North America Residential Heat Pump Market Size - By Product (Air Source, Ground Source, Water Source), By Application (Single Family, Multi Family) & Forecast, 2023 - 2032

North America Residential Heat Pump Market Size

North America Residential Heat Pump Market size was values at USD 7.3 billion in 2022 and is projected to grow at a rate of over 9% between 2023 and 2032. Ongoing initiatives to reduce carbon emissions have led to a growing demand for energy-efficient space heating and cooling solutions, which is set to drive the market expansion. The global market for residential heat pumps is expected to cross USD 121.5 billion by 2032.

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In addition, diverse climatic conditions, shifting trends towards more environmentally sustainable practices and significant R&D investments will create favorable opportunities for the enhancement of heat pump systems in domestic infrastructures. In addition, growing adoption of renewable energy systems, implementation of stringent regulations on emissions, and the introduction of new & enhanced technologies to reduce the severe environmental impact will positively sway the industry outlook.

The residential heat pump market in the region has witnessed a significant growth owing to the rapidly increasing population along with the continuous establishment of residential infrastructure. The introduction of government schemes including rebates, tax credits for both corporations and individuals, incentive plans, and programs for clean heating and will influence the industry dynamics.

For instance, the U.S. government has implemented new regulations starting in 2023, the Energy Efficient Home Improvement Credit Scheme. Under the scheme, the previous lifetime limit of USD 500 for tax credits has been replaced with an annual limit of USD 1,200. The tax credit will now be calculated as 30% of the costs incurred for eligible home improvements conducted within the year. Moreover, continuous technological advancements coupled with shifting consumer focus toward enhanced technological systems will further augment the industry growth.

COVID- 19 Impact

The sudden outbreak of the COVID -19 pandemic has significantly impacted the economic structures across various emerging and developed countries across the globe. Stern lockdown protocols by the respective administrations, limited cross-border trade movements, shortages of raw materials from lower-tier suppliers, limited operations, and disruptions in the logistics networks, are some of the key parameters impacting the growth prospects of the overall heat pump industry.

However, as lockdown measures are gradually lifted to stimulate economic revival, the industry is anticipated to exhibit significant growth during the forecast period. Moreover, the residential sector is projected to witness a substantial expansion on account of the increasing need for efficient & reliable heating solutions, shifted focus on indoor comfort, positive uptake of sustainable heating and cooling solutions.

North America Residential Heat Pump Market Trends

Favorable regulatory support in response to the ongoing energy crisis along with rising demand for energy efficient systems will boost the regional industry demand. Respective governments are making significant investments to support the adoption of non-fossil fuel-based heating and cooling systems unveiling new potential for product deployment across different verticals.

For instance, in February 2022, the U.S. EPA introduced the ENERGY STAR Home Upgrade Initiative, aimed at accelerating the transition to clean energy in American households. Moreover, state and federal authorities are also offering a wide range of financial incentives including subsidies, tax rebates, and low interest loans to promote the adoption of energy-efficient systems in residential establishments which will further proliferate the industry outlook.

North America Residential Heat Pump Product Market Analysis

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The North America residential heat pump market from air source heat pump products will observe a growth rate of over 10% through 2032, on account of various positive factors consisting of low carbon footprint, minimal maintenance requirements, cost-effective operations, longer lifespan and introduction of beneficial installation schemes driving the adoption of these units.

For instance, from January 2023, the U.S. government unveiled that users integrating a new air-source heat pump for domestic establishments and meet specific efficiency criteria are qualified to attain a federal tax credit. This tax credit can amount to a maximum of USD 2,000 or 30% of the installation cost, whichever is lower, reducing the overall initial cost for ASHP units. Moreover, the ability to these systems provide water heating solutions in addition to space heating and cooling will boost the product demand.

