Geothermal heat pumps, also known as geoexchange or geothermal systems, are renewable and sustainable Clean Energy systems that tap into the stored solar energy in the ground or in groundwater to provide heating and cooling with much greater efficiency than conventional systems. Heat pumps move heat from one place to another rather than generating heat. Geothermal heat pumps can reduce home heating and cooling costs by anywhere from 30 to 60 percent compared to conventional fossil fuel systems. They are also much more efficient than air-source heat pumps.
The Geothermal Heat Pumps Market is estimated to be valued at US$ 11.20 Bn in 2023 and is expected to exhibit a CAGR of 7.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
The key drivers for the growth of the geothermal heat pumps market are growing focus on energy efficiency, low carbon emissions and renewable energy sources. The growing emphasis on energy efficiency to reduce energy costs and carbon footprint is driving many building owners, developers and governments worldwide to adopt geothermal heat pump technology for heating and cooling needs. Geothermal heat pumps have substantially lower total lifecycle emissions than fossil fuel furnaces and air-source heat pumps. Also, since over 90% of the heat extracted or rejected comes from the stable temperature of the earth itself, they produce significant carbon dioxide emission reductions.
The geothermal heat pumps market is mainly segmented into open loop systems and closed loop systems. Closed loop systems are further divided into vertical and horizontal loop installations. Currently, the closed loop system segment dominates the market due to various advantages over the open loop systems such as less maintenance and ability to install in any area. Within the closed loop systems, the vertical loops sub-segment captures over 60% market share as vertical loops require less space for installation compared to horizontal loops.
- Political: Geothermal heat pump installation receives tax credits and subsidies from governments in many countries to promote the use of renewable energy, which is positively impacting the adoption of geothermal heat pumps.
- Economic: Lower operating costs compared to traditional heating and cooling systems are driving the demand for geothermal heat pumps from both residential and commercial sectors. The technology also saves significant cost on energy bills in the long run.
- Social: Rising environmental concerns and focus on sustainable living are fueling the preference for green and clean energy resources among consumers. This is propelling the geothermal heat pumps market.
- Technological: Ongoing technological advancements are making geothermal heat pumps more efficient and cost-effective. New system designs with improved components like advanced pumps and refrigerants are boosting the performance of these systems.
The global geothermal heat pumps market is expected to witness high growth, exhibiting CAGR of 7.7% over the forecast period, due to increasing environmental awareness and cost benefits offered by geothermal systems.
The North America region currently dominates the market with over 40% share due to extensive usage in both residential and commercial sectors in cold countries like the US and Canada. Government incentives for renewable energy and advanced geosystems engineering are propelling the North American market.
Key players operating in the geothermal heat pumps market are STIEBEL ELTRON GmbH & Co. KG, Ingersoll Rand, Vaillant Group, Viessmann Group, Glen Dimplex, and Daikin Industries, Ltd. These players are implementing strategies like new product launches, expanding distributor networks and plant capacity to strengthen their market position. For instance, in 2021 Vaillant Group launched its Hybrid Phoenix hybrid heat pump ranges in the UK to provide energy savings for home heating.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it