The global geothermal heat pumps market size was valued at US$ 11.20 Billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 7.7% from 2023 to 2030. The global geothermal heat pumps market is expected to grow rapidly over the forecast period due to the growing electricity consumption in the developing nations along with the rising concerns regarding the climate change. Moreover, growing demand for green technology is again expected to augment market growth. The aging residential housing stock is also expected to spur the adoption of geothermal energy for heating and cooling purposes.
Global Geothermal Heat Pumps Market: Regional Insights
Based on geography, the global geothermal heat pumps market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. Geographically, North America is expected to dominate the global geothermal heat pumps market over the forecast period. The United States is the leading producer of geothermal energy. The country is bolstering its renewable energy efforts with the establishment of new wind and solar farms. Moreover, the booming real estate sector in the country is further expected to fuel geothermal heating system sales. The North America geothermal heat pumps market was valued at US$ 2,466.5 million in 2019 and is expected to reach US$ 4,151.0 million by 2027, ascending at an estimated CAGR of 6.7% over the forecast period.
According to the Coherent Market Insights analysis, Europe accounted for 30.7% of the global geothermal heat pumps market revenue in 2019. The market in Europe was valued at US$ 2,896.9 million in 2019 and is projected to reach US$ 4,982.8 million by 2027, progressing at a CAGR of 7.0% from 2020 to 2027. Various government policies are being implemented in an attempt to decrease the energy consumption in the region. Such initiatives are expected to augment the demand for heat pumps. The European Union (EU) is focused on increasing the adoption of renewable energy technologies by around 20% as compared to the 1990’s level. According to the European Heat Pump Association (EHPA), space heating and cooling accounts for approximately 50% of the Europe’s total energy consumption. Heat pumps represent powerful resource to reduce carbon footprint and primary energy requirements.
Figure 1. Global Geothermal Heat Pumps Market, By Region, 2023
Global Geothermal Heat Pumps Market Drivers:
Growing construction activities worldwide to stimulate market growth
Growing awareness regarding the risks associated with fossil fuels and are adopting environment-friendly options among governments is propelling market growth. As the construction sector accounted for around 40% of the greenhouse emissions in 2019, a number of guidelines are now being implemented in order to reduce the environmental footprint of the construction sector. Moreover, some mandatory requirements in the U.S. are voluntary certification for LEED and EDGE and adhering to NYC emissions reduction law. Furthermore, growing awareness regarding the energy-efficient systems and hazards associated with the burning of fossil fuels is again expected to fuel market growth.
Increasing demand for energy-efficient solution to uplift market growth
Geothermal power uses no fossil fuel, which makes it one of the greenest energy sources available. In addition, geothermal power doesn’t produce any emissions during operation, unlike coal and oil furnaces. Geothermal energy is also renewable, meaning it will continue to be a source of energy for as long as the planet exists. It does, however, need electricity to operate, so pairing it with solar panels is a great way to lower its environmental impact.
Global Geothermal Heat Pumps Market Opportunities:
Increased oil prices and subsequent rises in electricity & energy costs have created a dire need for alternative energy sources. This has led to a significant growth in the geothermal heat pump market, especially in developed and emerging countries. The technology offers a variety of benefits, including cost efficiency, environmental sustainability, and durability. It also helps reduce air pollution, as it eliminates the need for fuel and is more powerful than other heating and cooling appliances.
The global geothermal heat pumps market is also likely to benefit from an increased focus on energy efficiency by governments. Many countries have initiated programs that encourage the installation of geothermal heat pumps. For instance, the U.S. provides a 30% tax credit for new geothermal heating systems. Additionally, the Canadian government has established an incentive program for the development of geothermal energy in Canada. These factors are expected to drive the market growth of the geothermal heat pump market over the forecast period.
|Base Year:||2022||Market Size in 2022:||US$ 11.20 Bn|
|Historical Data for:||2018 to 2021||Forecast Period:||2023 to 2030|
|Forecast Period 2023 to 2030 CAGR:||7.7%||2030 Value Projection:||US$ 20.18 Bn|
STIEBEL ELTRON GmbH & Co. KG, Ingersoll Rand, Vaillant Group, Viessmann Group, Glen Dimplex, and Daikin Industries, Ltd.
