Heat Pump Water Heater Market by type (Air Source, Geothermal), Storage (Up to 500 L, 5001000 L, Above 1000 L), Capacity (Up to 10 kW, above 10 kW), Refrigerant (R410A, R407C, R744), End-User (Residential, Commercial, Industrial), Region - Global Forecast to 2026
[261 Pages Report] The global heat pump water heater market size is projected to reach USD 2.1 billion by 2026 from an estimated value of USD 1.4 billion in 2020, at a CAGR of 6.8%. Factors driving the growth of the heat pump water heater market include the energy efficient technology along with the usage of non conventional sources of energy to heat the water. In addition, supportive regulations and grants for using renewable sources of energy in different applications are also expected to play a key role in the growth of this market during the forecast period.
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Heat Pump Water Heater Market Dynamics
Driver: Reduction in CO2 Emission
The production and consumption of energy lead to the emission of carbon dioxide (CO2), which is released in substantial amounts through the burning of fossil fuels, such as coal, oil, and natural gas. Many countries are aiming to reduce their primary energy demand due to the increasing CO2 emissions and implement policies to restrict the emission of greenhouse gases. Heat pump water heater is one of the most promising technologies for reducing greenhouse gas emissions. A heat pump water heater offers an energy-efficient way to provide heating through aerothermal and geothermal technologies. Exhaust air, groundwater, and surface water (lake, river, or pond) are the other examples of commonly used heat sources. Heat pump water heaters take the ambient heat from air, water, and ground at low temperatures and increase the water temperature level through energy input, mostly from electricity. To heat the water, air source or water source heat pump uses 66 to 80% of the heat from renewable heat sources in the environment and 20 to 33% electrical energy for the heat pump compressor. Hence, carbon emissions associated with energy consumption and generation can be reduced significantly by using heat pump water heater systems instead of fossil fuel-based systems. This is driving the increase in the number of installation of heat pump water heaters in residential, commercial, and industrial segments.
Restraint: Lack of awareness regarding benefits of heat pump water heaters in developing and underdeveloped countries
The awareness regarding energy efficiency, cost efficiency, and environmental benefits of heat pump water heaters is low among all end user segments. This is because they are typically perceived to be expensive, which acts as a restraint for market penetration in developing as well as underdeveloped economies. There is also a lack of awareness regarding the opportunities that heat pump water heaters provide for energy conservation and reduction of CO2 emissions.
According to a report published by the United Nations Environment Programme, there is a lack of awareness among the contractors regarding the International Organization for Standardization (ISO) standards for heat pumps. Thus, the lack of awareness of heat pump technology across the entire supply chain (technicians, consultants, engineers, contractors, and end users) is a barrier to the adoption of heat pump water heaters in developing and underdeveloped countries.
Opportunity: Integration of Iot with heat pump water heaters
Internet of Things (IoT)-enabled heat pump water heater systems are expected to offer real-time monitoring, predictive maintenance, and remote diagnostics for heat pump water heaters. IoT-enabled heat pump water heater systems consist of smart thermostats that help in monitoring environmental changes and communicating with the heat pump water heater equipment. Technologically advanced software enable heat pump water heater systems to leverage data for continuous improvements in efficiency and energy-savings. For instance, building management systems (BMS) involve the installation of sensors, software, a network, and a cloud-based data store. Their functions include the management of boilers, chillers, pumps, air handling units, rooftop units, heat pumps, VAV boxes, radiators, fan coil units, exhaust fans, and security & safety operations. Such systems help facility managers to easily manage heat pump water heater systems, thus saving time and cost. Integration with IoT helps in tracking the abnormalities in heat pump water heaters, subsequently reducing system failure. Thus, the integration of IoT with heat pump water heaters is providing significant opportunities for the growth of the market.
Challenge: High installation cost
Heat pump water heater systems are used to increase the energy-efficiency, reduce energy costs, and lower the carbon emissions in residential, commercial, and industrial sectors. Heat pump water heaters are of two types: aerothermal heat pumps (air source heat pumps) and geothermal heat pumps (ground source heat pumps). Air source heat pump water heaters are more common, as they are less expensive and efficient enough to service most homes and small commercial buildings. Geothermal heat pump water heaters are typically costlier to install because of underground installation. High-density polyethylene pipes are required to be put in the ground, which takes a team of specialists at least three days to install the pipes and the entire system, although they are more efficient and can service bigger buildings.
The installation cost of heat pump water heater equipment for residential, commercial, and industrial applications depends on various factors. For instance, in the residential application, the installation cost of all heat pump systems depends on the size of homes, additional ductwork, type of equipment, and British Thermal Unit (BTU) value of the equipment. The cost of installation of a heat pump water heater also depends on the complexity, type, brand, and size of the heat pump. Thus, the high installation cost is a challenge that can hamper the growth of the heat pump market.
