Enjoy complimentary customisation on priority with our Enterprise License!
The geothermal heat pump market size is forecast to increase by USD 5.65 billion at a CAGR of 8.46% between 2023 and 2028. The market's expansion hinges on various factors, including the operational advantages offered by geothermal heat pumps compared to traditional systems, a surge in global energy consumption combined with a rebound in the housing sector, and escalating demand for renewable energy sources. Geothermal heat pumps stand out for their energy efficiency, reduced environmental impact, and long-term cost savings. As worldwide energy needs continue to grow, particularly with the recovery in the housing market driving construction activity, the focus on sustainable and renewable energy solutions like geothermal heat pumps is intensifying, driving the growth trajectory of the market.
Market Forecast 2024-2028
To learn more about this report, Request Free Sample
The market is driven by several key factors. Low maintenance cost and high durability are significant drivers attracting consumers seeking cost-effective and long-term solutions. The closed-loop GHP systems, with their loops and interconnected pipes, utilize ground and water resources efficiently, bolstered by antifreeze solutions for optimal performance. However, challenges such as the limited availability of suitable groundwater sources and heating costs remain, driving the need for continuous innovation and advancements in geothermal heat technology. Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.
One of the key factors driving growth in the market is the operational benefits of GHPs over conventional systems. The GHPs offer several benefits when compared with conventional heating and cooling systems like boilers, furnaces, air conditioners, and room heaters. One major advantage is that the same or single device, i.e., the heat pump, provides the benefits of both heating and cooling throughout the year. Every HVAC system operates differently under varying climatic conditions. Conversion from an electric furnace to an air-source heat pump enables cost savings of up to 50%.
Moreover, in an HVAC system, proper maintenance is crucial to ensuring efficient operation and longer service life. When different types of heat pumps are compared, geothermal pumps have a service life of 20-25 years, while air source pumps only have a service life of 10-15 years. This is because the compressors in geothermal pumps are exposed to less mechanical and thermal stress and are not prone to external environmental conditions. These advantages are expected to drive the momentum of the GHP market and provide a boost to demand during the forecast period and beyond. Thus, such benefits associated with the installation of GHP will propel the growth of the global GHP market.
The emergence of BEMS is a market trend that is expected to have a positive impact in the coming years. A heat pump is a term that is more commonly applied to HVAC systems. In both residential and commercial applications, heat pumps are widely utilized for space heating and cooling. Building energy management systems (BEMS) is a new idea that can result in large energy savings because the focus is on energy efficiency and emissions reduction. The global BEMS industry is projected to grow at a steady rate during the forecast period; the industry is mainly driven by the need for energy efficiency and cost reduction in buildings.
Countries such as the US and China have introduced energy labels such as the Energy Star and Three-Star that rate buildings based on energy consumption and other parameters. These ratings have further spurred the demand for BEMS. The growing use of BEMS will reinforce the market for HVAC, including space heaters, as these systems will become more energy-efficient and have a lower impact on the environment. Thus, the emergence of such technologies will boost the growth of the global GHP (Geothermal Heat Pump) market. Space heaters, integrated within HVAC systems, benefit from advancements in Building Energy Management Systems (BEMS) by optimizing their energy usage based on building energy ratings and peak demand periods. This alignment with energy efficiency standards enhances their appeal to consumers and regulatory bodies alike, driving adoption and market expansion in the context of sustainable building practices and environmental stewardship.
The high upfront cost will be a major challenge for the market during the forecast period. GHPs are used primarily for space heating and cooling; therefore, they find large applications in residential buildings. The deployment of GHPs and their retrofitting also depend on consumer preferences and disposable incomes. An important factor hindering small businesses and enterprises, as well as many households, from using GHPs is the high installation costs and price of heat pumps. In the long term, the savings realized from the use of GHPs can offset the high initial costs.
However, the market faces significant challenges because of the capital-intensive nature of these products. Considering the uncertainty in the global economic scenario, where businesses are looking for cost-saving measures, it becomes difficult for small and medium-sized enterprises (SMEs) to procure heat pumps. Hence, the high upfront cost for GHP installation may hamper the growth of the global GHP market.
The residential segment will account for a major share of the market's growth during the forecast period. The residential segment was the largest segment of the market in 2022 and will continue to be the same during the forecast period. Development in the construction of residential buildings directly impacts the demand for geothermal heat pumps, as they are an essential part of any residential building.
Customized Report as per your requirements!
