Europe Heat Pump Market Size - By Product (Air Source, Ground Source, Water Source), By Application (Residential, Commercial), Country Outlook & Growth Forecast, 2024 – 2032

Europe Heat Pump Market Size

Europe Heat Pump Market was valued at USD 16.5 billion in 2023 and is estimated to grow at 19.2% CAGR from 2024 to 2032. Favourable government policies & incentives along with energy efficiency requirements are the major drivers for the market growth. Governments are setting higher minimum energy performance standards for heating systems, pushing for the replacement of traditional fossil fuel-based heating systems with more efficient and environmentally friendly alternatives like heat pumps.
 

Several European governments are actively promoting the adoption of heat pumps by offering financial incentives like subsidies and grants. These initiatives aim to lower the initial investment for both residential and commercial users, thereby enhancing the economic feasibility of heat pump systems. Notably, Germany stands out, providing substantial subsidies through its Market Incentive Program (MAP) specifically designed for renewable energies, including heat pumps. For instance, a homeowner in Berlin can receive up to 35% of the installation costs covered by these subsidies, significantly reducing the financial burden.
 

Europe Heat Pump Market Trends

The European Union has established stringent regulations aimed at reducing carbon emissions and promoting renewable energy sources. Directives such as the Renewable Energy Directive (RED) and the Energy Performance of Buildings Directive (EPBD) mandate member states to improve the energy efficiency of buildings and increase the use of renewable energy, which directly benefits the heat pump market. These regulations often require new buildings to incorporate energy-efficient heating solutions, driving the adoption of heat pumps.
 

Various European governments have implemented financial incentives such as subsidies and grants to encourage the adoption of heat pumps. These incentives reduce the upfront costs for homeowners and businesses, making heat pump systems more financially viable. For example, Germany offers significant subsidies under its Market Incentive Program (MAP) for renewable energies, which includes heat pumps.
 

Europe Heat Pump Market Analysis

Based on product, the air source heat pump market is anticipated to surpass USD 80 billion by 2032. Increased awareness of the benefits of renewable heating solutions, combined with rising energy prices and environmental concerns, is driving demand for air source heat pumps. ASHPs are particularly popular in residential settings due to their ease of installation and ability to provide both heating and cooling.
 

Based on application, the Europe residential heat pump market will showcase about 19% CAGR through 2032. Heat pumps significantly reduce household energy consumption, leading to lower utility bills. For instance, air source heat pumps can achieve efficiencies of 300-400%, meaning they produce three to four units of heat for every unit of electricity consumed. This efficiency translates to substantial cost savings over time making heat pumps an attractive investment for homeowners.
 

Germany heat pump industry is anticipated to exceed over USD 27.5 billion by 2032. Increased public awareness of environmental issues and a growing commitment to sustainability among consumers are driving demand for eco-friendly heating solutions in Germany. Heat pumps, known for their efficiency and lower environmental impact, are gaining popularity as consumers seek to reduce their carbon footprints. This societal shift towards sustainability is a key driver for the heat pump market's growth.
 

In addition, the integration of smart technologies and the Internet of Things (IoT) is revolutionizing the heat pump market in the country. Smart heat pumps are connected to home automation systems, allowing users to control and monitor their heating systems remotely.
 

Europe Heat Pump Market Share

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Carrier, Finn Geotherm UK Limited, NIBE Industrier AB, Trane Technologies International Limited, Vaillant Group, Viessmann are among the dominant players in the Europe heat pump industry. These companies are focusing on innovation, strategic partnerships, and investments in new transmission projects to maintain their competitive edge in the market.
 

Europe Heat Pump Market Companies

Major key players operating across the Europe heat pump industry are:

• Aira
• Bosch Thermotechnology Corp.
• Carrier
• Daikin
• Finn Geotherm UK Limited
• FUJITSU GENERAL
• Glen Dimplex Group
• GREE ELECTRIC APPLIANCES, INC.
• Kensa Heat Pumps
• LG Electronics
• Mitsubishi Electric Corporation
• NIBE Industrier AB
• Panasonic Marketing Europe GmbH
• SAMSUNG
• STIEBEL ELTRON GmbH & Co. KG
• Swegon Group AB
• Systemair AB
• TOSHIBA EMEA
• Trane Technologies International Limited
• Vaillant Group
• Viessmann
• WOLF GmbH
   

Europe Heat Pump Industry News

• In March 2024, the European Commission has approved a USD 1.1 billion Italian initiative aimed at supporting investments in the production of equipment essential for advancing the transition to a net-zero economy, in accordance with the Green Deal Industrial Plan. This is anticipated to increase the demand for energy efficient heat pump in the country, thereby contributing to the market growth.
   
• In January 2024, Aira has raised over USD 158 million in a Series B financing round, led by Swedish institutional investors Altor and Kinnevik, along with Singaporean investment fund Temasek. In addition, the company has secured a USD 15 million grant from the Polish government to establish a heat pump manufacturing facility in Wroclaw, Poland, aimed at serving the residential market, which in turn will contribute to the overall market growth.
   

This Europe heat pump market research report includes an in–depth coverage of the industry with estimates & forecast in terms of volume ‘000 Units’ and revenue in ‘USD Million’ from 2021 to 2032, for the following segments:

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Market, By Product

• Air Source
  • Residential
  • Commercial
• Ground Source
  • Residential
  • Commercial
• Water Source
  • Residential
  • Commercial

Market, By Application

• Residential
• Commercial

The above information has been provided for the following countries:

• Austria
• Norway
• Denmark
• Finland
• France
• Germany
• Italy
• Switzerland
• Spain
• Sweden
• UK
• Netherlands