Oman 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 63.80 Million |
| Market Size (2030) | USD 85.10 Million |
| Growth Rate (2025 - 2030) | 5.90% 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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Oman Heat Pump Market Analysis by Mordor Intelligence
The Oman heat pump market stood at USD 63.80 million in 2025 and is forecast to expand at a 5.90% CAGR, reaching USD 85.10 million by 2030. Growth is powered by Vision 2040 decarbonization targets, higher peak-period electricity tariffs introduced in 2025, and a 40% capital-expenditure rebate for industrial electrification projects. Developers are accelerating ground-source systems in luxury hospitality, while petrochemical producers retrofit process heat with large CO₂ units to curb natural gas use. Transcritical refrigerant technology is gaining momentum as Kigali Amendment compliance deadlines approach, and certified-installer networks remain critical for grid-connected systems. E-commerce is emerging as a disruptive sales route for plug-and-play water heaters under 10 kW.
Key Report Takeaways
- By type, air-source units held 79% of the Oman heat pump market share in 2024, while ground-source systems are projected to surge at a 5.8% CAGR by 2030.
- By rated capacity, the < 10 kW class led with 49% revenue in 2024; systems 10 – 20 kW are poised for 5.8% CAGR growth through 2030.
- By application, space cooling accounted for 55% of the Oman heat pump market size in 2024; domestic/sanitary hot-water systems are advancing at a 6.0% CAGR to 2030.
- By end-user vertical, residential projects commanded 71% of revenue in 2024, yet industrial installations are set to expand at a 5.0% CAGR to 2030.
- By installation type, new build held 65% of the Oman heat pump market share in 2024, while retrofit/replacement is projected to surge at a 6.3% CAGR by 2030.
- By sales channel, distributor–installer networks held a 70% share in 2024, whereas e-commerce is tracking a 6.9% CAGR to 2030.
Oman Heat Pump Market Trends and Insights
Drivers Impact Analysis
| Driver | ( ~ ) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Industrial decarbonization under Vision 2040 | +2.1% | Duqm and Sohar Industrial Zones | Long term (≥ 4 years) |
| Hospitality construction boom | +1.8% | Muscat, Jebel Akhdar, Salalah | Medium term (2–4 years) |
| Integration with smart building and IoT | +1.2% | Urban centers | Medium term (2–4 years) |
| Rising electricity tariffs | +0.8% | National | Short term (≤ 2 years) |
| Subsidy-backed Switch-out of LPG Water-Heaters in Residential Segment | +0.6% | National | Short term (≤ 2 years) |
| District-Cooling Roll-outs in SEZAD Using Seawater-Source Heat Pumps | +0.4% | Duqm Special Economic Zone | Medium term (2-4 years) |
| Source: Mordor Intelligence | |||
Industrial Decarbonization Under Vision 2040
Capital-expenditure rebates covering 40% of qualifying project costs and a policy that permits self-generation of renewable electricity are accelerating heat-pump retrofits at petrochemical, food-processing, and wastewater-treatment plants. Petroleum Development Oman’s Nimr facility, for example, cut natural gas use by 15% by up-cycling low-grade heat through a 250 kW unit, achieving payback within three years. Low-temperature process loops below 160 °C are now routinely electrified, reducing Scope 1 emissions while adding resilience against future carbon pricing. Engineering firms are pairing heat pumps with heat-recovery steam generators to push overall system efficiencies above 70%. The industrial pull is cementing long-term volume visibility for the Oman heat pump market.
Hospitality Construction Boom
Roughly 8,000 new hotel keys under development translate into a steady pipeline of centralized domestic-hot-water and four-pipe comfort-cooling projects. At a luxury resort in Jebel Akhdar, a bore-hole-coupled ground-source array is delivering COPs above 4.5 and trimming energy spending by 40% relative to conventional chillers.[1]AECOM, “Middle East Property & Construction Handbook 2024,” publications.aecom.com Developers highlight high-efficiency HVAC as a differentiator in global booking platforms and sustainability rating systems, making heat pumps a design default for five-star properties. Integrated thermal-storage tanks allow operators to shift electrical load away from high-priced tariff windows, further reinforcing the business case.
Integration with Smart Building and IoT
Open-protocol controllers now connect heat-pump inverters to building-management platforms that forecast load profiles, schedule maintenance, and participate in grid demand-response. A Muscat office complex that layered machine-learning optimization onto eight air-to-water units cut cooling energy by 23% and extended compressor life by 18%.[2]IES, “Case Study Spotlight: Decarbonising Existing Buildings,” iesve.com Suppliers are bundling sensors and cloud analytics as standard, enabling service contracts that guarantee performance. These digital capabilities are setting a new baseline expectation in the Oman heat pump market.
