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The heat pump sector is now revolutionizing in terms of sector uptake and initiatives toward grid decarbonization and wean away from Russian gas imports. Social and policy innovation will boost demand in the United Kingdom, Germany, and Ireland; high demand will be seen in France, Italy, and the Nordics and moderately high demand in Benelux, Austria, and Poland. Scandinavian countries have some of the highest per capita penetration levels for heat pumps. Europe and North America hold more than three-fourths of the global unit shipment share and will continue to lead in terms of demand. Air source heat pumps will continue to be the prime technology worldwide. A more transparent, equitable, and ambitious transition toward heat pumps largely depends on the government ambitions, tax deductions, levy exemption, subsidies, and reduction in value-added tax (VAT). The high, unimpressive upfront cost associated with heat pumps remains a key restraint.

• However, various companies are also scaling up production to make heat pumps more cost competitive than a boiler. The global heat pumps sector is poised to grow at a compound annual growth rate (CAGR) of 8.5% from 2020 to 2030.

• Despite high potential and demand for heat pumps, the lack of skilled workers and installation challenges, higher dependence on natural gas for heating, lack of customer awareness, and poorly insulated building stock are some of key challenges.

• This analysis offers analytics into the latest sector developments and forecasts for unit shipment, cumulative installed base, associated revenue for major regions, and detailed analysis of key country segments.