U.S. HVAC Heat Pumps Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 – 2032)

U.S. HVAC Heat Pumps Market Size

U.S. HVAC Heat Pumps Market Trends and Growth Drivers

Rapid Shift toward Electrification for Sustainability Is Key Trend

Homes and commercial spaces are replacing gas-based heating systems with electric heat pumps. This shift is driven by the nationwide need to reduce the dependence on fossil fuels, as the U.S. is the largest emitter of GHGs after China.

California aims to make all homes zero-emission by 2030, to reduce the carbon footprint. This plan encourages the usage of electric heat pumps instead of gas-powered heating systems.

Consumers are aiming for sustainable living, for which heat pumps are ideal as they reduce carbon emissions by using electricity to transfer heat, instead of burning fossil fuels. Additionally, modern heat pumps have smart controls and thermostats, which allow users to optimize energy usage and reduce waste.

Urbanization and Population Growth Is Key Growth Driver

Urbanization is the major driver of heat pump adoption. As more people move to urban areas, the demand for efficient and space-saving heating systems is rising. Heat pumps are all-in-one systems that save space over regular furnaces. The U.S. population is continuously growing, driven by immigration, thus propelling the demand for climate control systems. Over 80% of the country’s population lives in cities, and this percentage is expected to keep increasing. Additionally, the country is a major tourist hub owing to its natural beauty, cosmopolitan city culture, dazzling nightlife and party scene, and premium services. This is why a huge number of hotels exist in the country, and those in the northern areas have heating systems as a necessity because of the cold winters. The winter temperature in major northern cities, such as Chicago, Detroit, Seattle, and New York, frequently drops below 0 degrees Celsius, with heavy snow and occasional snow blizzards.

Higher Initial Installation Cost Is Key Challenges

Heat pumps generally have higher initial costs as compared to traditional furnaces and cooling systems. Hence, while they offer long-tern energy savings, the high upfront cost often discourages individuals and small businesses to make the switch from their existing heating systems. Installation may also be more complicated and require modifications to the home or building structure, further adding to the overall cost.

A standard air-source heat pump usually costs between USD 3,500 and USD 7,500, depending on its size, brand, and features. In comparison, a gas furnace typically costs between USD 2,000 and USD 5,000, while an air conditioner is priced between USD 2,500 and USD 5,500.

U.S. HVAC Heat Pumps Market Analysis

Technology Insights

• The air-source category holds the largest market share, of 65%, in 2024.
• This is because air-source heat pumps are less expensive to install as compared to others, making them more accessible.
• These systems are well-suited for both heating and cooling, which makes them an attractive option over individual heating and cooling systems.
• The geothermal category will grow at the highest CAGR during the forecast period.
• This is because geothermal heat pumps are highly energy-efficient, which lowers operational costs and emissions.
• Geothermal systems do not need to generate heat from outside air as they extract it from the earth’s surface.

The technologies analyzed in this report are:

• Air-Source (Largest Category)
  • Air-to-air
  • Air-to-water
• Water-Source
• Geothermal (Fastest-Growing Category)

Capacity Insights

• The up to 10 kW category holds the largest market share, of 40%, in 2024 because this capacity range is ideal for smaller buildings, homes, and apartments.
• Heat pumps of this much power output are more affordable, easier to install, and provide excellent energy savings, without the need for substantial investments.
• In March 2023, Mitsubishi Electric an air-source heat pump that uses propane (R290) as its refrigerant.
• This heat pump can produce between 5 kW and 8.5 kW of heat and provide domestic hot water at temperatures of up to 75°C.
• The above 30 kW category will grow at the highest CAGR during the forecast period.
• This is because heat pumps in this capacity are used in large commercial buildings and industrial areas.
• The market is further growing as businesses and industries shift toward more-sustainable and energy-efficient solutions.

