The Rising Demand for Heat Pumps: Factors Driving the Growth
May 15, 2023 / Industry News
The global heat pump market size is expected to expand at a compounded annual
growth rate (CAGR) of 8.1% from 2022 to 2030. The industry growth is expected to
be driven by increased demand for energy-efficient and cost-effective space
heating and cooling applications in residential and commercial housing.
1. Different Heat pump options
Around the globe, people are searching for alternatives to natural gas,
propane, or heating oil furnaces to reduce carbon emissions in their homes. Heat
pumps, which use electricity to extract heat energy from the air, water, or
ground for indoor temperature control, offer an efficient and eco-friendly
option for homeowners. By eliminating the need for fuel combustion, heat pumps
not only save money, but also provide cleaner air quality within the home. Air
source, water source, and ground source heat pumps are the three primary
technologies within this field, each with unique capabilities to pull from
different sources. Air source technology is projected to dominate the market in
Europe and Australia due to increasing awareness of greenhouse gas emissions and
rising demand for eco-friendly air conditioning in the housing sector. It
provides efficient heating and cooling options, low carbon footprint, easy
installation, low maintenance, and cost-effectiveness.
Water source technology utilizes energy stored in the ground, surface, or
seawater, depending on which is more feasible. The heat pump extracts heat from
the water and makes it available for heating, cooling, and hot water
applications ensuring heat is evenly distributed in the provided space by
employing a hydronic distribution system or by using fan coils/ ducted
The ground source segment is projected to register a CAGR of 9.0% over the
forecast period. The increased growth in demand for these products can be
attributed to their supply of stable temperature by maintaining consistency
regardless of the outside temperature along with their low operating costs,
energy-efficient features, and the use of renewable energy sources thereby
helping to mitigate the pollution.
New technologies such as dual-source are emerging into the market which
possess an added advantage of being able to draw heat from either air or the
ground, depending on which source is more convenient which makes them more
effective than other technologies. They are also built with variable-speed
motors to boost energy savings and comfort.
plenty of house builders are simply unaware of heat pumps as an alternative
to fossil fuel installations. New build houses are routinely entering the market
with standard fossil fuel heating, simply because of that lack of knowledge.
2. Driving factors behind the growth
· The government initiatives
The government initiatives including rebates, incentive plans, personal and
corporate tax credits, and clean heating & cooling initiatives are expected
to positively influence the growth of the market. The governments have
implemented renewable energy rebate programs by offering discounts on installing
renewable energy systems including ground source systems in the buildings.
Europe is expected to expand at a CAGR of 8.6% over the forecast period due to
the government initiatives to curb carbon emissions along with rising
environmental concerns that have elevated the demand for sustainable heating
systems in the region.
The EU has set ambitious targets for heat pump installation, aiming for 50
million heat pumps to be installed by 2030, with an annual growth of 16%. That
will be about one third of the 150 million boiler installations in the bloc. To
put the target in context, in 2017 83% of Europe’s heating installations relied
on fossil fuels.
Individual countries have set their own targets. In Germany, for example, the
government announced in December 2021 that from 2025 any household heating
system must run on renewable energy – which has been understood as an implicit
endorsement of heat pumps. In the UK, the aim is for 600,000 heat pumps to be
installed per year. Outside Europe, China leads the world in its promotion of
heat pump water heaters.
The increasing investments in the establishment of greenhouse infrastructure
are expected to further fuel the growth of the market.
· Various advantages of heat pumps
The various advantages of heat pumps such as low maintenance requirements,
economical operations, low carbon footprint, and longer lifespan expectancy have
greatly influenced their demand. Furthermore, its ability to provide
water-heating solutions along with heating and cooling of space is expected to
boost the demand for air source technology over the forecast years.
· Increasinggreenhouse infrastructure investments
The increasing construction activities across residential units in Europe and
Australia along with greenhouse infrastructure investment and the rising demand
for efficient space and water heating solutions will augment the demand in the
single and multi-family residential building industry.
· Find the Best Suppliers of Heat Pumps
Heat pumps, whether ground source, air source, or water source, represent
excellent opportunities for upgrading your business. When choosing a heat pump
manufacturer, it’s essential to consider factors such as quality, reliability,
energy efficiency, innovation, customer service, price, and certifications from
recognized industry organizations to make a well-informed decision that suits
your specific needs.
As an enterprise with more than 20 years of experience in the electrical
appliance industry, Smad considers products and services as the critical
foundation for its survival. Furthermore, to enhance the profit margin of heat
pump dealers and streamline their business processes, Smad has established
offshore warehouses in Europe, facilitating local and small-scale supply chain
services. This has led to customized warehousing solutions for dealers, along
with the flexibility of minimum order quantities, making it easier for heat pump
dealers to conduct business.