North America Residential Heat Pump Market

North America Residential Heat Pump Market Size

According to a recent study by Global Market Insights Inc., the North America residential heat pump market was estimated at USD 6 billion in 2025. The market is expected to grow from USD 6.6 billion in 2026 to USD 15 billion in 2035, at a CAGR of 9.6%.

• Increasing demand for energy-efficient space heating, cooling and hot water solutions across residential establishments coupled with favorable initiatives by authorities toward adoption of heat pump systems will complement the industry landscape. Stringent emission reduction mandates by the regional government along with initiatives toward phasing out of conventional heating systems including boilers and furnaces will augment industry outlook.
  
• For instance, in February 2024, nine U.S. states signed a collaborative agreement, coordinated by NESCAUM, to accelerate heat pump adoption for HVAC and water heating. The initiative targets 65% market penetration by 2030 and 90% by 2040, promoting regional cooperation to reduce building-related emissions. Participating states include California, Colorado, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, and Rhode Island, ensuring strong policy support for electrification.
  
• Introduction of beneficial schemes by the authorities aimed at accelerating the adoption of heat pump systems including tax rebates, incentives, grants among others will accelerate product deployment. Accelerating development of residential infrastructure projects along with technological advancements toward integration of these technologies with renewables will positively influence business dynamics.
  
• For instance, in November 2025, New England in U.S. launched a USD 450 million Heat Pump Accelerator Program to drive widespread adoption of energy-efficient heating solutions. Backed by federal climate pollution reduction grants under the Inflation Reduction Act, the program targets installation of approximately 580,000 residential heat pumps across five states, aiming to cut carbon emissions by 2.5 million metric tons by 2030.
  
• Increasing environmental awareness, focus on improving and the significant cost-efficiency of heat pump systems will accelerate product deployment. Manufacturers are introducing advanced technologies featuring smart controls, artificial intelligence features, monitoring capabilities and offering installations services to consumers which further accelerate product demand across residential applications.
  
• For instance, in September 2025, Jetson, a Canadian company, introduced heat pump for residential applications, Jetson Air, aiming to reduce installation costs significantly. The company designs, sells, and installs its own central heat pump systems, offering homeowners a cost-effective transition from fossil fuels. With smart controls, sensors, remote monitoring, and Jetson Care for 24/7 maintenance, the company ensures reliability, efficiency, and simplified user experience.
  
• Continuous innovations in heat pump technology including integration of IoT, artificial intelligence, and compliance with zero-emission and energy-efficiency standards are key parameters driving product adoption. These systems deliver reliable performance, enhanced energy savings, and reduced operational costs, which makes them an ideal solution for modern buildings, further shaping the industry landscape.
  
• For instance, in September 2025, Bosch Home Comfort Group introduced Hitachi’s airHome series of ductless heat pumps for North American homes. Designed for energy savings and improved indoor air quality, these systems deliver reliable heating and cooling across diverse climates. Key innovations include Dry Mode for humidity control, HeatForce for performance in extreme cold down to -22°F, and Adaptive Defrost technology to prevent frost buildup, ensuring consistent efficiency.
  
• Governments authorities across the region are prioritizing energy efficiency, clean technologies, and sustainable manufacturing practices, further contributing to industry growth. Growing adoption of renewable-compatible technologies, along with supportive policies toward heat pump adoption and initiatives toward reducing greenhouse gases emissions, is accelerating deployment of advanced heat pump systems.
  
• For instance, in September 2025, NESCAUM released an action plan outlining strategies to accelerate heat pump adoption. Building on prior commitments, 11 states including California, New York, and Washington aim for heat pumps to represent 65% of residential HVAC and water heating sales by 2030 and 90% by 2040. This coordinated effort underscores strong regional collaboration to advance electrification and reduce building-related greenhouse gas emissions.
  
• U.S. holds a dominant share in the North America residential heat pump market owing to growing preference for energy-efficient heating and cooling technologies, coupled with the rapid expansion of residential infrastructure. Rising energy costs and environmental concerns are encouraging heat pump deployment, along with introduction of stringent building energy efficiency codes to enhance performance of infrastructure will positively influence business dynamics.
  
