Heat Pump Water Heater Market by Type (Air-to-Air, Air-to-Water, Water Source, Geothermal, Hybrid), Storage Tank (Up to 500 L, 500-1,000 L, Above 1,000 L), Refrigerant Type (R410A, R407C, R744), Rated Capacity, End User Region - Global Forecast to 2028
[316 Pages Report] The global heat pump water heater market is estimated to grow from USD 5.2 billion in 2023 to USD 10.2 billion by 2028; it is expected to record a CAGR of 14.4% during the forecast period. Heat pump water heaters are distinguished by their ability to harness air, water, or geothermal heat for hot water production, establishing them as a compelling option for energy-efficient water heating solutions. The global market for these systems has experienced consistent growth, propelled by rising demand and favorable regulatory environments. The incorporation of heat pump water heaters with renewable energy sources, including solar panels, plays a pivotal role in their widespread adoption. This integration facilitates the effective utilization of surplus renewable energy to heat water, diminishing dependence on fossil fuels. This strategic alignment with the worldwide objective of transitioning to cleaner and more sustainable energy solutions serves as a driving force behind the continued expansion of the market.
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Heat Pump Water Heater Market Dynamics
Driver: Rising demand for residential and commercial water heating solutions
The increasing demand for residential and commercial water heating solutions is a transformative force shaping the global heating industry. This upsurge reflects broader societal changes driven by factors such as population growth, urbanization, and heightened expectations for comfort and convenience. Specifically within the heat pump water heater market, this trend acts as a significant catalyst, influencing product development, market strategies, and the overall trajectory of the industry. Governments and regulatory bodies are increasingly recognizing the environmental impact of energy-intensive systems and are incentivizing the adoption of eco-friendly technologies. This regulatory support, manifesting through energy efficiency standards, subsidies, and incentives, further propels the demand for heat pump water heaters. The market's response to these regulatory measures indicates a broader societal shift towards sustainable living and responsible consumption.
Technological advancements play a pivotal role in meeting the escalating demand for water heating solutions. The heat pump water heater market is witnessing continuous innovation in terms of system efficiency, integration with smart technologies, and adaptability to various climatic conditions. Enhanced compressor technologies, advanced heat exchanger designs, and improved control systems contribute to higher performance standards, making heat pump water heaters more versatile and appealing to a broader consumer base. The increasing demand for water heating solutions also presents an opportunity for market players to engage in strategic partnerships and collaborations. Collaborations between manufacturers, energy providers, and construction companies can lead to integrated solutions addressing not only the heating needs of consumers but also broader energy efficiency goals. Partnerships with technology companies can facilitate the incorporation of smart features, enhancing the usability and control of water heating systems.
Restraint: Variability in performance based on climate conditions
Heat pump water heaters excel in extracting ambient heat from the surrounding air, making them highly efficient in moderate and warmer climates. However, their effectiveness is significantly impacted by colder temperatures, presenting a climatic sensitivity that poses challenges for regions enduring extended periods of low temperatures. This challenge may result in diminished efficiency and increased energy consumption. Climate variability's impact on heat pump water heater performance extends beyond operational efficiency; it also affects the overall system lifespan. In regions with frequent temperature drops below freezing, components such as the compressor and heat exchanger may experience additional stress and wear. This can result in increased maintenance requirements and potentially shorten the lifespan of the equipment, leading to higher long-term costs for consumers and reduced system reliability.
Opportunities: Integration of IoT with heat pump water heaters
It is anticipated that heat pump water heaters equipped with Internet of Things (IoT) capabilities will provide remote diagnostics, predictive maintenance, and real-time monitoring. Smart thermostats that monitor environmental changes and communicate with the heat pump water heater equipment are a component of Internet of Things (IoT)-enabled heat pump water heater systems. Heat pump water heater systems can use data to continuously enhance performance and save energy thanks to sophisticated software. For example, the installation of sensors, software, a network, and a cloud-based data store is part of building management systems (BMS). Among the things they oversee are boilers, chillers, pumps, rooftop units, heat pumps, VAV boxes, radiators, fan coil units, exhaust fans, and security and safety procedures. Facility managers can maintain heat pump water heater systems more quickly and affordably thanks to these systems. Integration with IoT reduces system failure by tracking abnormalities in heat pump water heaters. Consequently, given the integration of IoT with heat pump water heaters, there are numerous opportunities for market expansion. Among the things they oversee are boilers, chillers, pumps, rooftop units, heat pumps, VAV boxes, radiators, fan coil units, exhaust fans, and security and safety procedures. These systems save time and money by making it easier for facility managers to maintain heat pump water heater systems. By tracking anomalies in heat pump water heaters, integration with IoT helps to lower system failure. Therefore, there are a lot of prospects for market expansion given the integration of IoT with heat pump water heaters.
