Canada Outdoor Air Source Heat Pump Market Size, Share & Trends Analysis Report By Product Type (Air to Air, Air to Water), By Application, By Size, By Region, And Segment Forecasts, 2023 - 2030

Market Size & Trends

The Canada outdoor air source heat pump market size was valued at USD 1,477.5 million in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 6.9% from 2023 to 2030. The growth of the industry is expected to be driven by the rising need for cost-effective and energy-efficient space cooling and heating applications in the residential and commercial sectors. The various advantages of heat pumps such as low maintenance requirements, economical operations, low carbon footprint, and longer lifespan expectancy have greatly influenced their demand. Furthermore, its ability to provide water-heating solutions along with heating and cooling of space is expected to boost the demand for air source technology over the forecast years.

The Canadian government is becoming increasingly concerned with the problems associated with fossil fuels and is adopting environmental-friendly alternatives. The construction industry is undergoing substantial changes as new laws to reduce carbon footprint are being adopted. With the federal government establishing an annual carbon price and announcing that all new construction must be net-zero-ready by 2030, the industry must find new ways to reduce emissions and expenses. Using air-source heat pumps for year-round heating and cooling is a prominent approach to cutting energy usage and carbon emissions.

Electrification is regarded as a significant global contributor to climate change mitigation since low-carbon power can replace the present fossil fuel usage in buildings and surface transportation. On the supply side, ideas for achieving low carbon emissions by 2050 often emphasize the expansion of renewable energy, as well as carbon capture for fossil fuel electricity generation. This is accompanied by electrifying as much of the heating and transportation sectors as possible, necessitating the establishment of a charging network for automobiles, the installation of new heating systems in buildings, along with a slew of other technological, economic, and social changes.

With rising energy costs, the demand for efficient air-source heat pumps is expected to be on the rise. The significant initial investment for such systems will be repaid in full by reduced energy consumption. Adaptable heat pumps will help organizations seeking to broaden their exposure to new technology breakthroughs. As technology advances, heat pumps will offer increasingly more cost-effective heating and cooling solutions.

The benefits of adopting an air source heat pump are energy savings, increased automation, environmental sustainability, cost savings, and efficiency. A remote monitoring system of air source heat pump drying system based on IoT, which is designed and developed to enhance the automation capability of the drying system present in ASHP.

Product Type Insights

The air-to-air segment led the market and accounted for 88.7% of the Canada outdoor air source heat pump industry revenue share in 2022. The majority of air-source heat pump integrations in Canada involve air-to-air heat pumps, which warm or cool the air. An air-to-air heat pump is made up of an exterior unit, inside pipes, and individual 'blowers' that are installed in different rooms around the house. Since air-to-air heat pumps obtain their heat energy from the outside air, they are an energy-efficient option.

When the temperature difference between indoors and outdoors is low, air-to-air systems perform better. Additionally, an air-to-air heat pump is more practical in situations without the need for water heating and often when only a few rooms need to be heated, as opposed to the entire house. They are especially well suited for commercial spaces like offices and stores that do not need to heat any water.

In ductless air-to-air heat pumps, the interior coil of the heat pump is housed in an indoor unit, and the air is cooled or heated by moving over the coil before being routed through the ductwork to various places in the residence. Construction installation for ductless systems is minimal because all that is needed to connect the indoor heads and outdoor condenser is a three-inch hole through the wall. These aforementioned factors are expected to drive the demand for ductless systems over the forecast period.

The air-to-water (ATW) segment is expected to be the fastest growing at a CAGR of 8.1% during the forecast period 2023-2030. ATW heat pumps may save energy, particularly in cold climates where many other air-to-air heat pumps struggle; provide space conditioning and hot water heating; and a range of benefits to customers. These factors are expected to boost demand in the coming years.

The Nordic ATW-Series air-to-water heat pump, for example, is an air source heat pump capable of heating or cooling water for a hydronic heating/cooling system. Furthermore, the air-to-water heat pumps are more suited for radiant flooring or fan coil systems since they work more effectively while heating water to lesser temperatures, i.e., below 45° to 50°C.