• For instance, from January 2025, the U.S. Environmental Protection Agency is eliminating high-GWP refrigerants in heat pumps including as R-410A, compelling manufacturers to adopt alternatives like R-454B and R-32. These low-GWP refrigerants offer improved environmental performance, aligning with sustainability goals and minimizing emissions associated with climate change.
  

North America Residential Heat Pump Market Trends

• North America residential heat pump industry is anticipated to grow owing to rising demand for space heating, cooling and hot water across residential establishments and supportive government policies toward adoption of energy efficient systems. Shifting inclination toward enhancing the energy efficiency of building infrastructure coupled and implementation of stringent standards and mandates to reduce GHG emissions will complement industry landscape.
  
• For instance, from October 2025, income-qualified homeowners in California, U.S., can access statewide HEEHRA rebates for single-family heat pump HVAC installations, including standalone homes, condos, and manufactured units. All installations must be completed and invoiced by December 2025, to qualify for the 25C federal tax credit, which expires at year-end. This deadline highlights urgency for homeowners to adopt energy-efficient systems while maximizing available financial incentives.
  
• Significant initiatives toward replacement of traditional heating systems, including boilers, furnaces and other technologies coupled with focus on reducing carbon emissions and promoting sustainable building practices, will shape the business landscape. Regulatory authorities implement strategic policies to reduce dependence on fossil fuels coupled with introduction of favorable measures to promote adoption of energy-efficient systems, will further augment industry outlook.
  
• For instance, in September 2025, Canada introduced the Greener Homes Affordability Program (CGHAP) to assist low- and middle-income households in reducing energy costs and emissions through no-cost home retrofits. Backed by nearly USD 21.8 million in federal funding for Efficiency Manitoba, CGHAP complements the Oil to Heat Pump Affordability (OHPA) program, which offers up to USD 14,500 upfront for heat pump conversions. Eligible residents can now access both programs, significantly improve affordability and accelerate energy-efficient home upgrades.
  
• Rising greenhouse gas emissions and the increasing consumer shift toward advanced, low-carbon technologies is shaping the industry dynamics. Ongoing adoption of highly energy-efficient systems to meet growing heating and cooling requirements, supported by robust regulatory frameworks, will augment business landscape. Furthermore, continuous research and development efforts by authorities and key players aimed at minimizing carbon footprint and accelerating innovation will positively influence the residential heat pump industry dynamics.
  
• For instance, in April 2024, the U.S. Department of Energy finalized the rule including Clean Energy for Federal Buildings mandate, mandating a 90% reduction in direct fossil fuel consumption within five years and complete elimination of on-site fossil fuel use by 2030. This initiative underscores the federal government’s commitment to decarbonization and sets a precedent for sustainable building practices across public infrastructure.
  
• Countries across the region witness significant climatic variations, further driving the adoption of eco-friendly heat pump systems designed to operate efficiently across a wide range of conditions, ensuring reliable heating and cooling performance. Their ability to deliver consistent comfort while reducing energy consumption and emissions across modern building infrastructure will contribute to industry growth.
  
• For instance, in February 2025, Viessmann Canada introduced new air-to-air heat pump systems for residential and light commercial applications, including the Vitocal 100-S single-zone ductless unit. Designed for high efficiency and quiet operation, it performs reliably in extreme climates and suits both new builds and retrofits. Its compact design and minimal installation requirements make it ideal for spaces without existing ductwork, offering versatile comfort and energy savings.
  

North America Residential Heat Pump Market Analysis

• Based on the product, the industry is segmented into air source, ground source and water source. The air source segment dominated over 88% market share in 2025 and is set to grow at a CAGR of over 10% through 2035.
  
• The air source heat pump segment is anticipated to witness significant grow owing to rising demand for heating cooling and hot water across residential establishments, varying climatic conditions, and increasing focus toward adoption energy efficient systems. Increasing adoption across households owing to easy installation and dual functionality, along with favorable financial incentives including subsidies, tax credits, and clean energy promotion programs will further augment industry landscape.
  
• For instance, from January 2025, air-source heat pumps designated as ENERGY STAR most efficient qualify for federal credits in the U.S. for maximum up to USD 2,000, under two eligibility methods. One pathway target heating-dominant applications with ENERGY STAR Cold Climate certification, while the other supports cooling-focused and dual-fuel systems. This policy aims to accelerate adoption of high-efficiency heat pumps, promoting energy savings across residential establishments.
  
