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Heat Pumps Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Heat Pumps Market is segmented by Type (Air Source, Water Source, Geothermal (Ground) Source), End User Vertical (Industrial, Commercial, Institutional), and Geography.

Market Snapshot

Heat Pumps Market Overview
Study Period: 2018 - 2026
Base Year: 2020
Fastest Growing Market: North America
Largest Market: Asia Pacific
CAGR: 9.5 %

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Market Overview

The Global Heat Pumps Market was valued at USD 6.04 billion in 2020, and it is expected to reach USD 9.87 billion by 2026, registering a CAGR of 9.5%, during the forecast period (2021-2026). The COVID-19 pandemic outbreak has created an economic turmoil for small, medium, and large-scale industries alike, globally. While it is realistic to expect a slow growth or even decline in sales of heat pumps sales, government policies and consumer demand are expected to drive the sales of heat pumps. End users are now increasingly concerned of disruptions and dangers threatened by climate change and carbon emissions (informally known as ‘the Blue Planet Effect’) and are making environmentally-responsible heating choices.

  • Heat pump works on the principle of mechanical-compression cycle refrigeration that can even be reversed to heat or cool the desired space of a facility. Hence, these are increasingly being used for space heating and cooling applications.
  • Heat pumps are composed of two main components, which include an outdoor unit that is quite similar to that of central air-conditioner and indoor air handler. The outdoor unit consists of a compressor that circulates refrigerant, whose function is to absorb and release heat that travels between outdoor and indoor units.
  • The increasing need to curb dependence on fossil fuels and look for an energy-efficient alternative to furnaces and air conditioners are expected to drive the demand for heat pumps over the forecast period. As heat pumps move heat rather than generate heat, they can provide equivalent space conditioning at as little as one-quarter of the operating costs of conventional heating or cooling appliances.
  • Various government initiatives, such as the Domestic RHI and the Non-Domestic RHI, by the government of the United Kingdom is a financial incentive scheme set up to encourage the installation and usage of renewable heating technologies in existing homes. Such initiatives are expected to fuel market growth over the forecast period.

Scope of the Report

Heat pumps are the devices that transfer heat energy from a source of heat to a thermal reservoir moving heat energy in the opposite direction of spontaneous heat transfer, by absorbing heat from a cold space and releasing it to a warmer space. The study is limited to products that are offered by the majority of vendors with a range of applications in various end-user verticals, such as Residential, Commercial, and Industrial sector. The scope of the geographical study is currently focused on key regions, such as North America, Europe, Asia-Pacific, along with the Rest of the World regional segment that includes Latin America, and Middle East & Africa.

Type
Air Source
Water Source
Geothermal (Ground) Source
End User Vertical
Industrial
Commercial
Institutional
Geography
North America
United States
Canada
Europe
Spain
France
Italy
Germany
Netherlands
Rest of Europe
Asia Pacific
China
Japan
India
South Korea
Australia
Rest of Asia Pacific
Latin America
Middle East and Africa

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Key Market Trends

Air Source Heat Pumps are Expected to Hold a Major Market Share

  • The air source heat pump (ASHP) takes the electricity input, extracts the heat from ambient air, and gives hot water up to 90 degrees Celsius. Due to the extraction of heat from the ambient air, the ambient gets cooler. Thus, the requirement for both hot water and cold air drives the growth of air-source heat pumps.
  • There are two main types of ASHP, which are air-to-water and air-to-air. An air-to-air heat pump absorbs heat from the outside air and then transfers it directly into houses via a fan system to heat a room. Simultaneously, air-to-water heat pumps absorb heat from the outside air and then transfer it via the central heating system to provide hot water heating, radiator, or underfloor heating in an indoor space (or all three). Thus, choosing the type of ASHP determines the type of heat distribution system one needs.
  • These pumps have been rapidly becoming more widespread in recent years and now dominate the global sales for buildings. For instance, according to the International Energy Agency (IEA), the annual shipments of air-to-air heat pumps in the United States expanded from 2.3 million units in 2015, to 3.1 million in 2019.
  • Moreover, several factors, such as policy development, upgraded construction standards that make heat pumps in new buildings more competitive, and growing air-conditioning demand, are raising the popularity of air-to-air technologies, thus, boosting the market growth.
  • The market for ASHP is likely to grow over the forecast period due to its key advantages, such as versatility and affordability, as these pumps can work for either cooling or heating purposes and can be used for water heating or space heating. Moreover, air-source heat pumps are considered a renewable alternative to heat houses in the United Kingdom.
Heat Pumps-1.png

United States is Expected to Dominate Market Share

  • The deployment of heat pumps has grown steadily in the North American region, specifically in the United States, due to various reasons, such as climatic conditions, the convenience to offer the equipment, government tax credit benefits, and regulations.
  • Furthermore, the heat pumps have been regulated by the governments in the region for their energy efficiency. For instance, the Department of Energy (DOE) announced Fan Energy Rating (FER) that sets a minimum airflow efficiency standard for residential furnace fans. As of 3rd July 2019, vendors can no longer manufacture furnaces unless they meet the minimum efficiencies.
  • With the new FER standards, the US DOE predicts that the new standard for furnace fans might save about 3.99 quads of energy, reduce carbon pollution by 34 million metric tons, and save the American citizens more than USD 9 billion electric bills through 2030. According to new state law, the city of Maine seeks installers to help meet the goal of 100,000 heat pumps over the next five years. Furthermore, the New Ambler heat pump project aims to reduce diesel costs in the villages drastically.
  • In addition, the deployment of CO2heat pumps is expected to increase in the region, owing to the government initiatives toward decarbonized future. For instance, the energy group division for Mayekawa USA MYCOM has been promoting the Japanese company’s CO2 and ammonia-based heat pumps for space heating and domestic water heating in North America.
Heat Pumps Map.png

