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Heat Pump Market Size and Forecast, by Application (Industrial, Commercial, Residential); Technology (Water Source, Air Source, Ground Source); Operation (Heating Only, Heating & Cooling, Integrated System, Water Heater) - Growth Trends, Key Players, Regional Analysis 2026-2035

  • Report ID: 4834
  • Published Date: Sep 10, 2025
  • Report Format: PDF, PPT

Heat Pump Market Outlook:

Heat Pump Market size was valued at USD 88.89 billion in 2025 and is likely to cross USD 241.25 billion by 2035, expanding at more than 10.5% CAGR during the forecast period i.e., between 2026-2035. In the year 2026, the industry size of heat pump is assessed at USD 97.29 billion.

Heat Pump Market Size
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The growth of the market can be attributed to the growing use as well as the expanding sales of energy-efficient heating products such as heat pumps worldwide for cost-effective space heating and cooling applications in residential and commercial spaces. According to the International Energy Agency (IEA), in 2021, there were around 190 million heat pump units in operation in buildings worldwide. These factors are predicted to boost the market growth in the forecast period.

Discussing further, factors that are believed to fuel the heat pump market growth of the demand for heat pumps across the globe include the soaring prices of oil & gas as well as the depleting stock of fossil fuels along with the rising need to curb dependence on fossil fuels and look for an energy-efficient alternative to furnaces and air conditioners. As per recent data, fossil fuels such as oil, & natural gas is anticipated to last just up to 50 more years. Additionally, speeding up the replacement of gas boilers by doubling heat pump installations in the industrial sector is predicted to present the potential for market expansion over the projected period.

Key Heat Pump Market Insights Summary:

  • Regional Highlights:

    • Asia Pacific heat pump market will dominate more than 35% share by 2035, driven by rapid industrialization and rising demand for efficient heating solutions.
    • North America market will capture a 25% share by 2035, driven by increasing adoption of policies phasing out fossil fuels for heating.

  • Segment Insights:

    • The air source segment in the heat pump market is anticipated to capture a 46% share by 2035, attributed to efforts toward green energy transition and adoption of affordable technologies.
    • The industrial segment in the heat pump market is projected to achieve a 45% share by 2035, driven by the expansion of the industrial sector and growing manufacturing output.

  • Key Growth Trends:

    • Increasing Investment in Green Energy
    • Growing Efforts to Reduce Carbon Dioxide (CO2) Emission

  • Major Challenges:

    • Restrictive policies on fluorinated gases (F-gas)
    • Supply chain disruption

  • Key Players: Viessmann Climate Solutions SE, Carrier Global Corporation, Daikin Industries, Ltd., Johnson Controls, NIBE Group, Midea Group, Ingersoll Rand Plc., Vaillant Group, Robert Bosch GmbH, The Danfoss Group.

Global Heat Pump Market Forecast and Regional Outlook:

  • Market Size & Growth Projections:

    • 2025 Market Size: USD 88.89 billion
    • 2026 Market Size: USD 97.29 billion
    • Projected Market Size: USD 241.25 billion by 2035
    • Growth Forecasts: 10.5% CAGR (2026-2035)

  • Key Regional Dynamics:

    • Largest Region: Asia Pacific (35% Share by 2035)
    • Fastest Growing Region: Asia Pacific
    • Dominating Countries: China, Japan, Germany, United States, United Kingdom
    • Emerging Countries: China, Japan, South Korea, India, Singapore

    • Last updated on : 10 September, 2025

Growth Drivers

  • Increasing Investment in Green Energy – the rising investment in clean energy as well as an increasing step toward electrifying everything, as clean energy advocates, are anticipated to propel the market growth. For instance, it was found that the investment made by the United States in clean energy amounted to approximately USD 55 Billion in 2019. Moreover, as stated by the International Renewable Energy Agency, for every unit of electricity used by the heat pump, 2.5 to 5.5 units of heat is generated.
  • Growing Efforts to Reduce Carbon Dioxide (CO2) Emission – the growing global population is leading to the increasing utilization of fossil fuels worldwide which is responsible for elevated amounts of greenhouse gas (GHG) emissions, especially CO2. This, as a result, is projected to boost market growth in the upcoming years. As per data residential buildings in the United States alone contribute to nearly 20% of U.S. carbon emissions, with 50% heated by burning fossil fuels.
  • Rising Installation of Heat Pumps – in the Net Zero Scenario, heat pumps are projected to represent over 50% of total heating sales by 2030. The increasing effort from policymakers to popularize the use of heat pumps through offering government incentives, subsidies, tax rebatement, and much more is propelling the sales of heat pumps globally. For instance, over 4 million heat pumps were installed in the U.S. in 2021, up from 1.7 million in 2012.
  • Growing Demand from End-Use Industries – as electrical resistance heating is anticipated to be 61% to 131% more expensive than heat pumps. Moreover, oil and propane are 10% to 60% and 53% to 120% more expensive than heat pumps respectively. This as a result is propelling the deployment of heat pumps in many industries, such as paper, textile, food and beverages, chemical, metal, automotive, mechanical, wood, and many others.