• The ground source segment in North America residential heat pump market was evaluated at over USD 580 million in 2025. Rising demand for efficient heating and cooling solutions in residential spaces, coupled with strong focus on energy-saving technologies, is shaping the industry dynamics. Increasing demand technologies that maintain precise indoor temperatures across diverse applications, along with introduction of advanced, high-performance systems, are driving the geothermal heat pump industry growth.
  
• For instance, in April 2025, Dandelion Energy came into partnership with Lennar Corporation to execute one of the largest residential geothermal heat pump deployments in the U.S. Leveraging company’s streamlined installation process and state tax credits along with Xcel Energy’s all-electric construction incentives, this initiative significantly reduces upfront costs for builders, enabling heat pump adoption.
  
• Water source segment in North America residential heat pump market is set to grow at a CAGR of above 3% by 2035. Rising adoption of water source heat pumps, owing to increased adoption across densely populated urban areas where land availability is limited, as they utilize existing water sources without requiring extensive space. Continuous innovations, including advanced heat exchangers, intelligent control systems, and seamless integration with smart home technologies, have significantly enhanced the efficiency and user experience of these systems.
  
• For instance, in April 2024, Bosch Home Comfort has the CL and RL Series water source heat pumps, designed for residential and commercial applications, which compliance with the AIM Act effective January 2025. Both series utilize low-GWP refrigerants and advanced design features. The RL Series offers compact form, enhanced serviceability range of components for cost efficiency, and a unit protection module for system safety across households.
  

• Based on application, the industry is segmented into single family and multi family. The single family accounted for around 66% market share in 2025 and is anticipated to grow at a CAGR of over 9.5% through 2035.
  
• Single family application is set to witness significant momentum owing to rapid urbanization, rapid development of housing infrastructure, supported by favorable government initiatives and significant financial rebates will complement industry landscape. Rising consumer awareness toward efficiency and versatility of heat pump systems for both heating and cooling applications is further accelerating product adoption.
  
• For instance, from October 2025 onwards, income-qualified homeowners in California, U.S. can access statewide HEEHRA rebates for single-family heat pump HVAC installations, including standalone homes, condos, and manufactured units. All installations must be completed and invoiced by December 2025, to qualify for the 25C federal tax credit, which expires at year-end. This deadline highlights urgency for homeowners to adopt energy-efficient systems while maximizing available financial incentives
  
• Multi-family application is anticipated to surpass USD 4.8 billion by 2035. Growing demand for energy-efficient heating and cooling solutions across multi-story buildings, societies and apartments coupled with consumer shift toward clean energy technologies and cost reduction strategies, is shaping business dynamics.
  
• Rapid development across real estate sector along with increasing emphasis on sustainable climate control systems that deliver both environmental benefits and long-term economic savings, will augment industry landscape. Sustainability objectives by regional authorities, growing importance of green building certifications and consumers focusing on adopting energy efficient electric heat pump systems will accelerate product deployment.
  
• For instance, in December 2024, Samsung introduced its first air-to-water heat pump range for North America, featuring Slim Fit EHS ClimateHub indoor units including ClimateHub Mono with integrated tank and Hydro Unit Mono wall-mounted design. These solutions offer AI-powered controls, energy monitoring, and slim profiles, paired with the ultra-quiet EHS Mono R32 HT outdoor unit, ideal for multi-unit dwellings, apartments ensuring efficient installation and seamless integration.
  

• U.S. dominated the North America residential heat pump market with around 96.1% share in 2025 and generated over USD 5.8 billion in revenue. Significant efforts to reduce dependence on fossil fuels for heating and cooling applications, together with regulatory initiatives aimed at improving energy efficiency of building infrastructure will positively influence industry dynamics.
  
• For instance, in September 2025, the U.S. Department of Energy announced USD 90 million in competitive awards to support modernization of building energy codes across the nation. Funding will be allocated to 25 projects aimed at improving energy efficiency standards, reducing emissions, and lowering utility costs. This initiative addresses key barriers such as workforce training and regional code adaptation further helps to accelerate decarbonization and promote sustainable building practices.
  
