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The air source heat pump market size is estimated to increase by USD 50.80 billion, at a CAGR of 11.41% between 2023 and 2028. Environmental concerns are escalating alongside rising energy costs, driving demand for energy-efficient technologies. The market for these solutions benefits from government incentives such as subsidies, tax credits, and rebates, despite initial cost barriers. Effectiveness varies depending on climate conditions, presenting challenges. Additionally, the transition towards low-global warming potential (GWP) solutions poses potential obstacles to market expansion. However, the focus on sustainability and reducing carbon footprints continues to drive innovation and adoption of these technologies. As stakeholders navigate these complexities, advancements in energy-saving technologies remain pivotal in meeting both environmental goals and economic objectives in the evolving landscape of energy consumption and conservation.
Market Forecast 2024-2028
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The air-to-water segment is estimated to witness significant growth during the forecast period. One of the main factors that is fuelling the growth of the air-to-water segment is the increasing focus on environmental sustainability and energy efficiency. In addition, air-to-water heat pumps are becoming increasingly common because of their cost-effectiveness, eco-friendliness, and adaptability to different climates. Furthermore, these pumps effectively transfer heat from the outside air to provide hot water and space heating.
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The air-to-water segment was the largest and was valued at USD 26.97 billion in 2018. Moreover, the demand for air-to-water heat pumps is further supported by government incentives and regulations that encourage the adoption of energy-efficient heating solutions. In addition, air-to-water heat pumps are expected to develop at a strong rate and become a dominant product in the global market as more people and businesses look to cut back on their energy use and carbon footprint. Hence, such factors are fuelling the growth of this segment which in turn drives the market growth during the forecast period.
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North America is estimated to contribute 37% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. One of the main factors that is contributing to the growth of air-source heat pumps in North America is the growing need for heat pump systems due to the focus on environmental sustainability and energy efficiency. In addition, initiatives like the US's Clean Energy for America Act, offer tax breaks for the installation of energy-efficient heating and cooling equipment. Moreover, a greater awareness among customers of their energy expenses and carbon footprint has resulted in a higher uptake of these systems. Furthermore, since air-source heat pumps can provide both heating and cooling, they have become increasingly popular in regions of North America with extreme weather, such as harsh winters in the north and scorching summers in the south. Hence, such factors are driving the market growth in North America during the forecast period.
The market is experiencing a surge in demand due to the increasing focus on energy efficiency and environmental sustainability. This technology, which utilizes renewable energy sources like propane and solar thermal systems, helps reduce greenhouse gas emissions and reliance on non-renewable energy sources. With features such as ductless heat pumps and air-to-water heat pumps, it caters to both residential and commercial sectors, contributing to significant energy savings and improved indoor air quality. As businesses and homeowners prioritize infrastructure renovation to enhance efficiency, air-source heat pumps emerge as a key solution for heating and cooling needs. Additionally, advancements in smart home platforms further optimize energy usage patterns, emphasizing the market's role in combating climate change while providing substantial initial savings and operational cost reductions.
The global market is witnessing significant growth driven by the pressing need to reduce greenhouse gas emissions and combat climate change. With increasing awareness of environmental issues, there's a notable shift towards energy-efficient and sustainable heating and cooling systems. Air source heat pumps, utilizing heat from the air for heating and cooling purposes, are gaining traction due to their small carbon footprint. Initiatives like the European Union's emission reduction goals are driving the replacement of traditional heating systems with air source heat pumps, leading to substantial reductions in carbon emissions. Additionally, rising environmental consciousness worldwide, particularly in North America and APAC, is fueling the adoption of these systems to lower energy usage and address climate concerns.
The integration of smart technology and IoT features is a major trend in the global market as it improves the functionality and efficiency of these systems. In addition, users can remotely monitor and operate their heating and cooling systems by connecting them to the internet. Furthermore, this allows for immediate changes through web interfaces or smartphone apps.
Moreover, to maximize energy use, homeowners can, for example, pre-cool or pre-heat their spaces before returning home. In addition, real-time diagnostics and predictive maintenance help personnel find problems early, cutting down on maintenance expenses and downtime. Furthermore, this trend, which is in line with the larger shift towards energy-efficient and environmentally friendly HVAC solutions, not only increases user convenience but also helps with energy savings and sustainability by allowing more accurate and effective management of these pumps. Hence, such factors are expected to drive the growth of the global market during the forecast period.
