Heat pumps
Electric heat pumps for homes and buildings: 108 GW sold worldwide in 2025, with rebates driving sales in Canada and Europe
Heat pumps are electric systems that move heat into a building, or out of it for cooling, from outdoor air, the ground or water. They are sold to homeowners, builders and commercial building owners, mostly through HVAC contractors. Products range from ductless mini-splits and cold-climate air-source units to air-to-water and ground-source (geothermal) systems and heat pump water heaters. Per the IEA, heat pumps met about 12% of global space-heating needs in 2024. Building sales peaked in 2022, slowed in 2023–24, and are recovering in Europe on the back of incentives. In Canada, federal and provincial rebates paid for more than 280,000 installs between 2020 and January 2026.
new market · sits inside NAICS 333415, 238220 · researched 2026-11-14
units shipped (annual global heat pump sales, by heating capacity) · world108
↗GW · 2025
installed capacity (global manufacturing capacity per year) · world145
↗GW per year (China ~35%, US 25%, EU 20%) · 2024
units shipped (heat pump sales, 21 European countries) · Europe (21 countries)2.9
↗million units (installed stock 29.3 million) · 2025
installed units with federal support since 2020 (incl. provincial co-delivery) · Canada281,278
↗heat pumps · 2026
G
Growth
Dated and sourced; forecasts are labelled as forecasts.
- 2026-07FORECAST (IEA Heat Pump Monitor 2026): under the Current Policies Scenario, global heat pump deployment in 2035 is about 80% above the 2025 sales level of 108 GW. Under the Stated Policies Scenario, 2035 sales are over 25% higher than that and more than double today's level, covering about 20% of global space-heating needs. ↗
- 2025-02In H1 2024, sales fell 1% in the United States (the 2nd-largest market) and almost 50% in the EU, and rose 13% in China (30% of the global total). By November 2024, US sales were up almost 15% year on year. ↗
- 2026European heat pump sales rose 13% in 2025 to 2.9 million units across 21 countries. Germany grew 50%, and heat pumps took 50% of its space-heating market for the first time. ↗
- 2026-07In France, Germany and the United States, annual heat pump sales now exceed sales of natural gas boilers and furnaces. More than 20% of US households rely on a heat pump for space heating. ↗
S
Segments
Each linked segment has its own page with its companies.
- Air-source & ductless mini-split heat pumps 8 — Reversible units that heat and cool homes; the bulk of North American and Japanese sales
- Cold-climate air-source — Air-source units rated to keep heating at very low outdoor temperatures; the main retrofit product in Canada and the northern US
- Air-to-water (hydronic) heat pumps 7 — Units that feed radiators or floor heating and replace boilers; strongest in Europe
- Geothermal (ground-source) heat pumps 4 — Heat pumps connected to buried loops or wells; higher installed cost, sold by specialist makers and installers
- Heat pump water heaters — Domestic hot-water heat pumps, including Japan's CO2-based 'Eco-cute' units
- Large / industrial and district heat pumps — Heat pumps for process heat and district heating, which the IEA calls the next growth frontier
C
Leading companies in heat pumps
14 companies, with the scale each source states.
| Company | Where | What they do | Scale |
|---|---|---|---|
| Daikin Industries 6367.T ↗ | Osaka, Japan since 1924 | Ranked first globally in HVAC equipment sales in 2023. Makes air-source and ductless heat pumps; owns Goodman in the US (acquired 2012). | revenue: 4.75 JPY trillions (US$30.02 billion) (2025) ↗ |
| Mitsubishi Electric 6503.T ↗ | Tokyo, Japan since 1921 | Ductless and cold-climate air-source heat pumps. Its Italian hydronics arm (ex-DeLclima, acquired 2015) makes HVAC and heat pump units. | revenue: 4.476 JPY trillions (whole company) (2022) ↗ |
| Midea Group 000333.SZ ↗ | Foshan, China since 1968 | Major Chinese maker of home and commercial HVAC, including air conditioners and heat pumps. | revenue: 458.5 CNY billions (US$68.44 billion, whole group) (2025) ↗ |
| LG Electronics 066570.KS ↗ | Seoul, South Korea since 1958 | Air conditioners, heat pumps and chillers; sells residential air-to-water heat pumps under the Therma V name. | revenue: 89.2 KRW trillions (US$66.55 billion, whole company) (2025) ↗ |
| Carrier Global CARR ↗ | Palm Beach Gardens, United States since 1915 | Air conditioners, furnaces and heat pumps. Bought Viessmann Climate Solutions (European boilers and heat pumps) for about EUR 12 billion. | revenue: 21.7 USD billions (whole company) (2025) ↗ |
| Trane Technologies TT ↗ | Swords, Ireland since 1871 | Commercial and residential HVAC (Trane brand), including heat pumps; also Thermo King transport refrigeration. | revenue: 21.3 USD billions (whole company) (2025) ↗ |
| Lennox International LII ↗ | Richardson, United States since 1895 | US maker of residential and commercial HVAC equipment, including heat pumps. | revenue: 5.34 USD billions (2024) ↗ |
| Johnson Controls International JCI ↗ | Cork, Ireland since 1885 | HVAC, fire and security equipment for buildings. Its residential and light-commercial HVAC business (incl. the Hitachi JV) went to Bosch in 2024. | revenue: 23.6 USD billions (whole company) (2025) ↗ |
| Bosch Home Comfort Group ↗ | Wetzlar, Germany since 1911 | Heat pumps and heating systems. Owns US geothermal maker FHP (2007), announced a EUR 225M heat pump factory in Poland, and took over Johnson Controls' residential HVAC business (2024). | revenue: 4.4 EUR billions (2024) ↗ |