Size Insights

The 15,000 BTU segment led the Canada outdoor air-to-water heat pump market and accounted for a 16.7% volume share in 2022. Heat pumps are a popular choice for heating homes since they are very effective and environmentally friendly. Air-to-water heat pumps are an alternative to air-to-air heat pumps in Canada. Moreover, air-to-water heat pumps may save energy, particularly in cold climates where many air-to-air heat pumps struggle, provide space conditioning and hot water heating, and give a variety of additional customer benefits. These aforementioned factors are likely to drive the demand for air-to-water heat pumps in Canada over the forecast period.

For instance, Mitsubishi Electric launched the CLIMAVENETA NX-N brand of hydronic heat pump system in the Canadian market. The system offers a variety of configurations, capacity levels & options and is capable of scaling up to meet even the largest requirements, from light commercial applications to centralized district heating and cooling facilities.

There are additional single-zone heat pumps with capacities of 6,000 BTU and 24,000 BTU; however, these are rarely installed in residential settings. They frequently form a part of a multi-zone system. For instance, a multi-zone (many inside units linked to one outside unit) heat pump is most frequently utilized with a capacity of 7,000 BTU. Most frequently, a multi-zone system with two or more interior units connected to it includes a 24,000 BTU outdoor unit. Additionally, 12,000 BTU and 15,000 BTU are the most widely used sizes for Halifax Regional Municipality (HRM) property owners.

Application Insights

The residential segment led the Canada outdoor air-to-air heat pump market and accounted for 82.0% of the volume in 2022. Canada's population expansion would significantly boost the growth of the residential construction sector in the coming years. Moreover, increasing investments by the government of Canada to provide affordable housing for low-income families through the Canada Mortgage and Housing Corporation (CMHC) program and the Affordable Housing Initiative (AHI) are anticipated to further augment residential construction activities in the country.

The rapid urbanization, coupled with increasing initiatives, for energy-efficient products is expected to drive the demand for air-to-air heat pumps in the residential sector. For instance, since the launch of the Canada Greener Homes Loan program, approximately 20,000 homeowners applied for a loan, and loan commitments amounting to USD 166.5 million were made, thereby driving market expansion.

Canada's construction sector is anticipated to rise due to the country's growing population, urbanization, immigration rates, and increasing government investments in light commercial construction. An increasing number of service-providing firms in the country are expected to fuel the demand for office spaces, thus, driving light commercial construction. Thus, rising light commercial construction in Canada is expected to augment the growth of the air-to-air heat pump industry in the country.

Air-to-air heat pumps provide significant energy savings and can be installed in a wide range of commercial facilities, including office buildings, medical facilities, schools, courthouses, and training facilities. The extensive use of large heat pumps in commercial buildings for space cooling or heating applications is expected to be one of the major factors influencing market growth.

Regional Insights

Quebec led the Canada outdoor air-to-water heat pump market and accounted for 51.4% of the revenue share in 2022. This is owing to rising investments in the construction of non-residential buildings, coupled with increasing government initiatives regarding energy efficiency in Canada, which are anticipated to drive the demand for air-to-water heat pumps over the forecast period.

According to an economic and climate study by the Ontario Clean Air Alliance, a gas furnace has an efficiency of 100%, since it is unable to produce more heat than the energy present in the fuel. Heat pumps may move several units of heat energy with one unit of electrical energy and it achieves average efficiencies of 300% or more since they use electricity for power rather than to generate heat. These aforementioned factors are expected to drive the demand for heat pumps in Ontario over the projected period.

The City of Toronto's Home Energy Loan Programme offers low-interest financing and incentives to assist homeowners in installing heat pumps and other home energy improvement measures. Moreover, the Canada Greener Homes Grant is also available for several heat pumps. As a result, such initiatives are expected to augment the demand for heat pumps in Toronto over the forecast period. Additionally, the cooling demand for the small commercial structure is always greater than the heating demand, allowing the ASHP to satisfy the cooling needs.

