How much is the heat pump water heater market worth, and how is it expected to expand?
The heat pump water heater market size has grown strongly in recent years. It will grow from $2.45 billion in 2024 to $2.66 billion in 2025 at a compound annual growth rate (CAGR) of 8.6%. The growth in the historic period can be attributed to energy efficiency incentives, utility cost savings, environmental awareness, market penetration, building codes and standards, consumer preferences.
The heat pump water heater market size is expected to see strong growth in the next few years. It will grow to $3.6 billion in 2029 at a compound annual growth rate (CAGR) of 7.8%. The growth in the forecast period can be attributed to increasing electricity grid integration, increasing net-zero building trends, increasing market competition and innovation, increasing energy performance labeling, increasing residential and commercial retrofit programs, increasing climate resilience and adaptation. Major trends in the forecast period include shift towards energy-efficient solutions, adoption of heat pump water heaters, integration with smart home systems, growth in demand driven by government incentives, expansion of offerings with improved efficiency, increasing use in conjunction with renewable energy, development of hybrid heat pump water heaters, integration in sustainable building designs, innovation in heat pump technology.
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What are the top drivers to the rising demand in the heat pump water heater market?
The increased use of renewable energy sources is expected to propel the heat pump water heater market going forward. Renewable energy sources are forms of energy derived from natural processes that are constantly replenished. The growing public concern on climate change has led to increased demand for renewable energy and environmental protection. Heat pumps are highly energy-efficient and align with clean energy technologies by promoting sustainability and energy conservation in residential and commercial settings. For instance, in January 2024, according to the European Commission, a UK-based governing body, the European Union (EU) reached a 23.0% share of its gross final energy consumption from renewable sources in 2022, an increase of around 1.1 percentage points. Therefore, the increasing use of renewable energy sources is driving the growth of the heat pump water heater market.
How is the heat pump water heater market segmented?
The heat pump water heater market covered in this report is segmented –
1) By 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
2) By Energy Source Compatibility: Electricity, Dual-Fuel (Electric And Gas)
3) By Capacity: Traditional Heat Pump Water Heaters, Advanced Heat Pump Water Heaters
4) By Price Range: Economy Heat Pump Water Heaters, Mid-Range Heat Pump Water Heaters, Premium Heat Pump Water Heaters
5) By End-User: Residential, Commercial, Industrial
Subsegments:
1) By Air-To-Air Heat Pump Water Heater: Single-Stage Air-To-Air Heat Pump Water Heater, Two-Stage Air-To-Air Heat Pump Water Heater
2) By Air-To-Water Heat Pump Water Heater: Residential Air-To-Water Heat Pump Water Heater, Commercial Air-To-Water Heat Pump Water Heater
3) By Water Source Heat Pump Water Heater: Closed-Loop Water Source Heat Pump Water Heater, Open-Loop Water Source Heat Pump Water Heater
4) By Ground Source (Geothermal) Heat Pump Water Heater: Horizontal Ground Source Heat Pump Water Heater, Vertical Ground Source Heat Pump Water Heater
5) By Hybrid Heat Pump Water Heater: Plug-And-Play Hybrid Heat Pump Water Heater, Integrated Hybrid Heat Pump Water Heater
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Who are the top competitors in the heat pump water heater market?
Major companies operating in the heat pump water heater market are Samsung Electronics Co. Ltd., Robert Bosch GmbH, Panasonic Holdings Corporation, LG Electronics Inc., Midea Group, Haier Group Corporation, Mitsubishi Heavy Industries Ltd., Daikin Industries Ltd., Johnson Controls International plc, Carrier Global Corporation, Whirlpool Corporation, Trane Technologies Company LLC, Danfoss, A. O. Smith Corporation, Rinnai Corporation, Havells India Ltd., Ariston Thermo S.p.A, Rheem Manufacturing Company, Stiebel Eltron Inc., Vaillant Group International GmbH, V-Guard Industries Ltd., Bradford White Corporation, NORITZ Corporation, Glen Dimplex Deutschland GmbH, Bryant Heating & Cooling Systems
What significant trends should we anticipate in the heat pump water heater market over the forecast period?
Major companies operating in the heat pump water heater market are increasing their focus on developing hybrid electric heat pump water heaters to gain a competitive edge. A hybrid electric heat pump water heater is a type of water heating system that combines the technology of a heat pump with traditional electric resistance heating elements. This innovative design allows the system to operate in multiple modes, selecting the most energy-efficient option based on the surrounding conditions and demand for hot water. For instance, in September 2022, A. O. Smith Corporation, a US-based water heaters and boilers manufacturer, launched the Voltex AL (anti-leak) smart hybrid electric heat pump water heater line. The Voltex AL model is the most energy-efficient water heater, with the highest overall uniform energy factor (UEF) of 4.02 with the 66-gallon unit. It comes with iCOMM smart connectivity, allowing homeowners to control their water heaters and receive alerts and notifications through the A.O. Smith app. The Voltex AL model also features integrated leak detection, smart connectivity, and updated water connections, making it suitable for various new and retrofit applications.
Which regional trends are influencing the heat pump water heater market, and which area dominates the industry?
Asia-Pacific was the largest region in the heat pump water heater market in 2024. The regions covered in the heat pump water heater market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
What Does The Heat Pump Water Heater Market Report 2025 Offer?
The heat pump water heater market research report from The Business Research Company offers global market size, growth rate, regional shares, competitor analysis, detailed segments, trends, and opportunities.
A heat pump water heater (HPWH) is a type of water heating system that utilizes a heat pump to transfer heat from the surrounding air or ground to heat water for domestic use. These water heaters contribute to reduced electricity consumption and greenhouse gas emissions compared to traditional water heating methods.
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