Challenges: High installation costs
Heat pump water heater systems play a pivotal role in enhancing energy efficiency, cutting energy expenses, and mitigating carbon emissions across residential, commercial, and industrial settings. These systems come in two main types: aerothermal heat pumps (air source heat pumps) and geothermal heat pumps (ground source heat pumps). Air source heat pump water heaters are more prevalent, offering cost-effectiveness and efficiency suitable for most homes and small commercial structures. On the other hand, geothermal heat pump water heaters tend to be pricier due to their underground installation, involving the placement of high-density polyethylene pipes. Despite the longer installation period, geothermal systems boast enhanced efficiency and are ideal for larger buildings.
The installation expenses for heat pump water heater equipment in residential, commercial, and industrial contexts hinge on various factors. In residential applications, costs are influenced by home size, additional ductwork, equipment type, and the British Thermal Unit (BTU) value of the system. The installation cost of a heat pump water heater is also contingent on factors such as complexity, type, brand, and size of the heat pump. Consequently, the higher installation costs pose a challenge that may impede the growth of the heat pump market.
Heat pump water heater market Ecosystem
In the heat pump water heater market, leading enterprises distinguish themselves as established and financially sound providers of products and services. Boasting extensive experience, these companies showcase a diverse product range, cutting-edge technologies, and robust global sales and marketing networks. Their proven track record in the industry establishes them as dependable and trusted partners for customers seeking heat pump water heater solutions. Demonstrating adaptability to market dynamics, these companies consistently deliver high-quality products and services, positioning them as leaders in addressing the energy and power sector's demands. Notable players in this market include Panasonic Corporation (Japan), LG Electronics (South Korea), Johnson Controls-Hitachi Air Conditioning (Japan), Mitsubishi Electric Corporation (Japan), and Trane Technologies plc (Ireland).
By End user industry, the residential segment is expected to be the largest segment in the market during the forecast period.
Based on the end user segment, the heat pump water heater market is segmented into three categories: residential, commercial, and industrial. The Residential segment is expected to be the largest segment during the forecast period. Heat pump water heaters are more cost-effective in the long run than standard water heaters since they use less energy and require less maintenance. Heat pump water heaters are becoming increasingly popular among homes looking for energy-efficient, cost-effective, and ecologically friendly water heating options. Governments throughout the world are offering incentives and subsidies to encourage the use of energy-efficient devices such as heat pump water heaters. These incentives have reduced the cost of heat pump water heaters for homeowners.
By storage tank capacity, up to 500 liters is expected to be the fastest-growing segment during the forecast period.
Based on the storage tank capacity segment the heat pump water heater market is categorized into three categories: up to 500 liters, 500–1,000 liters, and above 1,000 liters. Up to 500 liters segment is expected to be the fastest growing segment during the forecast period. Heat pumps with up to 500 liters capacity are widely used for water heating due to their compact size, ease of installation, and suitability for small commercial and residential applications. These heat pumps are suitable for less hot water requirement applications in small individual heat pump water heaters of up to 500 liters capacity, such as in hospitality, personal laundry, and other similar applications. Additionally, government subsidies for residential heat pumps are driving the market for heat pump water heaters with up to 500 liters capacity.
Asia Pacific: The largest in the heat pump water heater market.
Asia Pacific is expected to be the largest region in the heat pump water heater market in 2023. Asia Pacific has been leading the heat pump water heater market. The regional heat pump water heater market is experiencing growth due to the presence of leading heat pump water heater providers Panasonic Corporation (Japan), LG Electronics (South Korea), Johnson Controls–Hitachi Air Conditioning (Japan), Mitsubishi Electric Corporation (Japan). China, India, New Zealand, and Malaysia are among the region's rising economies. The development in urbanization and economic growth has resulted in an increase in commercial building construction, such as retail malls, hospitals, hotels, and manufacturing facilities, driving demand for heat pump water heaters.
Key Market Players
The heat pump water heater market is dominated by a few major players that have a wide regional presence. The major players in the heat pump water heater market include Panasonic Corporation (Japan), LG Electronics (South Korea), Johnson Controls–Hitachi Air Conditioning (Japan), Mitsubishi Electric Corporation (Japan), and Trane Technologies plc (Ireland). Between 2018 and 2023, Strategies such as new product launches, contracts, agreements, partnerships, collaborations, acquisitions, and expansions are followed by these companies to capture a larger share of the heat pump water heater market.
