The global residential heat pump market is expected to grow from 7.59 million units in 2024 to 17 million units by 2035, driven by an 8.5% CAGR. However, growth has slowed due to economic and policy uncertainty, high electricity taxes, and policy inconsistencies. Manufacturers are focusing on cost optimization, efficiency improvements, and local production to reduce costs. New entrants are introducing smaller, more affordable heat pumps, and companies are investing in research and development to enhance efficiency and performance. Service-based models like Heat-as-a-Service (HaaS) are gaining traction, reducing upfront costs and making heat pump adoption more accessible. To overcome barriers, manufacturers are scaling up production, converting facilities, and building new ones. Frost & Sullivan analyst Neha Tatikota notes that political factors will shape the industry, and clear policies and regulations are crucial to drive growth and revitalize investment. The industry is worried about the impact of policy uncertainty on subsidies, highlighting the need for supportive regulations to drive growth and achieve decarbonization targets.
Despite rapid growth, the heat pump boom faces significant hurdles, underscoring the need for robust policy backing.
