks. Bottom-up vendor roll-ups of major suppliers' Danish revenues act as a reasonableness filter. Key drivers include: 1) yearly subsidy uptake rate under the "Skrotningsordningen" boiler scrap scheme, 2) electricity to gas retail price ratio, 3) average seasonal COP of installer best seller models, 4) share of dwellings outside district heating networks, and 5) new build floor area permits. A multivariate regression projects each driver through 2030, and scenario analysis tests COP or tariff shocks; gaps in supplier data are bridged with sampled ASPx volume proxies.
Data Validation & Update Cycle
Outputs pass three layers of analyst review, variance checks against independent indicators, and automatic flags when quarterly subsidy disbursements diverge by +/-15%. Reports refresh annually; material policy moves trigger interim updates, ensuring clients receive the latest view.
Why Mordor's Denmark Heat Pump Baseline Commands Reliability
Published estimates differ widely because firms pick dissimilar scopes, price series, and refresh cadences.
By focusing strictly on newly installed electric units and reconciling policy-driven demand with on-ground ASP evidence, Mordor delivers a balanced, repeatable benchmark for decision makers.
Benchmark comparison
| Market Size | Anonymized source | Primary gap driver |
|---|---|---|
| USD 207.4 million (2025) | Mordor Intelligence | |
| USD 1.1 billion (2022) | Global Consultancy A | Bundles all HVAC appliances and retrofit services, inflating value and using pre-crisis price decks |
| USD 44 million (2024) | Trade Journal B | Relies solely on customs import data, omitting domestic production and installer margin layers |
These contrasts show that when scope inflation or partial data are removed, Mordor's disciplined approach yields the most transparent and dependable baseline for Denmark's heat-pump opportunity.
Key Questions Answered in the Report
What is the current value of the Denmark heat pump market?
The market stands at USD 207.4 million in 2024 and is forecast to reach USD 257.9 million by 2030.
Which heat-pump type is growing fastest in Denmark?
Ground-source systems are projected to expand at an 6.4% CAGR between 2025 and 2030, outpacing other types.
How do large-capacity heat pumps fit Denmark’s decarbonization strategy?
Utilities deploy 100 kW-plus units in district-heating networks to replace fossil boilers, benefiting from low-cost wind power and EU grants.
Why are natural refrigerants important for Danish manufacturers?
The forthcoming F-Gas revision bans high-GWP fluids, so OEMs are switching to CO₂, propane, or ammonia to future-proof products and avoid penalties.
What channels should suppliers prioritize for growth?
While installer networks remain dominant, e-commerce is rising at 6.4% CAGR, so a blended digital-plus-service model maximizes reach.
How big is the opportunity in new-build construction?
Mandatory A+++ installations in all new buildings drive a 5.8% CAGR for new-build sales through 2030, making it a high-growth segment for suppliers.
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