Challenges

  • Restrictive policies on fluorinated gases (F-gas) –F-gases that are often used as substitutes for ozone-depleting substances are powerful greenhouse gases, with a global warming effect up to 25 000 times more than carbon dioxide (CO2). Hence, this is anticipated to impact even heat pump installations as these appliances also use F-gas as a refrigerant. Although the HVAC industry is already using alternative refrigerants for some applications, a full-fledged ban on F-gas is anticipated to hamper the production of many HVAC appliances including heat pumps.
  • Supply chain disruption
  • Reluctance in mass adoption due to high cost

Heat Pump Market Size and Forecast:

Report Attribute Details

Base Year

2025

Forecast Period

2026-2035

CAGR

10.5%

Base Year Market Size (2025)

USD 88.89 billion

Forecast Year Market Size (2035)

USD 241.25 billion

Regional Scope

  • North America (U.S. and Canada)
  • Asia Pacific (Japan, China, India, Indonesia, Malaysia, Australia, South Korea, Rest of Asia Pacific)
  • Europe (UK, Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Latin America (Mexico, Argentina, Brazil, Rest of Latin America)
  • Middle East and Africa (Israel, GCC, North Africa, South Africa, Rest of the Middle East and Africa)
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Heat Pump Market Segmentation:

Application Segment Analysis

The global heat pump market is segmented and analyzed for demand and supply by application into industrial, commercial, and residential. Out of the three applications of heat pumps, the industrial segment is estimated to gain the largest market share of about 45% in the year 2035. The growth of the segment can be attributed to the expansion of the industrial sector which is exhibited by the significantly growing volume of industrial output. For instance, the world manufacturing output in 2021 grew nearly 18.25% from 2020, amounting to USD 16,047 Billion. Moreover, the residential segment is projected to witness a massive CAGR during the forecast period, owing to the rising pool of the escalating global population as well as the increasing construction of residential buildings and residential spaces.  

Technology Segment Analysis

The global heat pump market is also segmented and analyzed for demand and supply by technology into the water source, air source, and ground source. Amongst these three segments, the air source segment is expected to garner a significant share of around 46% in the year 2035. Factors such as the increasing efforts towards green energy transition as well as the adoption of technologies that are affordable and are expected to reduce the global carbon footprint worldwide are anticipated to propel the market growth.

On the other hand, the ground source segment is projected to witness a massive CAGR during the forecast period, owing to the increasing exploration & adoption of geothermal energy globally for heating, cooling, and electricity generation. This, as a result, is anticipated to create numerous opportunities for the growth of the segment in the coming years.

Our in-depth analysis of the global market includes the following segments:

          By Application
  • Industrial
  • Commercial
  • Residential

          By Technology
  • Water Source
  • Air Source
  • Ground Source

         By Operation
  • Heating Only
  • Heating & Cooling
  • Integrated System
  • Water Heater
Vishnu Nair
Vishnu Nair
Head - Global Business Development

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Heat Pump Market Regional Analysis:

APAC Market Insights

The share of the heat pump market in Asia Pacific, amongst the market in all the other regions, is projected to be the largest with a share of about 35% by the end of 2035. The growth of the market can be attributed majorly to the rapidly growing industrialization in the region, especially with the expanding chemical, paper, textile, and automotive industries besides the increasing demand for efficient space and water heating solutions in single and multi-family residential buildings with the rising population and their disposable income. As per findings, the Asian region had the largest regional chemical market in the world. Asia accounted for a nearly 59% share of the global chemical industry's revenue in 2021.

North American Market Insights

The North American heat pump market is estimated to be the second largest, registering a share of about 25% by the end of 2035. The growth of the market can be attributed majorly to the increasing adoption of policies to phase out fossil fuels as a means of heating backed by the climate policy revolution and government initiatives. For instance, as per the plan approved by the New York Commission, all new houses built in the state after 2025 need to use electric systems rather than those running on natural gas, oil, or propane, seeking to require homeowners to replace all fossil-fuel-burning systems with non-carbon-emitting ones after 2030.

Europe Market Insights

Europe region is anticipated to register substantial growth through 2035. The regional market is anticipated to grow on the back of the European Union’s strategy to curb annual emissions as well as increase investment in renewable energy besides the adoption of heat pumps in buildings for heating and cooling. As per findings, the United Kingdom plans to introduce a ban on oil and gas boilers within the next 5 years and has announced a target of selling 600,000 heat pumps annually by 2028. Moreover, research that covered data from 21 countries unveiled that a total of over 16 million heat pump units were installed in these countries of Europe in 2021.

Heat Pump Market Share
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Heat Pump Market Players:

    • Viessmann Climate Solutions SE
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Carrier Global Corporation
    • Daikin Industries, Ltd.
    • Johnson Controls
    • NIBE Group
    • Midea Group
    • Ingersoll Rand Plc.
    • Vaillant Group
    • Robert Bosch GmbH
    • The Danfoss Group

Recent Developments

  • Daikin Industries, Ltd. decided to invest USD 320 million to establish a new factory for heat pump units at the Ksawerów Industrial Park in Lodz Province, Poland. The operations of this new production base will start in July 2024 and will meet the rapidly increasing demand for heat pumps in Europe.

  • Viessmann Climate Solutions SE unveils next-generation heat pumps and invisible heating systems at the world’s leading trade fair ISH in Frankfurt. Viessmann invisible is set to revolutionize heating technology in new builds and its new heat pump generation with natural refrigerant is one of the recent highlights.

  • Report ID: 4834
  • Published Date: Sep 10, 2025
  • Report Format: PDF, PPT
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Frequently Asked Questions (FAQ)

In the year 2026, the industry size of heat pump is assessed at USD 97.29 billion.

The global heat pump market size was valued at over USD 88.89 billion in 2025 and is expected to expand at a CAGR of more than 10.5%, surpassing USD 241.25 billion revenue by 2035.

Asia Pacific heat pump market will dominate more than 35% share by 2035, driven by rapid industrialization and rising demand for efficient heating solutions.

Key players in the market include Viessmann Climate Solutions SE, Carrier Global Corporation, Daikin Industries, Ltd., Johnson Controls, NIBE Group, Midea Group, Ingersoll Rand Plc., Vaillant Group, Robert Bosch GmbH, The Danfoss Group.

Heat Pump Market Report Scope

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