| Vaillant Group ↗ | Remscheid, Germany since 1874 | Condensing boilers and heat pumps (made since 2006), the company's main business; family-owned. | revenue: 3.2 EUR billions (2024) ↗ |
| NIBE Industrier NIBE-B.ST ↗ | Markaryd, Sweden since 1952 | Air-source and ground-source heat pumps. Owns US geothermal maker WaterFurnace and the Climate Control Group (both acquired 2016). | — |
| Stiebel Eltron ↗ | Holzminden, Germany since 1924 | Ground-, air- and water-source heat pumps (since 1976) and heat pump water heaters (since 1979). | revenue: 700 EUR millions (2020) ↗ |
| Dandelion Energy ↗ | Mount Kisco, United States since 2017 | Geothermal heat pump supplier and installer in NY, CT, MA and southern VT; spun out of X (Alphabet) in 2017. | — |
| Reliance Home Comfort ↗ | Toronto, Canada since 1999 | Canadian installer and rental provider that sells, rents, installs and maintains heat pumps, furnaces, air conditioners and water heaters. | employees: 2,700 employees (2024) ↗ |
CA
In Canada
- 2026-01As of January 2026, 281,278 new heat pumps had been installed with federal support since 2020, including provincial co-delivery. Ontario led with 104,943, then Quebec 70,062, Nova Scotia 33,648 and BC 30,933. ↗
- 2026-01Oil to Heat Pump Affordability (OHPA) program: 28,454 heat pumps installed, 52,222 applications, 29,921 grants issued, $339.6M paid, average grant $11,352. NRCan says participating households save $1,377 a year on average. ↗
- 2026-01The Canada Greener Homes Grant is closed (applications ran May 2021 to February 2024; documents were due by Dec 31, 2025). Heat pumps were its top retrofit: 228,000 installed, with up to 250,000 expected by program end, and 6 in 10 homeowners chose one. ↗
R
What would have to be true
- The US federal 25C home-improvement credit (up to $2,000/yr for qualifying heat pumps) applies only to improvements made through Dec 31, 2025. US residential demand now depends on state and utility rebates and on replacing air conditioners at end of life.
- Canada's federal Greener Homes Grant has closed. Continued Canadian volume depends on OHPA and on provincial and utility programs keeping funding in place.
- Running costs depend on the electricity-to-gas price ratio. EHPA (Nov 2026) reports electricity still costs 2.5+ times more than gas in most of Europe.
- Supply and labour bottlenecks: the IEA notes rotary compressors are mostly made in China and that qualified installation and maintenance technicians are in short supply.
Quick answers
- How big is the heat pumps market?
- units shipped (annual global heat pump sales, by heating capacity) (world): 108 GW, 2025 — International Energy Agency; installed capacity (global manufacturing capacity per year) (world): 145 GW per year (China ~35%, US 25%, EU 20%), 2024 — International Energy Agency.
- Is the heat pumps market growing?
- FORECAST (IEA Heat Pump Monitor 2026): under the Current Policies Scenario, global heat pump deployment in 2035 is about 80% above the 2025 sales level of 108 GW. Under the Stated Policies Scenario, 2035 sales are over 25% higher than that and more than double today's level, covering about 20% of global space-heating needs.
- Who are the leading heat pumps companies?
- Daikin Industries (Japan), Mitsubishi Electric (Japan), Midea Group (China), LG Electronics (South Korea), Carrier Global (United States), Trane Technologies (Ireland), Lennox International (United States), Johnson Controls International (Ireland), and 6 more in the table above.
- Which heat pumps companies are publicly traded?
- Daikin Industries (6367.T), Mitsubishi Electric (6503.T), Midea Group (000333.SZ), LG Electronics (066570.KS), Carrier Global (CARR), Trane Technologies (TT), Lennox International (LII), Johnson Controls International (JCI), NIBE Industrier (NIBE-B.ST).
- Which Canadian companies are in heat pumps?
- Reliance Home Comfort, Toronto.
- What is happening with heat pumps in Canada?
- As of January 2026, 281,278 new heat pumps had been installed with federal support since 2020, including provincial co-delivery. Ontario led with 104,943, then Quebec 70,062, Nova Scotia 33,648 and BC 30,933.
- What are the main segments of the heat pumps market?
- Air-to-air (ducted and ductless mini-split), Cold-climate air-source, Air-to-water (hydronic), Ground-source / geothermal, Heat pump water heaters, Large / industrial and district heat pumps.
- What are the risks in the heat pumps market?
- The US federal 25C home-improvement credit (up to $2,000/yr for qualifying heat pumps) applies only to improvements made through Dec 31, 2025. US residential demand now depends on state and utility rebates and on replacing air conditioners at end of life.
Sources (21)
- Heat Pump Monitor 2026 – Key findings — International Energy Agency
- Is a turnaround in sight for heat pump markets? — International Energy Agency
- Market data — European Heat Pump Association
- Heat pump sales testify to government action — European Heat Pump Association
- Greener Homes Initiative progress update: January 2026 — Natural Resources Canada
- Energy Efficient Home Improvement Credit — Internal Revenue Service
- Daikin — Wikipedia
- Mitsubishi Electric — Wikipedia
- Midea Group — Wikipedia
- LG Electronics — Wikipedia
- Carrier Global — Wikipedia
- Trane Technologies — Wikipedia
- Lennox International — Wikipedia
- Johnson Controls — Wikipedia
- Bosch Home Comfort Group — Wikipedia
- Vaillant Group — Wikipedia
- Nibe Industrier — Wikipedia
- Stiebel Eltron — Wikipedia
- Dandelion Energy — Wikipedia
- Reliance Home Comfort — Wikipedia
- Viessmann — Wikipedia