|Restraints & Challenges:||
Global Geothermal Heat Pumps Market Trends:
Growing trend of home automation and digitalization
The availability of financial support for the installation of geothermal heat pump systems is enhancing the market growth. In the residential sector, energy savings, as well as tax refunds, are driving the demand for these products. Incorporation of machine learning and artificial intelligence into its heat pump solutions can improve the efficiency. These advances are expected to simplify the operation and maintenance of heat pumps, which is a crucial factor for boosting their sales. In the commercial sector.
Rising popularity of closed loop heat pumps
The most common type of geothermal heat pump is a closed loop. This system utilizes a mixture of water and antifreeze to transfer heat from the ground to the building. This system works best in soils that are dense and have a heavy composition of rock or clay.
Global Geothermal Heat Pumps Market Restraints:
High cost of devices to hinder market growth
One of the biggest drawback to a geothermal system is its high cost. However, it can reduce electricity bills by 50 percent in the summer and up to 60 percent in the winter, the initial cost can limit the adoption among many potential homeowners.
Limited heat supply to restrict market growth
Because of the way they work, geothermal systems cannot provide as much warmth for a home as traditional HVAC equipment. This means user will still need to use a backup heating source for the coldest days of the year. This factor is expected to restrict its adoption, thereby hampering market growth.
Figure 2. Global Geothermal Heat Pumps Market, By Type, 2023
Global Geothermal Heat Pumps Market Segmentation:
The global geothermal heat pumps market report is segmented into type, application, and region
Based on type, the market is segmented into Closed-Loop and Open-Loop. Out of which, Closed-Loop is expected to dominate the global market over the forecast period. These systems are comprised of a series of interconnected pipes covered in the ground and are pumped with water or antifreeze solution. Geothermal heat is absorbed into the arrangement streaming in the closed loop, resulting in the generation of electricity and thermal energy.
Open-Loop segment is also expected to witness significant growth in the near future and this is owing to the fact that they are simplest and cheapest type of geothermal heat pump available today in market.
Based on application, the market is segmented into Residential, Commercial, and Commercial. Out of which, Residential is expected to dominate the global market over the forecast period and this is attributed to the increased demand for energy-efficient products for space heating and cooling. Furthermore, as the older residential properties in developing countries reach their end of life, the housing industry has a thriving renovation and maintenance upkeep sector that is driving the installation of geothermal heat pumps.
Commercial segment is also expected to witness significant growth in the near future and this is owing to the demand is being driven by the growing infrastructure development activities.
Global Geothermal Heat Pumps Market: Key Developments
In November 2020, Daikin North America LLC, a subsidiary of Daikin Industries, Ltd. acquired Stevens Equipment Supply, a Minnesota based wholesale distributor of HVAC, food services industry equipment, parts and accessories. This acquisition was aimed at enhancing Daikin’s North American position as an indoor comfort solutions provider.
In July 2019, Stiebel Eltron opened a new flagship store Foshan, Guangdong Province, China. This new store will offer products and solutions in the areas of heating, cooling, and ventilation on behalf of the company.
In April 2023, EHP Technology Company has announced the launch of its revolutionary geothermal heating system. The Company's CEO, Mr. AnÄ±l Çil made the announcement while speaking to reporters at an event organized by the company.
Global Geothermal Heat Pumps Market: Key Companies Insights
The global geothermal heat pumps market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global geothermal heat pumps market are STIEBEL ELTRON GmbH & Co. KG, Ingersoll Rand, Vaillant Group, Viessmann Group, Glen Dimplex, and Daikin Industries, Ltd.
*Definition: Geothermal energy is one of the most efficient methods of producing heat, with a thermal efficiency exceeding 100 percent. This is mainly due to the fact that the system uses the earth’s natural heat to produce electricity and heat water. Moreover, the geothermal system produces no greenhouse gases and emits minimal pollutants. This makes it the ideal source of clean and sustainable energy.