Rising Electricity Tariffs
The January 2025 tariff reshuffle lifted peak-hour kWh prices, improving heat-pump payback across residential and commercial segments. A mid-scale Muscat hotel that switched from electric resistance heaters to a 120 kW heat-pump water-heater bank slashed monthly bills by 32% and reached capital breakeven in 28 months. Some owners are coupling rooftop PV with daytime hot-water charging to all but eliminate grid imports. The price signal is simultaneously enlarging the replacement market for aging split-AC units rated below COP 2.5.
Restraints Impact Analysis
| Restraint | ( ~ ) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| High initial cost for households and SMEs | –0.5% | Tier-2 cities | Medium term (2–4 years) |
| Skilled-labour shortage | –0.4% | National | Short term (≤ 2 years) |
| 5% Import Tariff and High Logistics Costs for Bulky Units | –0.3% | National | Medium term (2-4 years) |
| Cheap Subsidised Natural-Gas Reduces Relative Savings | –0.2% | Industrial Zones | Long term (≥ 4 years) |
| Source: Mordor Intelligence | |||
High Initial Cost for Households and SMEs
Air-source packages still cost 2.5-3 times more than legacy split ACs, stretching residential payback beyond five years. Retrofit villas must often upgrade electrical panels and rework ducting, inflating capex, and dampening conversion rates. Financing tailored to energy savings remains rare, though bundling with rooftop PV is helping some households cross the affordability threshold.
Skilled-Labour Shortage
Advanced systems charged with CO₂ or R-290 demand specialist handling that many HVAC technicians lack. Mis-commissioned units can lose 20% efficiency and incur warranty claims, prompting OEMs to open Muscat-based training centers and fast-track certification courses in partnership with vocational institutes.[3]International Labour Organization, “Arab States Employment and Social Outlook – Trends 2024,” ilo.org Until the talent pool scales, installation bottlenecks and higher labour premiums will temper growth.
Segment Analysis
By Type: Ground-Source Efficiency Gains
Ground-source heat pumps are growing at 5.8% CAGR, winning high-end hospitality and corporate campus projects that value peak-summer efficiency. Air-source still held 79% of Oman heat pump market share in 2024 thanks to lower first-cost and rapid installation. Water-source variants serve coastal schemes that tap seawater as a stable heat sink, while hybrid designs mix air and ground loops to optimize capital versus operating expense.
Lifetime economics are tipping in favor of bore-hole systems as drilling costs fall and duty cycles rise under hotter summer peaks. A Muscat mixed-use tower achieved a 28% drop in cooling energy after adding variable-speed air-source units with electronic expansion valves, proving incremental gains remain available in the dominant sub-segment. The Oman heat pump market continues to value plug-and-play air units for villas, yet premium commercial clients increasingly specify geothermal arrays with automated performance monitoring.
Note: Segment shares of all individual segments available upon report purchase
By Rated Capacity: Large Systems Propel Decarbonization
Systems between 10 – 20 kW are projected to expand 5.8% annually, propelled by Duqm’s district-cooling seawater-heat-pump plant and petrochemical waste-heat upgrades. The < 10 kW class, aligned with mid-rise office blocks and schools, captured 49% Oman heat pump market size in 2024.
Industrial players increasingly specify 250 kW-plus skid-mounted chillers that deliver simultaneous heating and cooling, recovering low-grade exhaust to preheat process water. Meanwhile, villa owners gravitate to 5-8 kW water-heater modules offered online with DIY-oriented installation kits, a trend that will deepen e-commerce penetration in the Oman heat pump market.
By Application: Domestic Hot Water Accelerates
Space cooling dominated at 55% in 2024, yet domestic hot-water units are scaling fastest at 6.0% CAGR on the back of solar-assisted rebates. Unified systems that shunt condenser-side reject heat into storage tanks now meet both cooling and hot-water loads, lifting site-wide COPs above 6.0. Mountain resorts and heritage sites employ reversible circuits for limited space-heating needs, whereas process water heating is surfacing as a niche industrial application with compelling ROI.
A Muscat residential compound that swapped electric boilers for a 60 kW solar-linked heat-pump bank trimmed hot-water energy 68% and recouped capital in 30 months. Such case studies reinforce the economics underpinning the Oman heat pump market’s shift beyond pure cooling.
Note: Segment shares of all individual segments available upon report purchase
By End-User Vertical: Industrial Momentum
Residential buyers still accounted for 71% of 2024 shipments, driven by Muscat and Sohar housing projects, but industrial installations are climbing at a 5.0% CAGR toward 2030. Food processors, pharmaceutical plants, and petrochemical complexes are electrifying pasteurization, washing, and low-pressure steam circuits to hit corporate net-zero milestones. Commercial real estate remains the second-largest slice, where office landlords leverage heat pumps to attain green-building ratings and hedge tariff risk.
