Heat Pumps Market Report 2026

The heat pumps market size has grown steadily in recent years. It will grow from $126.83 billion in 2025 to $130.46 billion in 2026 at a compound annual growth rate (CAGR) of 2.9%. The growth in the historic period can be attributed to government incentives for energy efficiency, rising energy costs, demand for sustainable heating, growth of residential construction, environmental regulations.

The heat pumps market size is expected to see strong growth in the next few years. It will grow to $166 billion in 2030 at a compound annual growth rate (CAGR) of 6.2%. The growth in the forecast period can be attributed to expansion of net-zero buildings, electrification of heating systems, innovation in heat pump efficiency, smart energy management adoption, urbanization growth. Major trends in the forecast period include rising adoption of energy-efficient heating systems, growing demand for low-carbon buildings, expansion of residential heat pump installations, technological advancements in refrigerants, integration with smart home systems.

Favorable initiatives aimed at reducing carbon footprints are anticipated to boost the growth of the heat pumps market in the future. A carbon footprint is defined as the total quantity of greenhouse gases, mainly carbon dioxide (CO2), along with other greenhouse gas equivalents, emitted directly or indirectly by an individual, organization, event, product, or activity over a certain timeframe. Heat pumps are energy-efficient and generate lower carbon emissions compared to traditional heating and cooling systems. Furthermore, government incentives, green building standards, and increased consumer awareness contribute to the rising adoption of heat pumps as a sustainable option. As individuals, organizations, and governments work to combat climate change and diminish carbon emissions, heat pumps present an appealing solution for reducing environmental impact while also yielding cost savings and ensuring regulatory compliance. For example, in December 2023, the UK government, through its Department for Energy Security and Net Zero, announced its goal to reduce direct emissions from public sector buildings by 50% by 2032 and by 75% by 2037. Thus, favorable measures to cut carbon footprints are propelling the growth of the heat pumps market.

Major companies in the heat pumps market are developing renewable solutions, such as hybrid heating systems, to strengthen their market position. Hybrid heating systems combine two or more heating technologies to maximize energy efficiency and reduce environmental impact. For instance, in January 2023, Alpha Heating Innovation, a UK-based electrical and electronics manufacturer, launched the E-Tec Hybrid, a hybrid heating system designed to help homeowners transition to renewable heating while maintaining the reliability of a gas boiler. The system integrates the Alpha E-Tec 33 boiler with an external heat pump unit (Alpha E-Tec EHP) and Smartech controls to deliver efficient heating and hot water. It intelligently selects the most cost-effective energy source based on current energy tariffs and outdoor temperatures, provides instantaneous hot water, eliminates the need to upgrade existing heating systems, and can be installed in a single day.

In January 2023, Johnson Controls International PLC, an Ireland-based industrial machinery manufacturing company, acquired Hybrid Energy AS for an undisclosed sum. This strategic acquisition strengthened Johnson Controls' industrial heat pump portfolio, enabling the provision of high-temperature heat pumps with energy-efficient and sustainable solutions. The focus is on serving the rapidly growing district heating and industrial markets, especially in Europe, while aligning with decarbonization and sustainability objectives. Hybrid Energy AS, the acquired company, is based in Norway and specializes in energy management solutions, with a particular emphasis on high-temperature solutions, including heat pumps for district heating and industrial processes.

Major companies operating in the heat pumps market are Robert Bosch GmbH, Hitachi Ltd., LG Electronics Inc., Panasonic Corporation, Midea Group Corporation, Mitsubishi Electric Corporation, Fujitsu General Limited, Daikin Industries Ltd., Johnson Controls International PLC, Carrier Corporation, Trane Inc., Danfoss A/S, Ingersoll Rand Inc., Viessmann Werke GmbH & Co. KG, Lennox International Inc., Vaillant Group, NIBE Industrier AB, Glen Dimplex Group, BDR Thermea Group S.p.A., Stiebel Eltron GmbH & Co. KG, Wolf GmbH, Enertech Global Corp., Bryant Heating & Cooling LLC, Airwell Group Limited, Samsung Electronics Co. Ltd.

Asia-Pacific was the largest region in the heat pumps market in 2025. North America was the second largest region in the global heat pumps market share. The regions covered in the heat pumps market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the heat pumps market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The heat pumps market consists of sales of closed loop, open loop and direct expansion ground-source heat pump. 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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