The capacities analyzed in this report are:

• Up to 10 kW (Largest Category)
• 10–20 kW
• 21–30 kW
• Above 30 kW (Fastest-Growing Category)

Refrigerant Insight

• The R410A category holds the largest market share, of 50%, in 2024.
• It is a high-performance refrigerant, giving better energy efficiency than primitive ones in homes and business spaces.
• It is used in many types of products, from small residential units to large commercial HVAC systems.
• The SNAP Program of the EPA checks and approves refrigerants for use in various industries, including HVAC and refrigeration.
• While the program mainly promotes the shift to refrigerants with a lower Global Warning Potential (GWP), it approves R-410 for use in HVAC systems.
• The R32 category will grow at the highest CAGR during the forecast period.
• This is because R32 has an extremely low GWP, which makes it one of the most-eco-friendly refrigerants.
• It offers high efficiency and lower energy consumption, which makes it attractive to consumers and businesses focused on reducing energy expenses.
• In June 2023, Daikin announced the opening of the Daikin Sustainability & Innovation Centre in Washington, U.S.
• The center creates eco-friendly and efficient HVAC systems, including heat pumps and inverters.
• It also focuses on promoting the use of the environmentally safer refrigerant R32, which has a lower GWP.

The refrigerants analyzed in this report are:

• R410A (Largest Category)
• R407C
• R32 (Fastest-Growing Category)
• Others

End Use Insights

• The residential category holds the largest market share, of 40%, in 2024.
• This is because residential consumers are increasingly adopting energy-efficient heat pumps due to the rising cost of electricity.
• The Inflation Reduction Act (IRA) and ENERGY STAR program offer financial rewards and rebates to homeowners who install energy-efficient heat pumps, making these appliances more affordable.
• The commercial category will grow at the highest CAGR during the forecast period.
• This is because commercial entities are increasingly focusing on reducing their energy consumption, to lower operating costs.
• Many commercial building owners are seeking green building certifications, and heat pumps help in meeting these sustainable goals.
• The major financial hubs of New York City, Chicago, and Detroit and other major cities, including Seattle and Boston, experience long and harsh winters, which is why heat pumps are necessary here.
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The end uses analyzed in this report are:

• Residential (Largest Category)
• Commercial (Fastest-Growing Category)
• Industrial

Regional Analysis

• The south region holds the largest market share, of around 35%, in 2024.
• This is because the south experiences long, hot, and humid summers, which increases the demand for cooling systems, such as AC and heat pumps.
• Heat pumps are popular because they offer both heating and cooling.
• Consumers in the South are setting goals for energy efficiency due to the rise in electricity costs.
• The south is also the most populated of all the regions in the country, which drives the demand for HVAC systems.
• The northeast region will grow at the highest CAGR during the forecast period.
• The northeast is known for its strong commitment to sustainability, renewable energy, and efforts for reducing carbon emissions, and heat pumps are being increasingly installed to achieve these goals.
• The Northeast experiences long and harsh winters and cool summers, which makes heat pumps a necessary amenity in homes, commercial spaces, and factories.

The regions analyzed in this report are:

• Northeast (Fastest-Growing Region)
• Midwest
• West
• South (Largest Region)

U.S. HVAC Heat Pumps Market Share

U.S. heat pumps market is fragmented due to the existence of a large number of manufacturers. Additionally, these products are available in different sizes, styles, and features to match the needs of different consumers and climates. The systems also range from budget-friendly to expensive, high-output models. The ongoing advancements in energy efficiency and eco-friendly refrigerants have led to the rise of new companies offering better pumps.

U.S. HVAC Heat Pumps Market News

• In June 2024, Trane Technologies plc completed the U.S. Department of Energy's (DOE) Residential Cold Climate Heat Pump (CCHP) challenge, which focuses on creating residential heat pumps for very cold weather.
• In November 2023, LG Electronics Inc. announced that it is building a research facility in Alaska for improving HVAC technology. This project is part of a partnership with local universities, called the Consortium for Advanced Heat Pump Research (CAHR), under which LG hopes to make its HVAC products for cold climates more competitive.