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Report Metric |
Details |
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Market size available for years |
2019–2028 |
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Base year considered |
2022 |
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Forecast period |
2023–2028 |
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Forecast units |
Value (USD Million/Billion), Volume (MW/KW) |
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Segments Covered |
Heat pump water heater market by Type, End user industry, by Rated capacity, by Refrigerant type, by Storage tank capacity and Region. |
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Geographies covered |
Asia Pacific, North America, Europe, Middle East & Africa, South America |
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Companies covered |
Panasonic Holdings Corporation (Japan), LG Electronics (South Korea), Johnson Controls-Hitachi Air Conditioning (Japan), Midea Group (China), RHEEM Manufacturing Company (US), Daikin (Japan), A. O. Smith Corporation (US), Bosch Industries (Germany), and Ingersoll Rand (US), Viessmann Group (Germany), NIBE Energy Systems (Sweden), Valliant Group (Germany), Mitsubishi Electric (Japan), Glen Dimplex (Ireland), Stiebel Eltron (Germany), Trane Technologies plc (Ireland), Haier (China), Fujitsu General (Japan), Emerson (US), Gree Electric Appliances (China), Ariston Holding N.V. (Italy), EVO Energy Technologies (Austria) Namma Swadeshi (India), Ecotech Solutions, Guangzhou SPRSUN New Energy Technology Development (China), Electrify my home (US). |
This research report categorizes the heat pump water heater market based on by Type, End user industry, by Rated capacity, by Refrigerant type, by Storage tank capacity and Region.
On the basis of type:
- Air-to-Air heat pump water heater
- Air-to-Water heat pump water heater
- Water source heat pump water heater
- Ground source (geothermal) heat pump water heater
- Hybrid heat pump water heater
On the basis of End user industry:
- Residential
- Commercial
- Industrial
On the basis of refrigerant type:
- R410A
- R407C
- R744
- Others
On the basis of storage tank capacity:
- Upto 500 liters
- 500–1,000 liters
- Above 1,000 liters
On the basis of rated capacity:
- UP TO 10 KW
- 10–20 KW
- 20–30 KW
- 30–100 KW
- 100–150 KW
On the basis of region:
- Europe
- North America
- Asia Pacific
- Middle East & Africa
- South America
Recent Developments
- In January 2023, Fujitsu General established a joint venture with FGAHP, a manufacturer of heat pump and water solutions, for the manufacture of heat pump water heating systems known as ATW within Europe.
- In December 2022, Fujitsu General Limited and Groupe Atlantic established a joint venture for the manufacture of heat pump water heating systems ATW within Europe.
- In October 2022, The expansion plan for Panasonic Corporation's air-to-water (A2W) heat pump business in Europe was revealed. The company intends to introduce three new eco-friendly models with varying heating capacities for homes in Europe that use natural refrigerants.
- In August 2020, Johnson Controls-Hitachi Air Conditioning acquired McDowall Air Conditioning, which provides specialist design, manufacture, installation, and servicing of HVAC systems. The acquisition will help the company to increase its customer base for heat pump water heaters and market share for HVAC equipment.
- In June 2020, Johnson Controls-Hitachi Air Conditioning acquired East Lancashire Refrigeration, which provides specialist design, manufacture, installation, and servicing of HVAC systems. The acquisition will help the company enhance its customer base for heat pump water heaters and market share for HVAC equipment.
Frequently Asked Questions (FAQ):
What is the current size of the heat pump water heater market?
The current market size of the heat pump water heater market is USD 5.2 billion in 2023.
What are the major drivers for the heat pump water heater market?
Growing demand for sustainable development and supportive government policies to decarbonize various sectors are some of the major drivers for the heat pump water heater market.
Which is the largest region during the forecasted period in the heat pump water heater market?
Asia Pacific is expected to dominate the heat pump water heater market between 2023–2030, followed by North America & Europe.
Which is the largest segment, by rated capacity, during the forecasted period in the heat pump water heater market?
The 10-20 kw heat pump water heater segment is expected to be the largest market during the forecast period owing to the relatively mature and cost-effective technology.
Which is the fastest segment, by end-user industry, during the forecasted period in the heat pump water heater market?
Residential is expected to be the fastest market during the forecast period by application. The growth is attributed to the penetration of renewables in the energy system. .
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The study involved major activities in estimating the current size of the heat pump water heater market. Exhaustive secondary research was done to collect information on the peer and parent markets. The next step was to validate these findings, assumptions, and sizing with industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the total market size. Thereafter, market breakdown and data triangulation were used to estimate the market size of the segments and subsegments.
