The global residential heat pump products market was valued at USD 18.8 billion in 2021 and is projected to expand at a CAGR of 6.1% from 2022 to 2030. The rising demand for energy-efficient appliances is driving the growth of the residential heat pump products market. Heat pumps are used for both cooling and heating applications in residential buildings and offer a wide range of advantages over traditional heating systems, such as reduced energy costs and improved air quality. Moreover, governments in several countries are introducing incentives and subsidies to encourage the adoption of heat pumps and other energy-efficient appliances.

The development of residential heat pump products is driven by the growing use of advanced technology, such as inverter technology, which helps in more efficient usage of energy, reducing the cost of ownership. These systems are designed to run at variable speeds and hence deliver more efficient performance than the traditional systems and are therefore preferred by the consumers. Furthermore, many companies are introducing innovative and advanced products that are more efficient and cost-effective. For instance, in November 2021, Mitsubishi Electric launched a range of advanced residential heat pumps with an inverter technology to deliver best-in-class efficiency.

The increasing trend of green buildings is also boosting the market growth. Heat pumps are considered one of the essential components of green buildings, as they are energy-efficient and can help in reducing greenhouse gas emissions. Moreover, governments in several countries are introducing regulations and standards for green buildings, which is further driving the demand for residential heat pump products.

The increasing awareness about the health benefits of heat pump products is also propelling the growth of the market. Heat pump technology helps to reduce the amount of allergens, pollutants, and other contaminants in the air, making it safer and healthier for residential buildings. Furthermore, the increasing disposable income of people is also driving the demand for residential heat pumps, as they are more expensive than traditional heating systems. In addition, the increasing popularity of smart homes is creating huge opportunities for heat pump manufacturers, as these systems can be easily integrated with smart home systems.

The air-source heat pumps segment accounted for the largest market share of around 39.0% in 2020. Air-source heat pumps are used in residential buildings and offer a cost-effective solution to reduce energy bills. The air-source heat pumps are also beneficial in providing both heating and cooling functions at the same time. Furthermore, the growing demand for green energy, rising consumer awareness of energy efficiency, and increased government incentives and subsidies are some of the key factors driving the growth of the residential air-source heat pumps segment.

The ground-source heat pumps segment is projected to expand at the fastest CAGR of around 7.5% from 2021 to 2027. Ground-source heat pumps are an energy efficient, cost-effective, and environment-friendly option for heating and cooling buildings. These heat pumps are proven to reduce energy bills by up to 50%. Furthermore, ground-source heat pumps also have the added benefit of being able to generate renewable energy. Increasing consumer awareness about the benefits of ground-source heat pumps is driving the market growth revenue.

The retail stores segment is expected to hold the largest share in the residential heat pump products market in 2022. Retail outlets, such as home improvement stores, are the most preferred channels for residential heat pump products. The growth of retail stores is attributed to the availability of a wide range of manufacturers, their brands, and their various models of residential heat pumps. Moreover, customers can compare various residential heat pump products at retail outlets and make an informed decision about the selection of the product.

The online channel is expected to witness the fastest growth over the forecast period. The growing use of the internet and increasing access to broadband in developing countries are the major factors driving the growth of the online channel. Companies are using digital marketing platforms, such as social media, emails, websites, and search engines, to advertise their products and reach a large customer base. In addition, customers can compare prices and features of different residential heat pumps on various e-commerce sites and can purchase the product of their choice.

The air-source heat pump segment accounted for the largest revenue share of 67.0% in the year 2022. The increasing demand for energy-efficient and cost-effective cooling and heating solutions is driving the growth of the market. The rise in disposable income and the increasing focus of homebuyers on energy-efficient homes are further boosting the market growth. In addition, the growing awareness regarding the use of renewable energy sources and the increasing focus on energy-saving is also driving the growth of the market.

The geothermal heat pump segment is anticipated to register the highest CAGR of 15.3% over the forecast period. The increasing number of initiatives taken by governments to promote the adoption of geothermal heat pump systems is contributing to the growth of this segment. For instance, in 2020, the U.S. government announced the Geothermal Heat Pump Manufacturing Tax Credit, which is expected to provide tax credits for 30% of the cost of installing geothermal heat pumps. Furthermore, the rising demand for geothermal heat pumps in commercial buildings is also driving the growth of this segment.