The residential segment was valued at USD 4.90 billion in 2018. The construction industry is recovering following a long period of slowdown in the wake of the financial crisis in the past decade. A significant portion of the global market relies on residential end-users. The residential construction or housing market accounts for a substantial share of the global construction market. Significant growth of the global housing market is expected to drive the demand for geothermal heat pumps across the world.
For more insights on the market share of various regions Download Sample PDF now!
Europe is estimated to contribute 48% to the growth by 2027. Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. Since the mid-2000s, geothermal heat pumps have found major acceptability in heating technologies related to renewable energy. The growth of construction activities, especially in the residential sector, along with easy credit facilities and changing consumer preferences, has added momentum to the market in the region. Governments in this region are emphasizing increasing energy efficiency and reducing carbon emissions, thus adding further impetus to the market, which can ensure greater savings when compared with conventional heating, ventilation, and air conditioning (HVAC) units. Therefore, the need to replace such traditional systems with advanced and sustainable systems is expected to fuel the growth of the regional market during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Bard HVAC: The company offers geothermal heat pumps such as Q-TEC-STEP CAPACITY DEHUM Series.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Bard HVAC, Carrier Global Corp., Daikin Industries Ltd., Dandelion, Danfoss AS, Energy Smart Alternatives., GeoSmart Energy, Glen Dimplex Group., Griffiths Air Conditioning and Electrical Contractors, Johnson Controls International Plc., Kensa Group, Mitsubishi Corp., NIBE Industrier AB, REMKO GmbH and Co. KG, Robert Bosch GmbH, Sirac Air Conditioning Equipments Co. Ltd., Stiebel Eltron GmbH and Co. KG, Trane Technologies Plc, Vaillant GmbH, and Viessmann Climate Solutions SE.
Technavio market forecast the an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market is characterized by its low maintenance cost and high durability, making it an attractive option for sustainable heating and cooling solutions. One of the key technologies in this market is the closed-loop GHP, which utilizes interconnected pipes buried in the ground to transfer heat using an antifreeze solution. This system benefits from limited space availability and can be configured horizontally or vertically depending on the ground area and space requirement. Another important aspect is the hot water generation capability of horizontal closed-loop GHPs, which are well-suited for large GHPs and commercial applications. Vertically closed-loop systems offer benefits such as evaporation processes and dehumidification, making them efficient for water heating needs.
Moreover, the horizontal configuration of closed-loop GHPs involves horizontal loop pipes buried in trenches at a certain depth and length to maximize heat transfer. On the other hand, vertical closed-loop systems use U-shaped loops installed in holes drilled into the ground. However, challenges such as heating costs, feasibility in areas with low-quality groundwater, and local restrictions for open-loop systems persist. The market is witnessing significant growth driven by several key factors. One of the notable technologies is the vertical closed loop system, which involves burying pipes vertically into the ground to tap into the earth's relatively constant temperatures as a heat source. This system is favored for its limited availability of open-loop GHP segment, especially in areas lacking access to wells, lakes, rivers, or ponds.
Furthermore, despite these challenges, the market is witnessing growth due to the increasing demand for energy-efficient products and cost-effective renewable heating & cooling technology solutions. Tax rebates and incentives for adopting geothermal heat pumps also contribute to market expansion, especially in commercial and industrial sectors. As environmental concerns escalate, the market continues to gain traction as an environmentally friendly alternative to conventional water heater systems, reducing greenhouse gas (GHG) emissions and promoting energy-smart alternatives for new building systems and retrofit applications.
Market Scope |
|
Report Coverage |
Details |
Page number |
168 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.46% |
Market growth 2024-2028 |
USD 5.65 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
7.62 |
Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
Performing market contribution |
Europe at 48% |
Key countries |
US, Germany, France, UK, and China |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Bard HVAC, Carrier Global Corp., Daikin Industries Ltd., Dandelion, Danfoss AS, Energy Smart Alternatives., GeoSmart Energy, Glen Dimplex Group., Griffiths Air Conditioning and Electrical Contractors, Johnson Controls International Plc., Kensa Group, Mitsubishi Corp., NIBE Industrier AB, REMKO GmbH and Co. KG, Robert Bosch GmbH, Sirac Air Conditioning Equipments Co. Ltd., Stiebel Eltron GmbH and Co. KG, Trane Technologies Plc, Vaillant GmbH, and Viessmann Climate Solutions SE |
Market dynamics |
Parent market analysis, Market forecasting growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Quick Report Overview:
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.