Secondary Research
This research study on the heat pump water heater market involved the use of extensive secondary sources, directories, and databases, such as Hoover’s, Bloomberg, Factiva, IRENA, International Energy Agency, and Statista Industry Journal, to collect and identify information useful for a technical, market-oriented, and commercial study of the heat pump water heater 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 heat pump water heater manufacturers, technology providers, and technical support providers in the supply chain. The demand side of this market is characterized by the rising demand for heat pump water heaters in various applications such as energy, mobility, industrial, and grid injection. The supply side is characterized by rising demand for contracts from the industrial sector and mergers & acquisitions among big players. Various primary sources from both the supply and demand sides of the market were interviewed to obtain qualitative and quantitative information. Following is the breakdown of primary respondents:
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Market Size Estimation
Both top-down and bottom-up approaches were used to estimate and validate the total size of the heat pump water heater market. 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 share has been determined through primary and secondary research.
- The industry’s value chain and market size, in terms of value, have been determined through both primary and secondary research processes.
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources.
Heat pump water heater market Size: Top-Down Approach
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Heat pump water heater market Size: Bottom-Up Approach
Data Triangulation
After arriving at the overall market size from the above estimation process, the total market has been split into several segments and subsegments. Data triangulation and market breakdown processes have been employed to complete the overall market engineering process and arrive at the exact statistics for all the segments and sub-segments, wherever applicable. The data has been triangulated by studying various factors and trends from both the demand- and supply sides. Along with this, the market has been validated using both the top-down and bottom-up approaches.
Market Definition
A heat pump water heater (HPWH) is a type of water heater that uses a heat pump to efficiently heat water. Unlike traditional water heaters that generate heat directly, such as electric or gas water heaters, a heat pump water heater moves heat from the surrounding air or ground to heat the water.
The market for heat pump water heaters is defined as the sum of revenues generated by global companies from the sale of heat pump water heaters. Two different types of heat pump water heaters are available—geothermal heat pump water heaters and air source heat pump water heaters. These heaters are available with different rated capacities, including up to 10 kW, 10–20 kW, 20–30 kW, 30–100 kW, 100–150 kW, and above 150 kW. These devices come with different storage tank capacities, namely, up to 500 liters, 500–1,000 liters, and above 1,000 liters. Heat pump water heaters are used by residential, commercial, and industrial end users. The regions considered for this market study include North America, Europe, Asia Pacific, and South America.
Key Stakeholders
- Companies manufacturing heat pump water heaters
- T&D utilities
- Industrial end users
- Commercial end users
- Power and energy associations
- Government and research organizations
- Manufacturers of heat pump water heater components
- Distributors and suppliers of heat pump water heaters
- Heating, ventilation, and air conditioning (HVAC) industry and environmental associations
- National and local government organizations
- Technology standard organizations, forums, alliances, and associations
- Heat pump water heater associations
- Heat pump water heater survey companies
Objectives of the Study
- To define, describe, segment, and forecast the heat pump water heater market on the basis of type, rated capacity, refrigerant type, storage tank capacity, end user, and region in terms of value.
- To forecast the global heat pump water heater market in terms of volume.
- To describe and forecast the market for five key regions: North America, Europe, Asia Pacific, South America, and Middle East & Africa, along with their country-level market sizes in terms of value.
- To provide detailed information regarding key drivers, restraints, opportunities, and challenges influencing the growth of the market.
- To strategically analyze the micromarkets1 with respect to individual growth trends, prospects, and contributions to the overall market size
- To provide the supply chain analysis, trends/disruptions impacting the customer’s business, market map, pricing analysis, and regulatory analysis of the heat pump water heater.
- To analyze opportunities for stakeholders in the heat pump water heater and draw a competitive landscape of the market.
- To strategically analyze the ecosystem, tariffs and regulations, patent landscape, trade landscape, Porter’s five forces, and case studies pertaining to the market under study.
- To benchmark market players using the company evaluation quadrant, which analyzes market players on broad categories of business and product strategies adopted by them.
- To compare key market players with respect to the product specifications and applications.
- To strategically profile key players and comprehensively analyze their market rankings and core competencies.
- To analyze competitive developments, such as contracts & agreements, investments & expansions, mergers & acquisitions, new product launches, partnerships, joint ventures & collaborations, in the heat pump water heater.
Available Customizations:
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Product Analysis
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Company Information
- Detailed analyses and profiling of additional market players
Growth opportunities and latent adjacency in Heat Pump Water Heater Market