• Ongoing technological advancements including optimized heat pump designs, integration of environmentally friendly refrigerants, and development of intelligent control systems through collaboration to improve performance and reliability, will positively influence industry dynamics.
  
• For instance, in November 2024, Daikin and Copeland announced a strategic collaboration by forming a joint venture to introduce Daikin’s advanced inverter swing rotary compressor technology into the U.S. residential HVAC market. This collaboration combines Copeland’s market leadership and technical expertise with Daikin’s proven energy-efficient technology, delivering enhanced reliability, reduced energy consumption, and cost savings.
  
• Canada residential heat pump market is anticipated to witness at a CAGR of 9.7% by 2035. Robust expansion of residential establishments coupled with stringent mandates and policies toward replacement of conventional heating systems and enhancing the energy efficiency of residential establishments will complement business landscape. Rising demand for reliable and efficient heating, cooling and hot water technologies across households along with adoption of systems offering cost savings and environmental benefits will further augment industry outlook.
  
• For instance, in November 2024, Panasonic introduced two air source ductless heat pump range for the Canadian market including Exterios Z and ClimaPure XZ, both utilizing R32 refrigerant for improved sustainability. The Exterios Z series offers enhanced energy efficiency and AI ECO technology for optimized performance, while ClimaPure XZ incorporates advanced air purification, delivering ten times more hydroxyl radicals than previous models.
  

North America Residential Heat Pump Market Share

• The top 5 players operating across the North America residential heat pump industry include Panasonic, LG Electronics, Carrier, Trane and Daikin collectively contributing around 52% of the market share in 2025.
  
• Leading players operating across North America residential heat pump market are adopting several key strategies to strengthen their industry presence and hold majority of market share. Key companies are aiming to invest in research and development toward development of advanced heat pump technologies including compressors, smart controls, hybrid systems, and environment friendly refrigerants to improve reliability, energy efficiency, and overall system performance.
  
• Key manufacturers compete on certain parameters including technological innovation, cost-effectiveness, product efficiency, and brand reputation, to enhance performance and minimize environmental impact. Companies are investing toward expansion of production capabilities and introducing advanced product lines to accelerate their product adoption across the industry.
  
• Daikin provides a comprehensive range of flexible HVAC solutions suitable to diverse residential requirements. The company’s advanced indoor comfort technologies are engineered for superior energy efficiency, incorporating inverter technology that adjusts system speed in real time to match heating and cooling demand. The company’s all-electric heat pumps deliver sustainable year-round comfort by efficiently cooling spaces during summer and providing reliable heating in winter.
  
• LG Electronics offers a diverse portfolio of heat pump solutions, including both ducted heat pump and ductless systems, designed for residential and commercial applications. The company’s air-to-water heat pump systems utilize advanced heat exchanger integrated with in-built pump to efficiently deliver floor heating, radiant heating, and domestic hot water. These systems are engineered to provide superior comfort and energy efficiency, supporting the transition toward sustainable HVAC solutions.
  
• Carrier offers an extensive range of heat pump solutions through its Infinity, Performance, and Comfort series, providing options suitable to diverse residential requirements. Many of the company’s residential heat pumps are ENERGY STAR certified, ensuring superior energy efficiency for both heating and cooling applications. The company emphasizes innovation in system design, delivering quiet, reliable, and high-performance solutions that offer precise control over indoor environments.
  
• Panasonic offers central heat pump systems comprising INTERIOS range suitable for residential establishments across North America. The company’s EXTERIOS Z series represents a premium range of wall-mounted mini-split heat pumps designed for efficient heating and cooling. Equipped with AI ECO technology, these systems intelligently optimize energy consumption while maintaining comfort. These units offer enhanced energy efficiency and can operate in extreme cold conditions down to –26°C.
  