Integrated offerings that service space conditioning, hot water, and sometimes pool heating from one compressor platform resonate with villa owners, while industrial purchasers prioritize heat-recovery chiller modules able to upgrade waste-heat streams previously dumped into the atmosphere. This divergence in value drivers is shaping product roadmap decisions across the Oman heat pump industry.
By Installation Type: Retrofit Gains Traction
New-build projects took 65% of 2024 revenue under Muscat’s Green Code mandate, but retrofit activity is accelerating at 6.3% CAGR as tariff hikes widen the operating-cost gap with obsolete equipment. Government offices are pairing envelope improvements with variable-speed air-to-water swaps, reporting 37% energy savings. A planned LPG-heater replacement rebate for 2025-2027 will widen the funnel of small-business and household retrofits.
Owners of 15-year-old split-AC networks face mounting refrigerant-phase-out costs and falling efficiencies, making replacement unavoidable. OEMs are responding with compact monobloc units designed to slot into existing plant rooms, trimming downtime and access-related costs—a key trigger for faster adoption inside the Oman heat pump market.
By Sales Channel: Digital Disruption
Installer-led distribution dominated at 70% in 2024, yet online marketplaces are forecast to outpace the total Oman heat pump market at 6.9% CAGR. Platforms list sub-10 kW packages complete with sizing calculators, video tutorials, and optional remote-commissioning support. Early adopters report 65% energy savings after self-installing Wi-Fi-enabled water-heater units purchased through Lulu and Amazon.
Distributors are countering by bundling extended warranties and performance guarantees, while OEMs court large industrial customers directly with turnkey engineering services. Hybrid models that begin with online lead capture and flow into certified-installer fulfilment are likely to dominate medium-term channel architecture.
Geography Analysis
Muscat and Sohar generated roughly 65% of the 2024 turnover, benefitting from dense housing, higher tariffs, and the largest pool of certified technicians. Integrated PV-heat-pump schemes in these cities have demonstrated >50% annual energy reduction across villa clusters.
Central Oman, led by Duqm, is emerging for two reasons: industrial electrification and district cooling seawater projects. A manufacturing plant there trimmed energy use 28% by coupling process cooling and hot-water generation in one seawater-sourced system. Mountain resorts in Jebel Akhdar favour geothermal loops for simultaneous heating and cooling, capitalizing on stable underground temperatures.
Salalah and Dhofar form an evolving southern market challenged by monsoon humidity. Hotels are adopting enhanced dehumidification air-source pumps that cut electricity by 25% during Khareef while improving indoor comfort. Grid upgrades linked to the Dhofar Wind Power Project improve power quality, encouraging deeper electrification of HVAC.
Competitive Landscape
The market is moderately fragmented, with global incumbents such as Daikin, Mitsubishi Electric, and LG Electronics leveraging R&D scale, inverter technology, and extensive after-sales networks. Regional specialists, including A. O. Smith MEA and Ariston, tailor water-heating lines to Omani climatic and plumbing norms.
Technology leadership constitutes the prime competitive lever. Manufacturers race to launch transcritical CO₂ and R-290 models ahead of 2028 HFC caps, with Mitsubishi’s GCC-tuned CO₂ heater debuted in May 2025. Smart-connectivity suites differentiate offerings by lowering life-cycle costs through predictive maintenance. E-commerce entrants and IoT analytics firms represent disruptive forces, compressing margins but expanding total addressable demand.
Ongoing localization, training centers, joint marketing with utilities, and integration services aim to offset the skilled labor deficit. Daikin’s 2025 Muscat Academy exemplifies this strategy, coupling dealer expansion with technician certification to safeguard installation quality.
Oman Heat Pump Industry Leaders
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Daikin Industries Ltd.
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Mitsubishi Electric Corporation
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LG Electronics Inc.
-
Carrier Global Corporation
-
Trane Technologies Inc.
- *Disclaimer: Major Players sorted in no particular order
Recent Industry Developments
- April 2025: Mitsubishi Electric Corporation has introduced a new range of residential air-source heat pumps to provide efficient and sustainable heating and cooling. These heat pumps incorporate advanced technology, such as a high-efficiency compressor and a unique defrosting system, ensuring optimal performance even in extreme temperatures.
- December 2024: Daikin Industries, Ltd. has introduced air-to-water heat pumps specifically designed for single-family homes. These efficient, quiet, and compact systems are ideal for residential use, providing both heating and hot water while being compatible with existing radiators and plumbing systems.
- August 2024: LG Electronics Inc. has introduced two new residential air-to-water propane heat pumps that provide efficient and environmentally friendly solutions for heating and hot water supply. These heat pumps incorporate advanced inverter technology and a high-efficiency compressor, ensuring they achieve high COP (coefficient of performance) levels.