Key Companies & Market Share Insights

Canada outdoor air source heat pump industry is characterized by intense competition owing to the presence of privately and publicly held companies. Key players in this market include Carrier; Daikin Industries, Ltd.; Ingersoll-Rand Plc (Trane); Robert Bosch GmbH; Danfoss; Mitsubishi Electric Corporation; and Panasonic Holdings Corporation.

Canada outdoor air source heat pump manufacturers adopt several strategies including mergers, joint ventures, acquisitions, new product developments, and regional diversification to progress their market penetration and fulfill the changing technological demand. For instance, in February 2023, LG introduced an air source heat pump (ASHP) capable of heating 200-270 liters of residential water. The pump has a coefficient of performance (COP) of up to 3.85 and uses R134a as a refrigerant. Some prominent players in the Canada outdoor air source heat pump market include:

• Carrier

• Daikin Industries Ltd.

• Ingersoll-Rand Plc (Trane)

• Robert Bosch GmbH

• Danfoss

• Mitsubishi Electric Corporation

• Panasonic Holdings Corporation

• Fujitsu

• LG Electronics, Inc.

• Rheem Manufacturing Company

• Gree Comfort

• Samsung

• Lennox International

• Hitachi, Ltd.

• Johnson Controls, Inc.

Canada Outdoor Air Source Heat Pump Market Report Scope

Canada Outdoor Air Source Heat Pump Market Report Segmentation

This report forecasts volume & revenue growth at regional & country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the Canada outdoor air source heat pump market report based on product (air to air), type, size, application, region, and product (air to water), type, size, application, and region.

• Canada Outdoor Air Source Heat Pump Type Outlook (Volume, Units; Revenue, USD Million, 2018 - 2030)

  • Air to Air

    • Unitary system

    • Ductless system

  • Air to Water

• Canada Outdoor Air to Air Heat Pump Product Outlook (Volume, Units; Revenue, USD Million, 2018 - 2030)

  • Air Source Heat Pump (ASHP)

    • Hybrid

    • Electric

  • Cold Climate ASHP (CC-ASHP)

    • Hybrid

    • Electric

• Canada Outdoor Air to Air Heat Pump Application Outlook (Volume, Units; Revenue, USD Million, 2018 - 2030)

  • Residential

  • Light Commercial

• Canada Outdoor Air to Air Heat Pump Size Outlook (Volume, Units; Revenue, USD Million, 2018 - 2030)

  • 6,000 BTU

  • 9,000 BTU

  • 12,000 BTU

  • 15,000 BTU

  • 15,001 to 24,000 BTU

  • 24,000 to 48,000 BTU

  • Above 48,000 BTU

• Canada Outdoor Air to Air Heat Pump Regional Outlook (Volume, Units; Revenue, USD Million, 2018 - 2030)

  • Ontario

  • Quebec

  • Maritimes (NB, PEI, NFL, NS)

  • British Columbia

  • Alberta

  • Manitoba

  • Saskatchewan

• Canada Outdoor Air to Water Heat Pump Application Outlook (Volume, Units; Revenue, USD Million, 2018 - 2030)

  • Residential

  • Light Commercial

• Canada Outdoor Air to Water Heat Pump Size Outlook (Volume, Units; Revenue, USD Million, 2018 - 2030)

  • 6,000 BTU

  • 9,000 BTU

  • 12,000 BTU

  • 15,000 BTU

  • 15,001 to 24,000 BTU

  • 24,000 to 48,000 BTU

  • Above 48,000 BTU

• Canada Outdoor Air to Water Heat Pump Regional Outlook (Volume, Units; Revenue, USD Million, 2018 - 2030)

  • Ontario

  • Quebec

  • Maritimes (NB, PEI, NFL, NS)

  • British Columbia

  • Alberta

  • Manitoba

  • Saskatchewan