Competitive Landscape

The competitive rivalry in the heat pump market is high owing to the presence of some major players such as Mitsubishi Electric, Daikin, Panasonic amongst others. Their ability to continually innovate their offerings has enabled them to gain a competitive advantage over other players in the market. Through research & development activities, mergers & acquisitions these players have been able to expand their market footprint.

  • January 2021 - Fluidra, a pool and wellness equipment provider, acquired Built Right, a Florida-based manufacturer of heat pumps. Built Right specializes in manufacturing and servicing high-performance heat pumps.

Recent Developments

  • February 2021 - Viessmann Werke GmbH & Co KGand GETEC are repositioning collaboration for sustainability. The companies intend to further strengthen their already excellent cooperation in the energy services market for heating, cooling and solutions in the context of sector coupling. This applies to the areas of integrated neighborhood solutions, combined heat and power, photovoltaics, fuel cells and heat pumps.
  • August 2020 - Nibe Group acquired 60% of the shares in the Swedish company VEÅ AB, with an option to acquire the remaining shares within a four-year period. VEÅ develops and manufactures steam boilers and super-heated water boilers, pressure vessels and complete systems for industrial use. The company has annual sales of approximately SEK 80 million and an operating margin of well over 10% and was consolidated into the NIBE Climate Solutions business area as of July 2020. The acquisition value is still provisional.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

      1. 4.2.1 Increasing Demand for Energy Efficient Solutions

      2. 4.2.2 Increasing Government Initiatives to Curb Carbon Emission

    3. 4.3 Market Restraints

      1. 4.3.1 High Installation Cost of Heat Pumps

    4. 4.4 Industry Supply Chain Analysis

    5. 4.5 Industry Attractiveness - Porter's Five Force Analysis

      1. 4.5.1 Threat of New Entrants

      2. 4.5.2 Bargaining Power of Buyers/Consumers

      3. 4.5.3 Bargaining Power of Suppliers

      4. 4.5.4 Threat of Substitute Products

      5. 4.5.5 Intensity of Competitive Rivalry

    6. 4.6 Impact of COVID-19 on the Market

  5. 5. MARKET SEGMENTATION

    1. 5.1 Type

      1. 5.1.1 Air Source

      2. 5.1.2 Water Source

      3. 5.1.3 Geothermal (Ground) Source

    2. 5.2 End User Vertical

      1. 5.2.1 Industrial

      2. 5.2.2 Commercial

      3. 5.2.3 Institutional

    3. 5.3 Geography

      1. 5.3.1 North America

        1. 5.3.1.1 United States

        2. 5.3.1.2 Canada

      2. 5.3.2 Europe

        1. 5.3.2.1 Spain

        2. 5.3.2.2 France

        3. 5.3.2.3 Italy

        4. 5.3.2.4 Germany

        5. 5.3.2.5 Netherlands

        6. 5.3.2.6 Rest of Europe

      3. 5.3.3 Asia Pacific

        1. 5.3.3.1 China

        2. 5.3.3.2 Japan

        3. 5.3.3.3 India

        4. 5.3.3.4 South Korea

        5. 5.3.3.5 Australia

        6. 5.3.3.6 Rest of Asia Pacific

      4. 5.3.4 Latin America

      5. 5.3.5 Middle East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles*

      1. 6.1.1 Trane Inc. (Ingersoll Rand Inc.)

      2. 6.1.2 Midea Group

      3. 6.1.3 NIBE Group

      4. 6.1.4 Panasonic Corporation

      5. 6.1.5 Mitsubishi Electric Corporation

      6. 6.1.6 Daikin Industries, Ltd.

      7. 6.1.7 Stiebel Eltron Gmbh & Co. Kg (De)

      8. 6.1.8 Glen Dimplex Group

      9. 6.1.9 Viessmann Werke GmbH & Co KG

      10. 6.1.10 Flamingo Heat Pumps

      11. 6.1.11 WOLF (Centrotec Sustainable AG)

      12. 6.1.12 Efficiency Maine

  7. 7. INVESTMENT ANALYSIS

  8. 8. FUTURE OF THE MARKET

**Subject to Availability

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Frequently Asked Questions

The Heat Pumps Market market is studied from 2018 - 2026.

The Heat Pumps Market is growing at a CAGR of 9.5% over the next 5 years.

North America is growing at the highest CAGR over 2021- 2026.

Asia Pacific holds highest share in 2020.

Panasonic Corporation, Mitsubishi Electric Corporation, Daikin Industries, Ltd., Viessmann Werke GmbH & Co KG, Flamingo Heat Pumps are the major companies operating in Heat Pumps Market.

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