Global heat pump market slow but progressing in 2023April 2024

The global market for hydronic heat pumps has grown modestly by 1% in 2023.

Growth has been generated by markets with long history of heat pump deployment, like Japan and Sweden, where replacement market has become mature, but also by Germany where high gas prices combined with policy and financial support have created a soaring market in 2022 and in the first half of 2023. Among the more recent newcomers United States, the Netherlands and the UK have also seen dynamic development of the hydronic heat pump sales.

The top performers from the last couple of years fared less well in 2023. China, which accounts for the largest share of the global hydronic heat pump market, remained subdued and did not grow. Most market segments have declined slightly, but growth recorded in the monoblock segment prevented the overall market decline.

In Europe, the market has been troubled in 2023. Even though the decline in total European sales of hydronic heat pumps has not been very potent - sales have been lower by some 2% than in 2022 – many suppliers have experienced disappointment facing lower market demand than has been anticipated after tremendous market growth in 2022.   Significant sales drops have been recorded in two of the biggest European markets, Italy and France, and demand reduction experienced by two other important markets, Finland and Poland, have contributed to the troubles.

Monoblock heat pumps have emerged as a clear winner in 2023. Their overall European sales have grown by 17% in 2023, while sales of split heat pumps have declined by 20%. Monoblock units are easier to install and are reported to have smaller footprint.

Domestic hot water heat pumps, the third most important segment in heat pumps’ sales volume, have seen decline in sales as customers were showing their preference for combined units, providing space heating and domestic hot water.

Hybrid heat pumps have been growing steadily over the last few years, albeit from a law basis. Italy has emerged as the most important market for these units. In 2023 Italian market has posted strong decline in sales, pulling the overall number of hybrid heat pump sales down. It is however worth noting, that all other European markets have seen further growth in this segment.

Economic challenges present in most European countries have resulted in slowing new construction and subdued demand for residential housing. Soaring living cost, persistently high interest rates and geopolitical worries, particularly present in countries bordering Ukraine or Russia, have created cautious consumers. Reduction in financial support and policy wobbles in some countries have not helped consumer confidence either. Moreover, while many countries have seen gas prices falling during 2023, high electricity prices persevered, reducing the economic incentive for the end user.

The long-term outlook for heat pumps is nevertheless positive even though expectations for 2024 need to be modest. It is after all the year of elections in many countries, including the EU parliamentary elections in June. However, decisions which are behind some powerful market drivers for heat pumps have already been taken and their consequences are shaping the markets: increasingly stringent energy efficiency requirements make it into building regulations, ambitious plans for accelerating renovation rate have been laid in many countries, banks are developing green financing for homeowners, energy companies make heat pumps part of their business models and last but not least, within the industry the massive innovation is ongoing exploring responses to market hurdles and to customers’ expectations.

BSRIA has released the latest research data on global heat pump markets’ developments in 2023 at the end of March 2024. Reports for individual countries and the global market overview include information on sales by type of technology, together with data on hybrid heat pump sales. Market analysis to the high level of granularity from technology, commercial and competitive perspectives is also provided.

To order country reports or the global overview data please contact your regional team: 

BSRIA UK - E:  T:  +44 (0) 1344 465 610

BSRIA Asia, contact BSRIA China - E:  T: +86 10 64657707

BSRIA Americas, BSRIA USA - E:  T:  +1 312-753-6800


Discover your market advantage today. Seize the future, powered by knowledge!