Thermally Driven Heat Pump Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Thermally Driven Heat Pump Market is projected to expand from USD 61.28 Billion in 2025 to USD 94.78 Billion by 2031, reflecting a compound annual growth rate of 7.54%. These specialized heating and cooling systems operate by leveraging thermal energy inputs - such as natural gas, industrial waste heat, or solar thermal energy - to power sorption or engine-based cycles, rather than depending primarily on electricity. The sector's growth is underpinned by specific drivers, most notably the urgent need to decarbonize industrial activities through the recovery of low-grade waste heat and the necessity to mitigate stress on electrical grids during peak demand times by diversifying energy sources.

Despite these benefits, the market encounters considerable obstacles stemming from elevated initial capital expenditures and a lack of consistent policy backing relative to conventional fossil fuel boilers or fully electric alternatives. This difficult economic climate has negatively affected the wider heat pump industry, subsequently influencing investment levels in thermally driven innovations. Data from the European Heat Pump Association indicates that in 2024, heat pump sales across 13 key European nations fell by roughly 23%, highlighting the market contraction risks and volatility that are currently impeding rapid expansion.

Market Drivers

The increasing adoption of industrial waste heat recovery acts as a primary catalyst for the thermally driven heat pump market, specifically within heavy processing and manufacturing sectors. Unlike their electric counterparts, these systems harness surplus thermal energy from industrial operations to drive absorption or adsorption cycles, converting low-grade heat into valuable high-temperature outputs without adding load to the electrical grid. This capability is becoming increasingly critical for the expansion of district heating networks, which require reliable, low-carbon energy sources to decouple from volatile electricity markets. Such transitions are being actively supported by state funding; for instance, the UK Department for Energy Security and Net Zero announced in a January 2024 press release regarding the 'Green Heat Network Fund Round 7' that £80.6 million was awarded to sustainable heating projects, prioritizing those utilizing waste heat sources for urban networks.

Furthermore, government financial incentives for sustainable heating technologies serve as a crucial mechanism to counterbalance the high upfront capital costs associated with advanced sorption technologies. By providing substantial subsidies and grants, policymakers aim to de-risk the implementation of non-electric thermal management systems in energy-intensive industries, effectively narrowing the gap between traditional boilers and cleaner alternatives. Highlighting this support, the U.S. Department of Energy announced in March 2024 under the 'Industrial Demonstrations Program' that $6 billion had been allocated to decarbonize energy-intensive industries, creating an environment conducive to alternative heating investments. These incentives are vital for addressing the sector's environmental footprint, as the International Energy Agency reported in 2024 that the industrial sector accounted for approximately 25% of global energy-related CO2 emissions, underscoring the urgent need for efficient thermally driven technologies.

Market Challenges

Substantial barriers to the widespread adoption of thermally driven heat pumps persist due to high initial capital expenditures and inconsistent policy frameworks. These systems typically require a larger upfront financial commitment for equipment and installation compared to standard electric units or conventional gas boilers. Consequently, the return on investment for end-users is heavily contingent upon reliable government incentives and stable differentials in energy prices. When regulatory landscapes fluctuate or subsidies are retracted, commercial and industrial operators frequently delay modernization projects, preferring instead to utilize cheaper, established fossil fuel options to minimize financial risk.

This prevailing economic uncertainty directly dampens market confidence, causing manufacturers to hesitate in scaling up production, which in turn keeps unit costs elevated. The impact of such volatility is evident in major markets where policy shifts have disrupted deployment. For example, the German Heat Pump Association reported that in the first half of 2024, heat pump sales declined by 54 percent compared to the same period in the previous year. This sharp contraction underscores the broader market's sensitivity to economic instability, creating an environment that impedes the niche growth of thermally driven technologies.

Market Trends

The deployment of gas heat pumps in retrofit applications is gaining momentum as manufacturers strive to provide high-efficiency alternatives for buildings with limited electrical infrastructure. Utilizing hydrogen blends or natural gas, these systems offer a feasible decarbonization pathway for commercial facilities where full electrification is cost-prohibitive. This trend is exemplified by strategic industry consolidations designed to accelerate product development and deployment; according to a Cooling Post article from August 2024 titled 'Panasonic and Yanmar to form gas heat pump JV,' Panasonic Holdings and Yanmar Energy Systems agreed to establish a joint venture company - owned 51 percent by Panasonic and 49 percent by Yanmar - specifically to develop and manufacture next-generation gas engine heat pumps for the commercial market.

Simultaneously, the development of hybrid thermal-electric heat pump systems is accelerating to address grid stability concerns and offer fuel flexibility during peak demand. These architectures combine an electric heat pump with a thermal combustion unit, optimizing energy use based on real-time prices and ambient temperatures. The market significance of this technology has grown sufficiently to warrant dedicated industry monitoring; according to a September 2024 update titled 'Heat Pump Association reveals heat pump sales data by type,' the Heat Pump Association began explicitly tracking integrated hybrid heat pumps as a distinct category in their factory-gate sales statistics, creating a new layer of transparency to measure the rising adoption of these dual-fuel technologies in the UK.

Key Players Profiled in the Thermally Driven Heat Pump Market

• Bosch Thermotechnik GmbH
• Danfoss Commercial Compressors S.A.
• Cooll Sustainable Energy Solutions BV
• Aisin Tecnocasa
• Ariston Group
• BDR Thermea Group
• BoostHeat SA
• Robur S.p.A.
• Tranter Solarice
• Pink Heating Limited

Report Scope

In this report, the Global Thermally Driven Heat Pump Market has been segmented into the following categories:

Thermally Driven Heat Pump Market, by Product Type:

• Vertical Closed Loop
• Horizontal Closed Loop
• Open Loop

Thermally Driven Heat Pump Market, by Application:

• Residential Buildings
• Commercial Buildings

Thermally Driven Heat Pump Market, by Technology:

• Absorption
• Adsorption

Thermally Driven Heat Pump Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Thermally Driven Heat Pump Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

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