By type, the air source segment is the largest contributor in the heat pump water heaters market during the forecast period.
The air source segment is estimated to be the largest- segment of the heat pump water heate market, by type, from 2020 to 2026. The demand for air source heat pump is growing majorly in the residential sector owing to its low installation cost and environmental friendly technology. They are mainly used in Asia Pacific owing to the fact that countries such as China, Australia, Thailand, and New Zealand are focusing on limiting their carbon footprint resulting from the use of fossil fuels.
By storage tank capacity, the up to 500 LT segment is expected to grow at the fastest rate during the forecast period.
Heat pump water heaters falling under this category are compact and hence, are easy to install. They provide ample hot water for almost all small commercial applications and residential sector. Hence, water heaters with this capacity are suitable for less hot water requirement applications in small commercial establishments and residential sector that includes homes and multi family buildings. Small individual heat pump water heaters of up to 500 liters capacity are used in the hospitality sector for holiday homes and motels as they ensure interruption-free availability of hot water for bathing, personal laundry, etc. applications.
By rated capacity, the 1020 kW segment is expected to be the largest contributor during the forecast period.
The 1020kW segment is estimated to dominate the market from 2020 to 2026. In the residential sector, the requirement of instant hot water has been rising at a significant rate. This led to the deployment of low-powered heat pump water heater to cater to this instant hot water requirements majorly for residential sector. Heat pump water heater with 1020 kW rated capacity are easy to use, offer high operational efficiency.
By refrigerant type, R410A segment is expected to be the largest market during the forecast period.
The R410A is expected to be the largest market from 2020 to 2026. R410A is a low-pressure gas that is stored in copper coils. When incorporated with copper, it absorbs the heat that passes through various copper components. R410A is a gas which is used as a refrigerant in HVAC for heating and cooling applications. It used in heat pump water heater as it does not contribute to ozone depletion and is non toxic in nature.
By end user, residential sector is expected to be the largest market during the forecast period.
The residential segment of the heat pump water heater market, by end user, is expected to contribute the largest share in the heat pump water heater market during the forecast period. The adoption of heat pump water heaters is increasing in the residential sector, majorly due to its energy-efficiency technology and various government initiatives in the form of subsidy or tax benefit offered in order to enhance the demand for heat pump water heater.
Asia Pacific is expected to account for the fastest growing market size during the forecast period.
Asia Pacific is expected to dominate the heat pump water heater market during the forecast period as owing to the increase in the use of renewable energy and energy efficient products. Several leading players in the heat pump water heater market such as A.O. Smith Corporation, Midea Group, RHEEM Manufacturing, and Mitsubishi Electric have their manufacturing facilities in countries such as China, India, and Thailand. The region is home to a number of emerging economies such as China, India, New Zealand, and Malaysia. These countries are taking various initiatives to enhance the installation of het pump water heater in order to increase the energy efficiency and reduce environmental pollution. The figure below shows the projected market sizes of various regions with respective CAGRs for 2026.
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Key Market Players
The key players in the heat pump water heater market include Midea Group (China), RHEEM Manufacturing Company (US), Daikin (Japan), A.O. Smith Corporation (US), Bosch Industries (Germany), and Ingersoll Rand (US), etc. and other players such as Viessmann Group (Germany), NIBE Energy Systems (Sweden), Valliant Group (Germany), Daikin (Japan), Mitsubishi Electric (Japan), Glen Dimplex (Ireland), Stiebel Eltron (Germany), and more
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Report Metric |
Details |
|
Market Size available for years |
20162026 |
|
Base year considered |
2019 |
|
Forecast period |
20202026 |
|
Forecast units |
Value (USD) |
|
Segments covered |
Type, Storage Tank Capacity, Rated Capacity, End User and Region. |
|
Geographies covered |
Asia Pacific, South America, North America, Europe. |
|
Companies covered |
Midea Group (China), RHEEM Manufacturing Company (US), Daikin (Japan), A.O. Smith Corporation (US), Bosch Industries (Germany), and Ingersoll Rand (US), etc. (25 total) |
This research report categorizes the heat pump water heater market based on Type, Storage Tank Capacity, Rated Capacity, end user, and Region.
Based on the Type :
- Air source
- Geothermal
Based on the Rated Capacity:
- Up to 10 kW
- 10‒20 kW
- 20‒30 kW
- 30‒100 kW
- 10150 kW
- Above 150 kW
Based on the Storage Tank Capacity:
- Up to 500 LT
- 500‒1,000 LT
- Above 1,000 LT
Based on the region:
- Asia Pacific
- Europe
- North America
- South America
Recent Developments
- In July 2020, Daikin launched Daikin SmartSource, a dedicated outdoor air system (DOAS) for heat pumps that enables efficient and cost effective cooling and heating in all conditions using 100% fresh outside air. It also taps a water source heat pump's hot gas reheat coil in addition to the unit's primary DX coil; to enhances the efficiency of the heat pump
- In August 2020, Panasonic Corporation partnered with Systemair on technology to launch heating and cooling products for offering its customers with more options related to HVAC products, including heat pumps. Both companies will have their separate sales channels and branding for these products.
