Geothermal Heat Pump Market Outlook:
Geothermal Heat Pump Market size was over USD 13.39 billion in 2025 and is anticipated to cross USD 24.67 billion by 2035, growing at more than 6.3% CAGR during the forecast period i.e., between 2026-2035. In the year 2026, the industry size of geothermal heat pump is estimated at USD 14.15 billion.
The geothermal heat pump market is driven by increasing demand for efficient systems. With increasing energy costs concerns over climate change and government commands pushing for lesser carbon emissions, energy-efficient heating and cooling solutions have increased widespread attention. Governments across several regions have recognized the long-term energy-saving and environmental benefits of these systems and therefore announced tax credits, subsidies, and other incentives to encourage more adoption. By helping through decreasing the initial investment burden these incentives make geothermal systems financially viable for both commercial and residential users therefore boosting the market growth.
According to the U.S. Department of Energy and DSIRE data, the 30% federal Investment Tax Credit (ITC), when combined with available electrification rebates, can reduce household geothermal system costs by up to half—saving as much as USD 15,000 for higher-cost installations. For commercial properties such as schools and retail outlets, the ITC similarly offsets 30–50% of upfront expenses for geothermal heat pump adoption. Proper implementation of the new federal funding can help the geothermal market grow and decrease upfront costs even further.
