North America Air to Water Heat Pump Market Size & Share 2026-2035

North America Air to Water Heat Pump Market Size

The North America air to water heat pump market was valued at USD 1.6 billion in 2025 and is estimated to grow from USD 1.9 billion in 2026 to USD 7.5 billion by 2035, at a CAGR of 16.1%, according to a recent study by Global Market Insights Inc.

• Higher level of awareness concerning energy savings and sustainability have contributed to fostering a market that is aimed at reducing emissions during operations while at the same time ensuring proper levels of comfort. The increase in performance of the systems and their ability to operate in cold conditions has boosted end user confidence in the technology.

• Growing interest as a result of increasing demand from building owners as well as from policy makers to seek for energy efficient alternatives to conventional systems in order to produce both heat and hot water by using one integrated unit fits the trend in this region towards electrification and less use of fossil fuels. New paradigm driving future growth.

• The homeowners make use of such systems for space heating, floor heating and hot water production in new buildings as well as in retrofits with high efficiency through integration with radiant heating systems. Moreover, increased deployment of renewable energy technologies, stringent emission norms, and technological advances to reduce ecological effects will prove beneficial for this industry.

• The continuous development in the technology of heat pumps, together with the rising consumer demand for effective heating and cooling units, will be key factors for industry expansion. The rising need for eco-friendly heating and cooling options, as well as efficient DHW solutions that meet the objective of lowering carbon footprints, will be beneficial in enhancing the business environment

• For instance, Mitsubishi Electric Trane HVAC US released a new series of Ecodan single-phase ATW heat pumps for operating in both domestic hot water and hydronic heating/cooling applications in March 2026. The new product provides efficient performance with a quiet, space-saving, green, and smart approach that can easily cater to the diverse needs of the American customers.

• There has been an increase in the demand for energy-efficient heating, cooling, and hot water systems due to reduced carbon emission activities in recent years, which is leading to an upsurge in the  air to water heat pump market. Favorable factors including diversified weather patterns, adoption of sustainable practices, rapid growth in R&D, and technological advancements in heat pumps for residential areas are boosting market expansion.

• The U.S. air-to-water heat pump industry is projected to observe substantial application on account of the growing demand for energy-efficient solutions and the increasing government regulations that support sustainability. The local & federal authorities offer incentives and rebates further accelerating the adoption rates, and technological advancements improve the efficiency and cost-effectiveness of the systems. Moreover, the growing urbanization and infrastructure development, as well as the increasing awareness and desire to reduce greenhouse gas emissions, are driving the need for efficient heating and cooling solutions for residential and commercial establishments.

• For example, in November 2024, the U.S. Department of Energy has allocated USD 169 million to speed up the production of heat pumps in the U.S. through the Investing in America Program initiated by the Biden-Harris Administration. The amount will be used to fund nine projects at 15 locations across the country to boost the production of electric heat pumps.

North America Air to Water Heat Pump Market Trends

• The North America air to water heat pump industry has experienced significant growth owing to the increasing population and continuous development of residential and commercial infrastructure. The presence of favorable government initiatives, such as tax credits and rebates for corporations and individuals, along with incentive plans and clean heating programs, will positively influence the industry dynamics.

• The increase in the adoption of such systems by commercial players has created a need for prioritizing low maintenance costs, along with ensuring conformance to energy efficiency standards. Heat pumps used in office buildings, schools, hospitals, and hotels have made them popular among commercial consumers.

• For example, as of May 2024, Daikin has committed to promoting the adoption of heat pumps in California by outlining five core pledges, all focused on achieving the goal of having six million heat pumps in place across California by 2030. As part of this commitment, Daikin aims to manufacture one million heat pumps. This pledge reflects the company’s position as a market leader in HVAC systems and is expected to contribute to the development of innovative heating and cooling technologies in households.

• The presence of governmental regulations that promote the use of heat pumps as a method of electrifying space heating and water heating makes it easier for the region to embrace the adoption of air-to-water heat pumps. Integrating them with underfloor heating systems, new generation radiators, and thermal storage technology increases their application versatility.

• For example, in August 2025, the U.S. Department of Energy announced progress in meeting federal requirements to lower emissions from new and renovated federal buildings under the Clean Energy Rule. It is a policy that aims at lowering pollution, clean air, and lower energy bills by using efficient technology. This is also part of the federal goal to ensure that all government buildings are carbon neutral by 2045.

North America Air to Water Heat Pumps Market Analysis

• Based on application, the North America air to water heat pump market is divided into residential and commercial. The residential application segment revenue was evaluated at USD 1.3 billion in 2025.

• The residential segment is forecasted to record a growth rate of 16.2% CAGR by 2035. Growing inclination of customers toward energy-saving and environmentally friendly heating systems has contributed to the growth of this segment along with favorable government subsidies and technology development. Moreover, the need to comply with strict regulations on energy efficiency and the threat of global warming would also drive the growth of air-to-water heat pump installations in the future.

• For instance, in January 2025, Carrier unveiled a new lineup of residential and light commercial air-to-water heat pumps available in size from 4 to 14 kW. The systems use propane as the refrigerant, to provide very high efficiency performance with a coefficient of performance (COP) or up to 4.90 & leaving water temperatures up to 167 degrees Fahrenheit which are considered ideal for modern heating needs.