North America Residential Heat Pump Market Companies

Major players operating in the North America residential heat pump industry are:

• American Standard Heating
• Arctic Heat Pumps
• Bard HVAC
• Blue Star Limited
• Bosch Thermotechnology Corp.
• Carrier
• Climate Master Incorporation
• Daikin
• Frigidaire HVAC
• FUJITSU GENERAL
• Johnson Controls
• Lennox International Inc.
• LG Electronics USA Inc.
• Midea
• Nordic Heat Pumps
• Panasonic Corporation of North America
• Rheem Manufacturing Company
• Samsung HVAC
• Trane
• WaterFurnace
  
• Daikin recorded a revenue of around USD 17.2 billion in the first half of 2025 and USD 33.1 billion for the complete year 2024. The company’s Cold-climate heat pumps are designed with advanced features to ensure reliable performance in extreme low-temperature conditions. The Daikin FIT AURORA heat pump systems offer high-efficiency featuring inverter-driven and low GWP potential.
  
• Panasonic reported revenue of around USD 26.4 billion for first half of 2025 and a revenue of USD 58.6 billion for the whole year 2024. The company’s EXTERIOS Z series is widely adopted in rebate programs and recognized as a reliable solution for cold climate applications. Its Pro series single zone mini-split heat pump systems offer heating and cooling, designed to offer energy efficiency, comfort and durability.
  
• Carrier reported sales revenue of USD 16.9 billion for first nine months of 2025 and net sales of USD 22.4 billion were recorded for 2024. The company offers air-to-water heat pump systems that offer energy efficient solutions, and sustainable cooling, heating, and hot water for domestic applications. Carrier’s Performance Series air-to-air heat pumps that are designed to deliver an optimal balance between affordability and long-term energy savings.
  
• Trane reported a revenue of USD 16.1 billion for the nine months of 2025 and USD 19.8 billion for the whole year 2024. The company’s electric heat pumps are engineered and tested to deliver reliable, quiet performance for both heating and cooling applications. It also offers all-electric packaged heat pump systems designed to reduce energy costs and emissions, which operates as an ideal solution for regions with mild winter conditions.
  

North America Residential Heat Pump Industry News

• In June 2025, Carrier relaunched its geothermal heat pump range for residential homeowners, introducing advanced features to improve efficiency, comfort, and serviceability. The updated models include advanced communicating options, two-stage operation for entry-level units, lighter designs for easier installation, and enhanced maintenance access. Incorporating Puron advance refrigerant, these systems deliver significant energy savings, long lifespans, and versatile configurations for sustainable home heating and cooling.
  
• In June 2025, Enertech Global introduced the WV, a next-generation variable-speed heat pump designed for versatility and efficiency. This hydronic system provides radiant floor heating, forced air heating and cooling, along with domestic hot water without requiring a buffer tank. With dual-fuel compatibility, simplified installation, EPIC Connected Controls, and over-the-air updates, the WV ensures reduced energy costs, space savings, and streamlined commissioning for both retrofit and new construction projects.
  
• In June 2025, Daikin introduced OTERRA 115V single-zone heat pumps, designed for quiet, high-efficiency performance in spaces without 208/230V circuits. These systems are equipped with Daikin inverter technology and can operate across wide temperature ranges and include the SIGNA flareless adaptor for faster installation. With low-GWP R-32 refrigerant, smart connectivity, and simplified maintenance, OTERRA offers sustainable comfort and convenience for residential applications.
  
• In February 2025, LG Electronics showcased its latest HVAC innovations designed for smart-home integration at the AHR Expo held in U.S. Aligning with decarbonization and electrification trends, the company expanded residential lineup features Energy Star-certified inverter heat pumps optimized for North American homes, offering seamless compatibility with A-coils and furnace systems. Additionally, the company introduced an inverter heat pump water heater utilizing dual-inverter technology and ThinQ app connectivity, delivering enhanced efficiency, smart control, and sustainability for modern households.
  
• In February 2025, Lennox Residential HVAC introduced the Dave Signature Collection SL22KLV Cold Climate Heat Pump, engineered for superior efficiency and performance in temperatures as low as -20°F. Featuring a variable-speed compressor with ERI technology, it achieves up to 21.10 SEER2 and 10.50 HSPF2, ensuring energy savings and quiet operation. Integrated with the Lennox S40 Smart Thermostat, it offers intelligent control, optimized comfort, and streamlined maintenance through advanced connectivity.
  

The North America residential heat pump market research report includes in-depth coverage of the industry with estimates & forecast in terms of “USD Million” and volume “000 Units” from 2022 to 2035 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