Even though these systems promise long-term energy savings, the initial upfront cost of purchasing and installing them is a major challenge in the global market, turning off potential customers. In addition, due to the equipment, installation, and, in certain situations, required home changes, these systems are relatively costly.
Moreover, the installation of a high-efficiency air source heat pump can be expensive, and there may be further costs if the house does not have enough ducting or insulation. In addition, though over time, air source heat pumps can significantly lower heating and cooling expenditures, this financial barrier may deter consumers on a tight budget from making the initial purchase. Hence, such factors are hindering the market growth during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
A. O. Smith India Water Products Pvt. Ltd: The company offers air source heat pump products such as heat pump water heater, which has a dedicated outdoor unit that can be placed on a terrace, balcony, and service areas.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including Alibaba Group Holding Ltd., Ariston Holding NV, BDR Thermea Group, Carrier Global Corp., Colmac Industries Inc., Daikin Industries Ltd., Danfoss AS, Emerson Electric Co., Fujitsu General Ltd., Glen Dimplex Europe Holdings Ltd., Grant Engineering UK Ltd., Groupe Airwell, Haier Smart Home Co. Ltd., Hitachi Ltd., Ingersoll Rand Inc., Jaquar Group, Mitsubishi Electric Corp., NIBE Industrier AB, and Robert Bosch GmbH
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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The market is driven by its efficiency in heating and cooling applications across residential, commercial, and industrial sectors. These pumps utilize cutting-edge technologies to minimize energy consumption and operational costs, making them pivotal in urbanization and construction projects. With a focus on sustainable refrigerants and reducing greenhouse gas footprint, they integrate seamlessly with renewables like solar panels to combat carbon dioxide emissions and air pollution. Advancements in connected heat pumps and smart systems enhance adaptability and optimize electrical infrastructure in HVAC systems, catering to climate policy initiatives. From cold-climate heat pumps to hybrid systems, these pumps offer energy savings and are pivotal in infrastructure renovation for green and geothermal energy solutions, ensuring a sustainable future in heating and cooling technology. In addition, the market plays a crucial role in heating and cooling applications across commercial, industrial, and residential sectors. These pumps leverage smart and connected systems to optimize efficiency and integrate seamlessly with renewables such as solar heating.
Also, they offer significant energy savings compared to conventional heating technologies and are pivotal in infrastructure renovation projects aimed at reducing greenhouse gases and promoting climate policy initiatives. Known for their adaptability and ability to operate in varied climates, including cold climates, they address noise concerns and minimize startup costs. From hybrid systems to heat pump water heaters, these pumps are transforming the HVAC industry by providing sustainable heating and cooling solutions with a focus on geothermal heat pumps and ground-source heat pump units. market spans commercial and residential infrastructure renovation, offering efficient heating and cooling solutions. These pumps are integral in sectors like pharmaceutical, biotechnology, and chemicals, utilizing dry vacuum pumps for optimal performance. They incorporate air to water heat pump technology for sustainable operations and are crucial in reducing oil dependency. The market's growth is driven by advancements in laboratory vacuum pumps and meets diverse commercial needs with innovative solutions.
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Market Scope |
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Report Coverage |
Details |
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Page number |
157 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 11.41% |
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Market Growth 2024-2028 |
USD 50.80 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
10.75 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East, and Africa |
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Performing market contribution |
North America at 37% |
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Key countries |
US, Canada, China, UK, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
A. O. Smith India Water Products Pvt. Ltd., Alibaba Group Holding Ltd., Ariston Holding NV, BDR Thermea Group, Carrier Global Corp., Colmac Industries Inc., Daikin Industries Ltd., Danfoss AS, Emerson Electric Co., Fujitsu General Ltd., Glen Dimplex Europe Holdings Ltd., Grant Engineering UK Ltd., Groupe Airwell, Haier Smart Home Co. Ltd., Hitachi Ltd., Ingersoll Rand Inc., Jaquar Group, Mitsubishi Electric Corp., NIBE Industrier AB, and Robert Bosch GmbH |
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Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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