According to the latest market research study published by P&S Intelligence, the global heat pump water heater market is experiencing rapid expansion, with revenues reaching USD 5.73 billion in 2024 and a projected compound annual growth rate (CAGR) of 12.66% from 2025 to 2032, reaching USD 14.74 billion by 2032. This impressive growth is driven by a combination of rising electricity costs and increased demand for energy-efficient heating solutions. As traditional electric water heaters become less economical, heat pump systems—offering approximately 70% energy savings—are gaining widespread traction.
Supportive government frameworks, including certificates,
rebates, and regulations encouraging energy-efficient systems, are further
accelerating the adoption. Technological advancements like improved compressor
designs, better insulation, and real‑time IoT integration are boosting
reliability and efficiency, making these products increasingly attractive to
both residential and commercial buyers.
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Key Insights
- The air‑to‑water
type dominated with a 45% share in 2024, due to superior efficiency and
broad climatic suitability; meanwhile, hybrid systems are set to grow
fastest (CAGR ~9.6%) .
- Refrigerant-wise,
R410A led the market in 2024 with a 43% share, while R744 (CO₂) systems
are gaining momentum (CAGR ~8.7%) thanks to higher safety and performance.
- Residential
end users held approximately 55% market share in 2024, propelled by
government incentives, emission concerns, and energy cost savings; the commercial
segment is rising fastest (~9.1% CAGR) due to demand from hotels,
hospitals, and LEED-driven projects.
- In
terms of tank capacity, units with 500–1 000 L accounted for a 45% share,
while large-capacity tanks (> 1 000 L) are the fastest-growing segment
(~8.3% CAGR), meeting needs for uninterrupted hot water supply.
- Geographically,
the Asia-Pacific region was the largest in 2024 (~35% share), led by
manufacturers like LG and Panasonic and strengthened by supportive
policies and urbanization. Europe is the fastest-growing region (~7.7%
CAGR), stimulated by F‑Gas regulations and high energy prices.
- Major
industry players include Panasonic, Hitachi, Johnson Controls, Daikin,
Rheem, A.O. Smith, Bosch, Viessmann, Mitsubishi, LG, and Midea, competing
heavily on innovation, energy efficiency, and green credentials.
- IoT
integration is emerging as a critical trend—smart water heaters enable
remote monitoring, predictive maintenance, and energy analytics, which
elevate system performance and user satisfaction.
- Persistent high upfront costs and installation complexities remain challenges, particularly for smaller homes; however, improved ROI from reduced operating costs and policy support is mitigating these barriers.
- Notable recent developments: In February 2024, Havells India launched a 3.5 kW air‑to‑water heat pump model designed for homes; in January 2024, LG showcased new HVAC solutions, and in November 2023, Bosch announced a €100 million investment in Portuguese heat pump plants.