- June 2024: Ariston Holding N.V. celebrated World Environment Day 2024 by focusing on its sustainable initiatives in Oman, particularly its heat pump solutions. The company emphasized the need to reduce carbon emissions and encourage eco-friendly practices in the region. Ariston's heat pumps are designed to offer energy-efficient heating and cooling, supporting Oman's efforts to lower its carbon footprint and advance sustainability.
Research Methodology Framework and Report Scope
Market Definitions and Key Coverage
Our study defines the Oman heat pump market as sales revenue from newly installed air-source, water-source, and ground-source heat-pump units rated up to one megawatt that deliver space cooling, space heating, or domestic hot water across residential, commercial, industrial, and institutional premises in the Sultanate. Systems integrated inside large chillers or district-cooling plants and portable room coolers are kept outside this frame.
Equipment whose primary function is vapor-compression air-conditioning without heat-pump reversal is 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 & 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
Mordor analysts interviewed Omani HVAC contractors, distributor principals in Muscat and Sohar, property developers, and policymakers overseeing Vision 2040 energy goals. These conversations tested import-volume assumptions, validated typical installed costs, and calibrated adoption triggers across housing tiers and light-industry clusters.
Desk Research
We began with regulatory datasets from bodies such as Oman's Authority for Public Services Regulation, Nama Group's tariff filings, the Ministry of Housing and Urban Planning's building-permit bulletins, trade invoices in UN Comtrade, and population projections from the National Center for Statistics & Information. Market context was enriched through trade-association briefs from the Gulf HVAC Society, peer-reviewed articles on Gulf climate loads, and installer price lists that circulate on open manufacturer portals. To verify corporate footprints and shipment values, analysts mined D&B Hoovers and Dow Jones Factiva. The named sources illustrate the mix; several other public and subscription holdings informed cross-checks throughout the study.
Market-Sizing & Forecasting
A top-down construct starts with dwelling and commercial floor-space inventories, peak-cooling degree days, and tariff-driven technology penetration rates, which are then monetized through average selling prices backed by customs data. Select bottom-up rollups of large distributor shipments and sampled installer invoices act as guardrails that adjust totals when deviations exceed five percent. Key variables include new housing completions, retrofit share of electricity-subsidy segments, unit ASP movements, peak-period tariff premiums, and Vision 2040 rebate uptake. Five-year projections rely on exponential smoothing layered with scenario analysis that reflects electricity-price bands and construction-cycle swings.
Data Validation & Update Cycle
Outputs pass a two-stage peer review, after which anomalies against import statistics or power-sector forecasts trigger re-runs. Reports refresh every twelve months, with mid-cycle updates when subsidy reforms or building-code revisions materially shift inputs.
Why Mordor's Oman Heat Pump Baseline Commands Reliability
Published figures often diverge because publishers adopt different geographic cuts, technology mixes, or refresh cadences.
Key gap drivers include wider regional scopes, omission of tariff elasticity, or reliance on unvetted shipment proxies. Mordor pairs country-specific policy trackers with shipment audits and updates the model annually, so users receive figures anchored to current on-ground variables rather than regional averages.
Benchmark comparison
| Market Size | Anonymized source | Primary gap driver |
|---|---|---|
| USD 63.8 million (2025) | Mordor Intelligence | - |
| USD 42 million (2024) | Regional Consultancy A | Excludes water-source and ground-source units; omits retrofit segment |
| USD 669.1 million (2024) | Trade Journal B | Covers entire Middle East; treats Saudi volumes as proxy for Oman without tariff adjustment |
In sum, Mordor's disciplined country scope, variable transparency, and annual refresh cadence deliver a balanced baseline that decision-makers can retrace and replicate with confidence.
Key Questions Answered in the Report
What is the current size of the Oman heat pump market?
The Oman heat pump market stands at USD 63.80 million in 2025 and is forecast to hit USD 85.10 million by 2030 at a 5.90% CAGR.
Which heat pump type sells the most units in Oman?
Air-source models lead with 65% share thanks to lower upfront cost and simpler installation.
What type of heat pump is growing fastest?
Ground-source systems are expanding at a 7.8% CAGR as high-end hotels and commercial campuses chase superior summer efficiency.
How are new electricity tariffs influencing demand?
Peak-period tariff hikes effective January 2025 improve payback, cutting hotel electricity bills by up to 32% when switching to heat pumps.
Is there support for residential buyers?
APSR now covers 40% of the cost of solar-assisted heat-pump water-heaters, shortening payback to around 2-3 years for typical villas.
What is the biggest barrier to wider adoption?
High upfront costs and a shortage of CO₂/R-290-qualified technicians remain the primary hurdles, although OEM training centres and financing bundles are starting to ease both constraints.
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