Residential Heat Pump Market Report 2026

The residential heat pump market size has grown rapidly in recent years. It will grow from $45.17 billion in 2025 to $49.73 billion in 2026 at a compound annual growth rate (CAGR) of 10.1%. The growth in the historic period can be attributed to rising residential heating demand, increasing awareness of energy efficiency, government incentives for heat systems, early adoption in cold regions, development of electric powered solutions.

The residential heat pump market size is expected to see rapid growth in the next few years. It will grow to $75.78 billion in 2030 at a compound annual growth rate (CAGR) of 11.1%. The growth in the forecast period can be attributed to growing focus on sustainable home heating, rising shift from conventional heating systems, increasing regulatory support for eco heating technologies, expansion of residential infrastructure, rising consumer interest in energy efficient homes. Major trends in the forecast period include increasing integration of smart energy control systems, growing application of ai in performance optimization, rising connectivity of residential heating solutions, expansion of advanced manufacturing for heat pumps, strengthening focus on digitally managed home energy systems.

The expanding interest in renewable energy sources is projected to fuel the growth of the residential heat pump market. Renewable energy, harnessed from naturally replenishing sources such as solar panels or wind turbines, offers sustainable alternatives for heating and cooling in households compared to traditional fossil fuel-based systems. For example, as of April 2023, global photovoltaic (PV) installations have surged, reaching 231 gigawatts of direct current (GWdc) and cumulatively totaling 1.2 terawatts of direct current (TWdc) in 2022, as reported by the National Renewable Energy Laboratory (NREL). China, contributing 42% of global demand, drove this growth with a 57% increase in annual PV installations, primarily through distributed PV. Projections indicate installations surpassing 300 GW by 2023 and exceeding 400 GW by 2025, emphasizing the upward trajectory of renewable energy adoption and its impact on the residential heat pump market's expansion.

Leading companies in the residential heat pump sector are dedicated to innovating their product lines, exemplified by the introduction of propane-based heat pumps, to deliver dependable customer service. Propane heat pumps function as heating and cooling systems using propane as the refrigerant, transferring heat from the outside to inside air during winter and vice versa in summer. An illustration of this innovation is the Aquarea L heat pump series launched by Panasonic Holdings Corporation in June 2023. This line of air-to-water heat pumps utilizes propane (R290) as the refrigerant for residential applications. Featuring inverter compressor technology, these pumps adjust compressor speed based on heating or cooling demand, enhancing efficiency. The incorporation of Aquarea Smart Cloud technology facilitates remote control of the heat pump via smartphones or tablets, marking a significant advancement in consumer convenience and control.

In May 2023, Carrier Global Corporation, a prominent US-based manufacturer of commercial and transport refrigeration solutions, completed the acquisition of Viessmann Climate Solutions SE for a sum of $13.2 billion. This strategic move is set to fortify Carrier's position in the realm of intelligent climate solutions and drive the advancement of energy transition initiatives. Furthermore, it facilitates Carrier's expansion into Europe's commercial sector, leveraging the expertise and market presence of Viessmann Climate Solutions SE, a reputable German company specializing in the manufacture of heat pumps for both residential and commercial buildings.

Major companies operating in the residential heat pump market report are Daikin Industries Ltd., Mitsubishi Electric Corporation, Panasonic Corporation, LG Electronics Inc., Carrier Global Corporation, Trane Technologies, Lennox International Inc., Bosch Thermotechnik GmbH, Viessmann Group, NIBE Group, Vaillant Group, Fujitsu General Ltd., Rheem Manufacturing Company, A O Smith Corporation, Stiebel Eltron Group, Ariston Group, Glen Dimplex Group, Samsung Electronics Co Ltd., Midea Group, Enertech Global LLC.

Asia Pacific was the largest region in the residential heat pump market in 2025. Asia Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the residential heat pump market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the residential heat pump market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The residential heat pump market consists of revenues earned by entities by providing services such as heat pump repair, installation, and maintenance. The market value includes the value of related goods sold by the service provider or included within the service offering. The residential heat pump market also includes sales of compressors, condensers, evaporators, refrigerants, accumulators, thermostats, motors, defrost systems, and refrigeration coils. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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