- RHEEM Manufacturing Company acquired Intergas, which was into the manufacturing of high-efficiency residential gas boilers and water heaters. The acquisition will help the company to obtain a first-class platform in the European heating and hot water market and an increase in the market share.
Frequently Asked Questions (FAQ):
What is the current size of the heat pump water heater market?
The size of the global heat pump water heater market is USD 1.5 billion in 2019.
What are the major drivers for the heat pump water heater market?
Factors driving the growth of the heat pump water heater market include the energy efficient technology along with the usage of non conventional sources of energy to heat the water. In addition, supportive regulations and grants for using renewable sources of energy in different applications are also expected to play a key role in the growth of this market during the forecast period.
Which region dominates during the forecasted period in the heat pump water heater market?
Asia Pacific is the largest and the fastest growing region during the forecasted duration and countries such as China, Indonesia, and Australia are the fastest-growing markets in the Asia Pacific region, owing to the increased emphasis on renewable based technology and energy efficiency.
Which is the fastest-growing type segment during the forecasted period in the heat pump water heater market?
The air source segment is the fastest-growing during the forecasted period due to the increased awareness about the usage of renewable technology in water heating for residential, commercial, and industrial sector. Additionally, supportive grants, incentives, and regulations are also helping this market to grow at a healthy pace.
This study involved four major activities in estimating the current market size for heat pump water heaters. Exhaustive secondary research was done to collect information on the market and the peer market. The next step was to validate these findings, assumptions, and market sizing with industry experts across the value chain through primary research. Both top-down and bottom-up approaches were used to estimate the total market size. After that, the market breakdown and data triangulation were done to estimate the market size of the segments and subsegments.
Secondary Research
This research study involved the use of extensive secondary sources, directories, and databases, such as Hoovers, Bloomberg BusinessWeek, Factiva, and OneSource, to identify and collect information useful for a technical, market-oriented, and commercial study of the global heat pump water heaters market. The other secondary sources included annual reports, press releases & investor presentations of companies, white papers, certified publications, articles by recognized authors, manufacturer associations, trade directories, and databases.
Primary Research
The heat pump water heater market comprises several stakeholders, such as service providers, contractors, and third-party vendors. The demand side of this market is characterized by the huge demand for digitalization from operators/service providers. Advancements in new technology in heat pump water heaters characterize the supply side. Various primary sources from both the supply and demand sides of the market were interviewed to obtain qualitative and quantitative information. The breakdown of primary respondents is as following
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Market Size Estimation
Both top-down and bottom-up approaches have been used to estimate and validate the size of the global heat pump water heater market and its dependent submarkets. These methods were also used extensively to estimate the size of various subsegments in the market. The research methodology used to estimate the market size includes the following:
- The key players in the industry and market have been identified through extensive secondary research, and their market shares in the resective regions have been determined through both primary and secondary research.
- The industrys supply chain and market size, in terms of value, have been determined through primary and secondary research processes.
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources.
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Data Triangulation
After arriving at the overall market sizeusing the market size estimation processes as explained abovethe market was split into segments and subsegments. To complete the overall market engineering process and arrive at the exact statistics of each market segment and subsegment, the data triangulation, and market breakdown procedures were employed, wherever applicable. The data was triangulated by studying various factors and trends from both the demand and supply sides.
Report Objectives
- To define, describe, and forecast the global heat pump water heaters market by type, by storage tank capacity, by rated capacity, by refrigerant,, by end user and region
- To provide detailed information on the major factors influencing the growth of the heat pump water heater market (drivers, restraints, opportunities, and industry-specific challenges)
- To strategically analyze the heat pump water heaters market with respect to individual growth trends, prospects, and contribution of each segment to the market
- To analyze market opportunities for stakeholders and details of a competitive landscape for market leaders
- To forecast the growth of the heat pump water heaters market with respect to the major regions (Asia Pacific, Europe, North America, and South America)
- To strategically profile key players and comprehensively analyze their market share and core competencies
- To track and analyze competitive developments such as contracts & agreements, expansions, new product developments, and partnerships in the heat pump water heater market
Available Customizations:
With the given market data, MarketsandMarkets offers customizations as per the clients specific needs. The following customization options are available for this report:
Regional Analysis
- Further breakdown of region or country-specific analysis
Company Information
- Detailed analyses and profiling of additional market players (up to 5)
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