🌍 Due to increasing demand for energy efficient heating solutions, the global heat pump industry is expected to reach $201.5 billion by 2032
— Allied Market Research
WILMINGTON, DE, UNITED STATES, October 24, 2025 /EINPresswire.com/ —
According to a new report from Allied Market Research, the global heat pump market size was valued at $71.2 billion in 2022 and is expected to reach $201.5 billion by 2032, growing at an annual rate of 11.1% from 2023 to 2032. Growth is driven by increasing demand for energy-efficient heating and cooling systems, strong government subsidies and increasing adoption in residential, commercial and industrial applications.
The heat pump industry is experiencing rapid growth due to increasing demand for energy-efficient and sustainable heating and cooling systems. As governments around the world implement carbon-neutral policies, heat pumps are emerging as a key technology for reducing greenhouse gas emissions and improving energy performance in residential, commercial and industrial buildings.
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The use of air, geothermal and hybrid heat pumps is increasing rapidly, supported by technological advances that improve performance even in extreme climates. These systems use renewable heat from the air, ground or water, providing a clean and cost-effective alternative to traditional boilers and HVAC systems.
Europe is currently leading the global market due to strict energy efficiency policies, while Asia Pacific is expected to see the fastest growth, driven by increasing awareness, economic development and climate initiatives in countries such as China and Japan.
Key findings
By Technology: Water-based heat pumps will grow at 11.6% CAGR.
By capacity: The segment up to 10 kW accounted for a third of sales in 2022.
By end consumption: The residential sector contributed over half of the market share in 2022.
By region: Asia Pacific will grow at a CAGR of 11.4%, leading global growth.
What is a heat pump?
A heat pump is a versatile system that uses a cooling cycle to transfer heat from one location to another. It absorbs heat from a low temperature source such as air, water or the ground and releases it at a higher temperature for heating purposes. In summer the cycle is reversed so that heat pumps can also provide cooling.
This dual function makes heat pumps a sustainable alternative to traditional HVAC systems, especially in temperate climates where temperature fluctuations are manageable. Heat pump water heaters also use the same technology and reduce energy consumption by up to 50% compared to traditional electric water heaters, resulting in significant cost savings and a lower carbon footprint.
Market dynamics drive growth
Increase in HVAC demand 🏢
With increasing industrialization, the demand for HVAC systems in factories, production facilities and offices has increased significantly. Heat pumps provide both process cooling and climate control, helping industries maintain productivity while ensuring worker safety.
Government policies and net zero targets 🌍
According to the International Energy Agency (IEA), heat pumps currently meet 10% of global building heating needs. To meet the Net Zero Emissions (NZE) 2050 scenario, the global inventory of heat pumps must triple by 2030 and cover at least 20% of global heat demand. Governments around the world are actively encouraging adoption through subsidies and efficiency regulations.
Technological innovations ⚙️
In November 2023, Mitsubishi Electric Corporation introduced a breakthrough in heat exchanger technology with its aluminum vertical flat tube (VFT) design. This innovation increases efficiency by 40% compared to traditional designs while reducing refrigerant requirements by up to 20%.
Challenges: Space limitations 🏠
Despite the advantages, heat pump systems require a lot of installation space. In densely populated urban areas and older residential buildings, limited space may hinder adoption, particularly when retrofitting is required.
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Insights into segmentation
By Technology: The market is segmented into air-to-air, air-to-water, water-based and others. The water-based segment is the fastest growing segment and is expected to grow at 11.6% per year due to its efficiency in stable temperature environments.
By capacity: The up to 10 kW segment held the largest share of sales in 2022, accounting for a third of the market, driven by residential demand.
By end-use industry: The residential segment dominated in 2022, accounting for more than 50% of total sales, driven by consumer demand for energy-efficient heating and cooling systems.
By Region: Asia Pacific leads the global heat pump market and is expected to grow at a CAGR of 11.4%. Rapid adoption in Australia, New Zealand, Singapore and Malaysia is supported by building regulations, sustainability guidelines and increasing awareness of energy efficiency.
Regional highlights 🌍
Asia Pacific: Emerging as the fastest growing region due to strong government incentives and increasing urbanization. Tropical climates offer opportunities for air conditioning-oriented heat pump systems.
Australia and New Zealand: Implementation of energy efficiency standards and increasing efforts to curb emissions are driving widespread adoption.
Europe and North America: These markets focus on retrofitting older buildings and integrating advanced heat pump technologies into smart home systems.
Competitive landscape
The key players dominating the heat pump market include:
DAIKIN INDUSTRIES, Ltd.
Mitsubishi Electric Corporation
carrier
Panasonic Corporation
Trane Technologies plc
Lennox International Inc.
Bosch Thermotechnology Corp.
NIBE Group
Fujitsu General
Samsung
These companies invest heavily in research and development, product innovation and sustainable designs to strengthen their market presence. Collaborations, technology partnerships and regional expansion remain common strategies.
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Diploma
The heat pump market is poised for robust growth, expected to exceed $201.5 billion by 2032. With increasing energy efficiency standards, government subsidies and breakthrough innovations in heat exchanger technology, heat pumps are quickly becoming the cornerstone of sustainable heating and cooling systems worldwide. As industries, households and governments continue to prioritize low-carbon energy solutions, heat pumps will play a critical role in achieving global net zero targets.
Energy and Power Industry Trend Reports:
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https://www.alliedmarketresearch.com/industrial-heat-pump-market-A47269
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https://www.alliedmarketresearch.com/heat-pump-market
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https://www.alliedmarketresearch.com/geothermal-heat-pump-market-A10486
Residential heat pump market
https://www.alliedmarketresearch.com/residential-heat-pump-market-A15982
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https://www.alliedmarketresearch.com/heat-exchanger-market
Underfloor heating market
https://www.alliedmarketresearch.com/underfloor-heating-market-A06488
Sealed plate heat exchanger market
https://www.alliedmarketresearch.com/gasketed-plate-heat-exchanger-market-A31025
Indian Heat Exchanger Market
https://www.alliedmarketresearch.com/india-heat-exchangers-market
Electric water heater market
https://www.alliedmarketresearch.com/electric-water-heater-market-A13788
Solar water heater market
https://www.alliedmarketresearch.com/solar-water-heater-market-A07957
Gas water heater market
https://www.alliedmarketresearch.com/gas-water-heater-market-A16958
Instantaneous water heater market
https://www.alliedmarketresearch.com/global-tankless-water-heater-market-A16572
Commercial Heat Pump Water Heater Market
https://www.alliedmarketresearch.com/commercial-heat-pump-water-heater-market-A14520
Hot water tank market
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About Us
Allied Market Research (AMR) is a full-service market research and business consulting division of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides unmatched quality of “Market Research Reports” and “Business Intelligence Solutions” to global enterprises, medium and small businesses. AMR takes a focused view of providing business insights and advice to help its clients make strategic business decisions and achieve sustainable growth in their respective market areas.
Pawan Kumar, the CEO of Allied Market Research, leads the organization in providing high-quality data and insights. We maintain professional business relationships with various companies and this helps us in identifying market data that helps us create accurate research data tables and confirms the highest accuracy of our market forecasts. All data presented in the reports we publish are extracted through initial interviews with top officials from leading companies in the relevant field. Our secondary data sourcing methodology includes extensive online and offline research and discussions with knowledgeable industry professionals and analysts.
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Allied Market Research
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