North America Air to Water Heat Pump Market Size - By Application (Residential {Product [Domestic Hot Water Heat Pump, Room Heat Pump]}, Commercial {Education, Healthcare, Retail, Logistics & Transportation, Offices, Hospitality}), & Global Forecast, 2023 - 2032

North America Air to Water Heat Pump Market Size

North America Air to Water Heat Pump Market Size was valued at over USD 1.5 billion in 2022 and is anticipated to witness significant growth at a rate of over 18% by 2032. An air to water heat pump is a type of heating and cooling system that transfers heat from the outdoor air to water, which can be used for space heating, domestic hot water, and sometimes for cooling purposes.
 

It operates on the same principle as an air-source heat pump, but instead of delivering heat to the indoor air, it transfers the heat to a water-based distribution system. The increasing focus on reducing greenhouse gas (GHG) emissions and the growing preference for sustainable technologies.
 

The ongoing efforts to reduce carbon emissions have spurred a rising demand for energy-efficient heating, cooling, and hot water solutions, driving the expansion of the air to water heat pump market. Diverse climatic conditions, increasing adoption of environmentally sustainable practices, accelerating research and development investments, and advancements in residential heat pump technologies are some of the prominent factors creating favorable opportunities for industry expansion.
 

The North America air to water heat pump market has experienced significant development 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. For instance, the U.S. government's Energy Efficient Home Improvement Credit Scheme, starting in 2023, has replaced the previous lifetime limit of USD 500 for tax credits with an annual limit of USD 1,200. The tax credit is calculated as the 30% of expense incurred for eligible house improvements conducted within the year.
 

The ongoing advancements in heat pump technologies, along with a growing consumer preference for reliable heating and cooling systems. Increasing demand for energy-efficient and environmentally friendly domestic hot water (DHW), heating and cooling solutions, aligning with the goals of reducing carbon emissions and promoting sustainable practices.

COVID- 19 Impact

The COVID-19 pandemic had a profound impact on the heat pump industry, with governments enforcing lockdowns that led to a decline in product demand across various sectors. Manufacturers faced challenges such as limited operations, shortages of raw materials from lower-tier suppliers, reduced manpower availability, and disruptions in the supply chain network. The residential sector is projected to witness substantial evolution in the demand for air to water heat pumps attributed by the increasing need for efficient and reliable heating solutions, a heightened focus on indoor comfort as more people spend time at home, and a soaring hot water demand. The paradigm shift toward energy efficiency, limiting the environmental impact, along with the introduction of eco-friendly and cost-effective heating and cooling technologies.

North America Air to Water Heat Pump Market Trends

The industry is expected to experience significant progress due to favorable regulatory support in response to the ongoing energy crisis and increasing demand for energy-efficient systems. Governments in the region are actively investing in non-fossil fuel-based heating and cooling systems to reduce reliance on traditional energy sources. For instance, in February 2022, the U.S. EPA launched the ENERGY STAR Home Upgrade Initiative, focused at increasing the adoption of clean energy solutions in the American households. This initiative aims to incentivize the adoption of energy-efficient solutions and promote the use of air-source heat pumps to reduce the overall energy consumption.

The deployment of renewable heating and cooling infrastructure can come with higher operational costs, which may influence consumers to consider more affordable conventional fossil fuel-based heating systems. Despite this, governments and authorities are offering financial incentives such as subsidies and tax rebates to encourage the adoption of energy-efficient systems in residential establishments. For instance, from January 2023, the U.S. government has introduced a new federal tax credit scheme for individuals who install a new air-source heat pump in their residential properties, subject to meeting certain efficiency requirements. Under this scheme, qualifying individuals can receive a tax credit of up to a maximum of USD 2,000 or 30% of the installation cost, whichever is lower.

North America Air to Water Heat Pump Market Analysis

The residential air to water heat pump industry in North America accounted for the leading share in 2022 and is anticipated to grow owing to the increasing demand for hot water and reliable heating and cooling technologies across domestic establishments, households, and multi-story structures. The growing income levels of consumers and increasing emphasis on adoption of enhanced technological units to reduce electricity bills and limit carbon emissions, is set to drive the product adoption. In addition, the rapidly growing population along with along with the rising need for energy-efficient systems has led to increased investments in expanding and developing energy-efficient building structures.

The North America air to water heat pump market across single-family households is expected to experience substantial expansion, owing to the increasing construction activities in the U.S. and Canada. Favorable government initiatives, programs, and financial incentives focusing at promoting clean energy systems have also played a vital role in fueling the demand for heat pumps in residential establishments. In addition, cost-effectiveness, ongoing retrofitting projects, growing disposable incomes of consumers, and the ease of installation are some of the key factors contributing to the positive business landscape for heat pumps in single-family households.

The U.S. air to water heat pump market was valued at over USD 1.5 billion in 2022 attributed to favorable regulatory frameworks and an increasing demand for clean energy technologies. Supportive policies for energy-efficient systems and the implementation of standards, beneficial incentives and schemes. For instance, the U.S. Department of Energy enacted updated energy conservation standards with effective from January 1, 2023, for newly manufactured residential and commercial air conditioners, heat pumps, and gas furnaces. Moreover, the growing demand for hot water along with efficient and reliable heating and cooling solutions, coupled with a paradigm shift toward more enhanced heating and cooling systems will further enhance the U.S. heat pump industry landscape.

North America Air to Water Heat Pump Market Share

Major North America air to water heat pump market participants include:

• Trane
• Carrier
• Daikin
• Bosch Thermotechnology Ltd.
• Rheem Manufacturing Company
• Lochinvar
• FUJITSU GENERAL
• GREE ELECTRIC APPLIANCES, INC.
• Nordic Heat Pumps
• Aermec
• Arctic Heat Pumps Chiltrix Inc.
• ClimateMaster, Inc.
• NIBE Industrier AB
• Glen Dimplex Group
   

North America Air to Water Heat Pump Market News

• In April 2023, Rheem Manufacturing Company was recognized for its exceptional performance in the Residential Cold Climate Heat Pump Technology Challenge, organized by the U.S. Department of Energy (DOE). This challenge aimed to evaluate the capabilities of residential, centrally ducted, electric heat pumps under extreme climate conditions in Canada and the northern regions of the U.S., where temperatures can plummet to sub-zero levels. After undergoing rigorous testing, the company’s residential heat pump demonstrated outstanding results, earning well-deserved recognition from the DOE for its impressive performance in challenging cold climate conditions.
   
• In April 2023, LG Electronics revealed its intentions to establish a dedicated manufacturing facility in the U.S. for domestic heat pumps. This significant announcement was made during a White House executive roundtable focusing on heat pump manufacturing and deployment. As part of their commitment to addressing the heat pump shortage, the company plans to leverage its existing training academies across the country to educate and provide additional training initiatives.
   

The North America Air to Water Heat Pump market research report includes in-depth coverage of the industry with estimates & forecast in terms of “‘000 Units” and “USD Million” from 2019 to 2032, for the following segments:

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By Application, 2019 – 2032 (‘000 Units & USD Million)

• Residential
  • Single Family
  • Multi Family
  • By product
    • Domestic hot water heat pump
    • Room heat pump
• Commercial
  • Education
  • Healthcare
  • Retail
  • Logistics & Transportation
  • Offices
  • Healthcare
  • Others

The above information has been provided for the following countries:

• U.S.
• Canada