• The commercial application segment market revenue is projected to surpass USD 2.2 billion by 2035. The demand for commercial air-to-water heat pumps is further accelerated by an increase in construction activity in both small and large commercial establishments including retail malls, offices, and hospitality infrastructure. The adoption of efficient and flexible heating and cooling solutions is being fueled by the strict government regulations and green building initiatives that focus on lowering carbon emissions, thus influencing business dynamics.

• For instance, the Johnson Control company has expanded its heat pump portfolio in Canada by introducing the YORK YMAE 575 V air-to-water heat pump unit in April 2024. This advanced product incorporates inverter scroll technology and meets the requirements of Canadian regulations in terms of safety standards regarding the pressure level of equipment. The product is versatile and can be easily integrated with 2-pipe and 4-pipe systems and can supply water at 60°C in temperature. The product employs the environmentally friendly refrigerant R-454B.

• The U.S. air-to-water heat pump market stood at around USD 1.6 billion in 2025. The growing inclination towards the use of more eco-friendly solutions for heating and cooling facilities in line with the energy requirements and policies and programs promoting the use of environmentally friendly products is influencing the industry performance. Besides, constant renovation and retrofitting of buildings in line with energy requirements of the building codes are positively affecting industry performance.

• For example, in January 2026, the Heat Pump Accelerator project worth USD 450 million, launched by five states in New England, was initiated. The project's goal is to promote the use of heat pumps in homes and is to be financed through the federal Climate Pollution Reduction Grants. The project will help lower the cost of equipment, train contractors, provide resources for installation and aims to increase the use of heat pumps in the next decade.

• Canada air to water heat pump market is expected to grow over CAGR of 17.5% by 2035. Increasing awareness regarding energy efficiency and the need to cut down on dependence on traditional fossil fuel-based heating systems have driven the demand for air to water heat pumps. Initiatives by the government and various policies aimed at increasing building electrification and improving energy efficiency have helped shape the business environment.

• In March 2025, as per the statement by officials of the government, there has been an agreement between Canada and Yukon to offer USD 6.3 million as financial assistance to citizens for adapting to smart electric heating technologies, thereby resuming their affordable heat pump program. It has been reported that the government of Canada will invest USD 4.3 million while Yukon will contribute over USD 2 million.

North America Air to Water Heat Pump Market Share

• The Carrier brand holds a large market share within the North American air-to-water heat pump market, implying that it has a dominant market position and leads the industry. The company has made significant innovations by introducing new products in order to address the increasing need for energy-efficient heating devices. It is due to the innovative nature of the products and services offered by Carrier that it leads the market.

• For instance, in February 2025, Carrier launched its domestic hot water ATW heat pump product at the International Builders’ Show, marking the launch of an integrated solution in the North American market. The integrated solution brings together the functions of a heater, a cooler, and a hot water supplier into one product, providing a sustainable solution for its customers.

North America Air to Water Heat Pump Market Companies

Major players operating across the North America air to water heat pump industry are:

• Arctic Heat Pumps

• Blue Star

• Bosch Thermotechnology

• Carrier

• Chiltrix

• Daikin Comfort Technologies North America

• General

• Gree Canada

• Hydro Solar Innovative Energy

• Jetson

• Johnson Controls

• LG Electronics

• Lochinvar

• Nordic Heat Pumps

• Raypak

• Samsung

• SpacePak

• Swegon North America

• Trane

• U.S. Boiler Company

North America Air to Water Heat Pump Industry News

• In January 2026, Maritime Geothermal received significant government funding from the government to increase their production capacity and meet the growing demand for Canadian-made sustainable heating and cooling solutions. This further enhances the Canadian HVAC industry’s supply chain by allowing for the higher production of NORDIC® geothermal and air-to-water heat pumps. This will also help the construction sector achieve its national objectives of adopting efficient and low-carbon building solutions.

• In December 2025, Daikin announced to invest around USD 163 million to establish an advanced 71,000-square-foot R&D test lab by 2027 at Plymouth, Minnesota, U.S. The company aims to boost its HVAC innovations primarily for data center cooling operations, thereby complementing advancements in its heat pump and conventional cooling segments.

• In July 2025, Swegon North America launched two state-of-the-art air-source heat pump products in the market: the Tetris reversible air-to-water model and the Omicron 4-Pipe multifunction heat recovery system with hydronic configurations. These products offer combined, high-efficiency climate control solutions for commercial offices, healthcare institutions, multi-family residential buildings, and educational institutions.

• Carrier announced in July 2025 that Green Builder Media has honoured their Air-to-Water Heat Pump with Domestic Hot Water Solution with the Sustainable Product of the Year Award for 2025. This particular selection is because the product is technologically advanced by virtue of its refrigerant system and size, and also because of its capabilities of providing water and heating-cooling solutions.

The North America air to water heat pump market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) and volume (’000 Units) from 2022 to 2035 for the following segments:

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Market, By Application

• Residential

  • Single family

  • Multi family

  • By product

    • Domestic hot water heat pump

    • Room heat pump

• Commercial

  • Education

  • Healthcare

  • Retail

  • Logistics & transportation

  • Offices

  • Hospitality

  • Others

The above information has been provided for the following countries:

• U.S.

• Canada