Geothermal Heat Pumps Market Size, Share & Trends Analysis Report By Type (Open Loop, Closed Loop), By Application (Residential, Commercial, Industrial), By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global geothermal heat pumps market size was valued at USD 9.4 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 7.2% from 2020 to 2027. Growing demand for reliable, cost-effective, and energy-efficient solutions are projected to drive market growth over the forecast period. The geothermal heat pump (GHP) extracts heat from the ground for space heating, cooling, and hot water generation. Such a pump extracts heat by the horizontal or vertical collector. The extracted heat is commonly distributed through a hydronic distribution system. A GHP offers higher efficiency than air-source owing to the advantage of the stable temperature of its geothermal subsoil heat source. The U.S. is one of the prominent markets for a geothermal heat pump. Increasing carbon emission and fluctuating energy prices led the consumers to use renewable heat sources, which is expected to drive the product demand in the country.

The U.S. government has favorable policies encouraging the installation of heat pumps, such as personal tax credits and direct incentives on the product installation. Improving energy efficiency across industries is one of the prime objectives of governments across the world. Rising need for renewable energy sources along with extensive government support in the form of subsidies, incentives, and other monetary benefits projected to drive the market over the forecast period. Growing population coupled with rapid industrialization has resulted in massive energy consumption across the world.

Growing consumption of fossil fuels, such as coal, oil, and natural gas, to meet heating requirements has a severely harmful impact on the environment. Rising awareness about climate change and greenhouse gas emissions is expected to boost the demand for energy-efficient products and technologies. Moreover, government regulations and emission standards are projected to increase the demand for energy-saving products, such as geothermal heat pumps, in the industrial and residential sectors, thereby supporting market growth.

Type Insights

The closed-loop type segment accounted for the largest market share of 85% in 2019 on account of high demand for these products due to their efficiency, low maintenance cost, and high durability. Closed-loop GHP uses multiple loops of interconnected pipe buried in the ground. A water or antifreeze solution flows continuously through the pipe. Geothermal heat is absorbed into the solution flowing in the closed-loop.

Depending upon the type of land and space availability, closed-loop GHP can be installed in a horizontal or vertical configuration. Horizontal configuration requires a substantial amount of ground area. The horizontal loop pipes are buried in trenches 6 to 10 feet deep and 100 to 400 feet long. The piping of the horizontal loop is usually coiled and stacked to provide a larger area for heat transfer.

Vertical closed loop is the most common configuration due to higher efficiency and low space requirement. Vertical loop configuration is installed in holes drilled deep into the ground. U-shaped loops of pipe are inserted in the holes, which are usually placed about 20 feet apart. Vertical configuration takes advantage of renewable energy from the ground, in a “free” way and reduces the heating costs.

The open-loop GHP segment projected to witness significant growth over the forecast period. Open-loop GHP uses groundwater from wells, lakes, rivers, or ponds as a heat source. Open-loop is the simplest and cheapest type of geothermal heat pump. However, open-loop installation is not feasible in many situations owing to limited availability of groundwater source, or low-quality groundwater, or local restrictions on open-loop systems.

Application Insights

The residential application segment led the market by accounting for a revenue share of 49.7% in 2019 on account of the growing demand for energy-efficient products that are designed for space heating, cooling, and hot water generation applications in homes and apartments. Horizontal closed-loop GHPs are widely used in the residential application segment.

The residential sector is one of the booming sectors, which is expected to propel the demand for GHP. Favorable government initiatives and tax rebates offered on the installation of energy-saving products are projected to augment the demand for GHP in the residential sector. Northern countries, in particular, use GHP for heating purposes due to cold temperatures.

The commercial application segment is anticipated to witness the fastest CAGR of 7.4% over the forecast period. Increasing use of large GHPs in commercial buildings for space heating or cooling is expected to be one of the major factors influencing the market growth. Vertically closed-loop systems are typically most appropriate for large commercial buildings.

Increasing demand for cost-effective renewable heating & cooling technology solutions in the industrial sector is projected to drive the product demand over the coming years. A geothermal heat pump is used in numerous industrial processes including evaporation processes, dehumidification, and water heating or cooling applications. Chemical, petroleum, and food & beverage are the major end-use industries, which are expected to drive the geothermal heat pump market over the forecast period.

Regional Insights

Asia Pacific held the largest revenue share of 37.1% in 2019. Improving economic conditions and rapid industrialization and commercialization are anticipated to augment the market growth over the coming years. A strong consumer base of the region has led to a surge in demand for GHP. Furthermore, it is one of the biggest manufacturing sectors with a dense population, which is projected to positively impact market growth.

Europe is projected to be the second-largest regional market over the forecast period. Favorable government initiatives associated with reducing energy consumption are anticipated to boost the product demand. The recovering construction sector is also projected to contribute to market growth in the near future.

The rising requirement of space heating and water heating in North America is projected to propel the market growth in this region. The growing commercial sector is also expected to boost the demand for advanced heating and cooling solutions. Moreover, government initiatives and rebates provided on incorporating eco-friendly and energy-saving technologies are projected to augment the demand for upgraded GHPs in the region.

Recovering market conditions in Central & South America is expected to boost industrial production, which is expected to drive the regional GHP market. Growing energy consumption in countries, such as Brazil and Argentina, is expected to boost the demand for energy-efficient heating solutions, thereby augmenting the market growth. Evolving residential and commercial construction sectors are also projected to fuel the product demand in the region.

Key Companies & Market Share Insights

Companies in the market have undertaken strategies, such as technology innovations, research & development, partnerships, and merger & acquisitions, to expand their product portfolio as well as to manufacture cost-effective, highly efficient, and superior products. Regional companies form strategic partnerships with major international players to promote the development of products with international standards. Major manufacturers of heat pumps are also concentrating on improving and expanding their after-sales and service network through M&A. For instance, in May 2018, Stiebel Eltron acquired Danfoss Vlrmepumpar AB, a key manufacturer and one of the biggest suppliers in the Nordic market. Some of the prominent players in the geothermal heat pumps market include:

• Stiebel Eltron

• Ingersoll Rand (Trane)

• Vaillant Group

• Viessmann

• Glen Dimplex

• Daikin

• NIBE

• Carrier

• ClimateMaster, Inc.

• Bard HVAC

• Spectrum Manufacturing

• Dandelion

• Robert Bosch LLC

• Maritime Geothermal

• OCHSNER 

Geothermal Heat Pumps Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global geothermal heat pumps market report on the basis of type, application, and region:

• Type Outlook (Revenue, USD Billion, 2016 - 2027)

  • Closed Loop

    • Horizontal

    • Vertical

  • Open Loop

• Application Outlook (Revenue, USD Billion, 2016 - 2027)

  • Residential

  • Commercial

  • Industrial

• Regional Outlook (Revenue, USD Billion, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • France

    • Italy

    • Sweden

    • Finland

    • Switzerland

    • The Netherlands

  • Asia Pacific

    • China

    • Japan

    • South Korea

    • Australia

  • Central & South America

    • Brazil

    • Chile

  • Middle East & Africa

    • Saudi Arabia

    • UAE