Heat Pumps Market Opportunities and Strategies to 2033

This report describes and explains the heat pumps market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global heat pumps market reached a value of nearly $88.2 billion in 2023, having grown at a compound annual growth rate (CAGR) of 7.43% since 2018. The market is expected to grow from $88.2 billion in 2023 to $142.08 billion in 2028 at a rate of 10.01%. The market is then expected to grow at a CAGR of 10.42% from 2028 and reach $ 233.26 billion in 2033.

Growth in the historic period resulted from the increasing focus on renewable energy, rise in demand for energy-efficient solutions, increasing construction activities and rising government initiatives. Factors that negatively affected growth in the historic period include high installation costs and import restrictions and export bans.

Going forward, favorable measures to reduce carbon footprints, rapid urbanization, increase in investment in commercial construction and increasing industrialization will drive the market. Factors that could hinder the growth of the heat pumps market in the future include shortage of skilled personnel.

The heat pumps market is segmented by product type into air source, water source and ground source. The air source market was the largest segment of the heat pumps market segmented by product type, accounting for 86.95% or $76.69 billion of the total in 2023. Going forward, the ground source segment is expected to be the fastest growing segment in the heat pumps market segmented by product type, at a CAGR of 11.48% during 2023-2028.

The heat pumps market is segmented by rated capacity into up to 10 KW (kilowatt), 10-20 KW, 20-30 KW and above 30 KW. The up to 10 KW market was the largest segment of the heat pumps market segmented by rated capacity, accounting for 58.63% or $51.71 billion of the total in 2023. Going forward, the up to 10 KW segment is expected to be the fastest growing segment in the heat pumps market segmented by rated capacity, at a CAGR of 10.39% during 2023-2028.

The heat pumps market is segmented by end user into residential, commercial and industrial. The residential market was the largest segment of the heat pumps market segmented by end user, accounting for 70.51% or $62.18 billion of the total in 2023. Going forward, the industrial segment is expected to be the fastest growing segment in the heat pumps market segmented by end user, at a CAGR of 11.13% during 2023-2028.

Asia-Pacific was the largest region in the heat pumps market, accounting for 52.28% or $46.1 billion of the total in 2023. It was followed by North America, Western Europe and then the other regions. Going forward, the fastest-growing regions in the heat pumps market will be Western Europe and North America, where growth will be at CAGRs of 12.28% and 11.98% respectively. These will be followed by Africa and the Middle East, where the markets are expected to grow at CAGRs of 11.63% and 10.63% respectively.

The global heat pumps market is fairly concentrated, with large players operating in the market. The top ten competitors in the market made up to 26.93% of the total market in 2023. Johnson Controls International plc was the largest competitor with a 5.47% share of the market, followed by Carrier Corporation with 4.81%, Daikin Industries Ltd. with 3.89%, Hitachi Ltd. with 2.54%, Systemair AB with 2.42%, Trane Technologies plc with 2.10%, LG Electronics Inc. with 1.79%, Panasonic Corporation with 1.48%, Mitsubishi Electric Corporation with 1.31% and Samsung Electronics Co. Ltd. with 1.12%.

The top opportunities in the heat pumps market segmented by product type will arise in the air source segment, which will gain $46.79 billion of global annual sales by 2028. The top opportunities in the heat pumps market segmented by rated capacity will arise in the up to 10 KW segment, which will gain $33.07 billion of global annual sales by 2028. The top opportunities in the heat pumps market segmented by end user will arise in the residential segment, which will gain $37.94 billion of global annual sales by 2028. The heat pumps market size will gain the most in the USA at $11.95 billion.

Market-trend-based strategies for the heat pumps include focus on developing innovative plug-and-play CO2 heat pumps for commercial use, revolutionizing residential heating with advanced digital heat pumps which contribute to the reduction of carbon emissions and promote sustainable energy use, developing advanced commercial air-to-water heat pumps, high-efficiency compact heat pumps with superior performance, developing innovative solutions such as hybrid heating systems to gain a competitive edge in the market and focus on developing new heat pump series for commercial upgrades where companies intend to replace or enhance existing heating and cooling systems in commercial buildings.

Player-adopted strategies in the heat pumps market include focus on strengthening operational capabilities through the launch of new product offerings, enhancing product offerings for commercial and industrial customers through new product launches and strengthening market position through new product developments.

To take advantage of the opportunities, the analyst recommends the heat pumps companies to focus on developing innovative and versatile products, focus on digital innovation and sustainability, focus on expanding product range with advanced heat pump technologies, focus on high-efficiency compact heat pumps, focus on developing hybrid heating systems, focus on enhanced user experience and seamless integration, focus on commercial upgrades, focus on ground source segment for growth, expand in emerging markets, continue to focus on developed markets, provide competitively priced offerings, participate in trade shows and events, continue to use B2B promotions and focus on targeting industrial end-users.