LONDON — Technavio analysts forecast the global air source heat pump market to grow at a compound annual growth rate (CAGR) of almost 11 percent during the forecast period, according to their latest report. The research study covers the present scenario and growth prospects of the global air source heat pump market for 2017-2021. The market is segmented based on product (air-to-air heat pumps and air-to-water heat pumps) and geography (Europe, Middle East and Africa, the Americas, and Asia-Pacific).
The global air source heat pump market is projected to reach $192.9 billion by 2021. Heat pumps are deemed as the most efficient and cost-effective heating units in the market these days. They are environmentally friendly and can reduce the carbon footprint and energy bills drastically. These characteristics have enabled heat pumps to achieve a mass market status, and they are set to reach technological maturity in the coming years.
Technavio heavy industries research analysts highlight the following four factors that are contributing to the growth of the global air source heat pump market:
- Operational benefits over conventional systems;
- Tax benefits on installation of heat pumps;
- Rising global energy consumption coupled with resurgence of housing sector; and
- Robust growth in construction industry.
Heat pumps provide major benefits in comparison to conventional heating and cooling systems like boilers, furnaces, air conditioners, and room heaters. One major advantage is that heat pumps provide the benefits of both heating and cooling throughout the year. Heat pumps deliver lower operating costs in comparison to other heating systems, especially oil or electric heating systems.
Gaurav Mohindru, a lead unit operations research analyst at Technavio, says, “The shift from an electric furnace to an air source heat pump enables cost savings of up to 50 percent. Although the outside temperatures can affect this figure, the savings are still perceptible when compared with conventional systems.”
In 1992, the U.S. Environmental Protection Agency (EPA) launched the Energy Star program, which identifies and promotes energy-efficient products, homes, and buildings nationwide. Energy Star offers tax credits on purchasing or retrofitting air source heat pumps. The tax credits are applicable on Energy Star-certified products, which ensure 20 percent less energy use.
“The heat pumps that qualify the ratings set by EPA are eligible for the tax credits. However, tax credits are not applicable on new construction and rentals. Apart from the U.S., countries like the UK, Japan, and Australia also grant tax reductions, subsidies, and other benefits to encourage the use of heat pumps,” says Gaurav.
The rising population along with rapid economic growth globally is leading to the demand for energy. Emerging economies accounted for 97 percent of the global growth in demand for electricity; despite its reduced consumption, China recorded the largest increment in primary energy consumption worldwide. Global energy demand is projected to grow by 34 percent by 2035.
It is projected that the global GDP will double by 2035, with India and China accounting for almost half of the growth while organization for economic co-operation and development (OECD) economies will account for approximately a quarter. The growing emphasis on renewable energy as part of the changing energy mix will pave the way for the increased use of heat pumps. Therefore, growing energy consumption will add significant momentum to the global air source heat pump market during the forecast period.
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Publication date: 6/28/2017