Global heat pump market to surpass US$84 billion by 2028

By Dominic Ellis
Growing adoption of next-generation heat pumps across residential and commercial sectors will drive market growth, according to Global Market Insights

The global heat pump market value is expected to surpass US$84 billion by 2028, according to the latest study by Global Market Insights.

Growing adoption of next-generation heat pumps across residential and commercial sectors is set to drive the market growth and the transition toward sustainability is increasing the adoption of low-emission technologies owing to favourable government regulations and policies will fuel the product adoption.

For instance, the UK government has provided incentives for cost-effective installation and generation of renewable heating technologies as per the Renewable Heat Incentive Scheme.

The water source segment is set to register over 6% CAGR through 2028. The regulatory shift toward energy conservation and reducing carbon emissions is projected to fuel the market statistics. 

Increasing urbanisation rate coupled with the growing population has positively influenced the construction of commercial buildings, elevating the demand for heat pumps.

The ability of the products to provide both heating and cooling along with high efficiency is set to stimulate the product installations across various sectors. In addition, the increasing product adoption in the district heating applications owing to their ability to offer heating and cooling across buildings will significantly boost the industry outlook.

Key findings

  • A "paradigm shift" toward the deployment of space heating systems across the residential and commercial establishments will boost the product deployment
  • Shifting focus toward sustainable energy over conventional sources will boost the industry outlook
  • Major players operating in the heat pump industry include Trane, Viessmann, Bard HVAC, and Mitsubishi Electric Corporation, among others.

McKinsey notes that with declining electricity costs heat pumps will reach total cost of ownership parity by 2030, and will then see sharp growth in residential and commercial sectors. "In the meantime, continued favourable regulation ... will ensure that the production of such heat pumps continues on the learning curve." 

Delta-EE recently forecasted that heat pump costs could fall by as much as 40% over a 10-year period. As much as 20% of this cost reduction will largely be driven by market competition squeezing margins across the supply chain, it believes.

However Lindsay Sugden, Head of Heat at Delta-EE, said while grants announced in the UK Heat and Building Strategy are a step in the right direction to decarbonising a crucial area in overall emissions, these proposals are not sufficient to achieve the government’s decarbonisation goals. "Our research suggests reaching a 25-50% cost reduction, as proposed in the Heat and Building Strategy, is unlikely to be met, especially by 2025 as is currently suggested.”

From $7,691.2 million in 2020, the French liquefied petroleum gas market revenue is set to witness a 2.1% CAGR between 2020 and 2030, to reach $9,480.3 million by 2030. The biggest factor driving the demand for this product is the low upfront cost of LPG boilers. For instance, an air-source heat pump (ASHP) costs almost thrice as much as an LPG boiler.

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