The demand for ground source or geothermal heat pumps in North America will be driven by their high efficiency, environmentally friendly operations, and minimal maintenance requirements. Ongoing technological advancements aimed at enhancing efficiency and operational performance will further complement the business dynamics. Moreover, several operational benefits including incorporation of integrated controls, ultra-high energy efficiency, and enhanced maintenance to provide efficient heating solutions for residential establishments is set to augment the product demand.

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Single-family application accounted for over 65% of the North America residential heat pump market share in 2022, driven by the expanding construction activities in the U.S. and Canada. Government initiatives and financial incentives supporting the installation of renewable systems have also played a significant role in boosting the demand for heat pumps in single-family households. Moreover, cost-effectiveness, ongoing retrofitting operations, rising disposable incomes among customers, and easy installation process are some of the key parameters fostering the business landscape.

The multi-family residential heat pump market is poised for growth owing to increased investments in infrastructure along with the growing need for efficient space and water heating solutions. The ability of these units to offer reliability and flexibility and benefit from the high sustainability index of these units which is set to have a positive impact on the overall industry growth. In addition, the variations in climatic conditions caused by global warming along with the government targets to reduce emissions will drive significant demand for effective and sustainable heating and cooling solutions across the region.

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The U.S. residential heat pump market size across residential establishments was reached USD 7 billion in 2022, attributed to promising regulatory frameworks and the rising demand for renewable energy technologies. In addition, supportive policies for energy-efficient systems and the implementation of standards, incentives, and beneficial schemes will favor the industry outlook. The market size for heat pump in the U.S. is set to cross USD 29.5 billion by 2032.

For instance, the U.S. Department of Energy has enforced new energy conservation standards that will be effective from January 1, 2023, for newly manufactured residential & commercial air conditioners, heat pumps, and gas furnaces. These standards have been implemented to promote energy efficiency and reduce energy consumption in these HVAC systems. Moreover, the rising demand for efficient and reliable heating and cooling solutions along with the shifting inclination toward reliable heating & cooling systems will further complement the industry landscape. The market size for heat pump in the Europe is poised to exceed USD 78 billion by 2032.

North America Residential Heat Pump Industry Leaders

Leading companies across the North America residential heat pump market consist of:

•  Carrier
• Daikin
• SAMSUNG HVAC
• LG Electronics U.S.A., Inc.
• Panasonic Corporation of North America
• Bosch Thermotechnology Corp.
• WaterFurnace
• ClimateMaster, Inc.
• Nordic Heat Pumps
• Lennox International Inc.
• Rheem Manufacturing Company
• Trane, Bard HVAC
• Aermec
• American Standard Heating
• Air Conditioning.

Manufacturers operating across the North America residential heat pump market are focusing on implementation of strategic partnerships, agreements, contracts, acquisitions, and the introduction of new product innovations to gain a competitive edge over the others.
 

North America Residential Heat Pump Market Share

• In April 2023, Rheem Manufacturing Company has been recognized for its outstanding performance in the Residential Cold Climate Heat Pump Technology Challenge, conducted by the U.S. Department of Energy (DOE). This challenge focus on evaluating the operational characteristics of the residential, centrally ducted, electric heat pumps in the extreme climate conditions of the northern U.S. and Canada, where temperatures can reach sub-zero levels. Following rigorous testing, the company’s residential heat pump demonstrated exceptional results in the challenge, leading to recognition from the DOE.
   
• In April 2023, LG Electronics announced its strategic initiative to set up a new manufacturing facility in the U.S. dedicated to the production of domestic heat pumps. The company introduced this plan during a White House executive roundtable conference on heat pump manufacturing and deployment. LG intends to utilize its training academies located throughout the nation to educate and provide additional training initiatives and the government support to assist in addressing this shortage. This expansion will further enhance the company’s market position in the North America residential heat pump industry.
   

This North America Residential 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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Market, By Product

• Air Source
• Ground Source
• Water Source

Market, By Application

• Single Family
• Multi Family

The above information has been provided for the following countries:

• U.S.
• Canada