Europe is expected to witness the fastest growth in the coming years. This is mainly due to the increasing awareness regarding the cost-effectiveness and efficiency of these systems. Additionally, governments in the region are also taking initiatives to promote the installation of these systems in residential buildings. For instance, in June 2021, the French government launched the Heat Pump Initiative, which provides funding for the installation of heat pumps.

Asia Pacific is expected to be the second-fastest growing regional market. An increase in disposable incomes, coupled with government initiatives to promote energy-efficient residential systems, is expected to drive the growth of the market in the region. For instance, in May 2021, the government of India announced a grant of INR 5,600 crores for the development of energy-efficient building systems in the country.

In this part of the residential heat pump products business plan we will provide a detailed breakdown of all income and expense categories of the business. These forecasts include cash flow projections and capital requirements for your residential heat pump products business. Usually, these projections are drafted for a 5-year period.

Revenue Assumptions
The main source of revenues for a residential heat pump products business comes from sales of residential heat pump products, installation and maintenance services, and other related services. Here you will find a list with a description of each of them and other possible sources of profit such as advertising, training, and sales of parts and accessories.

Projecting Expenses
In this section, all the regular expenses related to keeping the residential heat pump products business running will be described. The list of operating expenses includes wages, maintenance and repairs, utilities, insurance policies, advertising, and others. Additionally, you will need to factor in investments in new equipment, inventory, and other capital expenditures.

Some of the key companies operating in the residential heat pump market are increasingly focusing on product launches and expansion of the distribution channel to gain prominent visibility among consumers. Some of the initiatives are:

– In August 2022, Carrier launched a new range of residential heat pumps with an improved efficiency rating of up to 25 SEER.

– In October 2022, Daikin launched a range of ultra-efficient heat pumps with a Coefficient of Performance (COP) rating of up to 6.0.

– In November 2022, Mitsubishi launched a range of heat pumps with an improved energy efficiency rating of up to 27 SEER.

Some of the prominent players in the residential heat pump market include:

– Carrier Corporation
– Daikin Industries, Ltd.
– Mitsubishi Electric Corporation
– Trane Technologies plc
– Lennox International, Inc.
– LG Electronics
– Johnson Controls International plc
– Bosch Thermotechnology
– Ingersoll-Rand plc
– Fujitsu General Limited

This report forecasts growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global residential heat pump products market based on product type, application, end-use, and region:

1. Product Type Outlook (Revenue, USD Million, 2017 – 2030)

– Air-Source Heat Pumps
– Geothermal Heat Pumps
– Hybrid Heat Pumps

2. Application Outlook (Revenue, USD Million, 2017 – 2030)

– Heating
– Cooling

3. End-Use Outlook (Revenue, USD Million, 2017 – 2030)

– Residential
– Commercial

4. Regional Outlook (Revenue, USD Million, 2017 – 2030)

– North America
– Europe
– Asia Pacific
– Central & South America
– Middle East & Africa

[Q]: What is Driving Market Growth of Residential Heat Pumps?
[A]: The rising demand for energy efficient and eco-friendly heating systems from the residential sector is driving the growth of the residential heat pump market. Governments in developed countries are providing incentives and subsidies to promote the use of heat pumps as they are considered as an energy-efficient and renewable energy source. Additionally, technological advancements in heat pump systems such as inverter-driven components and higher energy efficiency ratings are also driving the growth of the market.

[Q]: Who are the Key Players in the Residential Heat Pump Market?
[A]: Some of the key players in the residential heat pump market include Daikin Industries Ltd., Johnson Controls Inc., Mitsubishi Electric Corporation, NIBE Group, Carrier Corporation, Danfoss A/S, and Gree Electric Appliances Inc.

[Q]: What are the factors restraining the residential heat pump market?
[A]: The high installation cost of heat pumps and the availability of cheaper alternatives like boilers and electric heaters is expected to restrain the market growth. Moreover, the need for regular maintenance and the lack of consumer awareness are also acting as a restraint to the residential heat pump market.

[Q]: Which Region Offers the Largest Opportunity for Sales of Residential Heat Pumps?
[A]: Asia Pacific is expected to be the largest and fastest growing market due to the increasing awareness of energy efficient solutions, increasing disposable income, and improving living standards in the region. The presence of major residential heat pump manufacturers in the region further supports the growth of the market.