At a Glance: The Heat Pumps Market in 2025

Heat pumps are gaining popularity as a sustainable alternative to traditional heating and cooling systems. Unlike conventional boilers that burn fuel to generate heat, heat pumps transfer heat from one location to another, making them highly energy-efficient. They work by extracting heat from the environment—air, ground, or water—and using a refrigeration cycle to provide heating or cooling. Even in cold temperatures, they can effectively warm indoor spaces, offering a greener way to regulate temperature in homes and businesses.

There are four main types of heat pumps, each suited to different environments and needs.

• Air-source heat pumps (ASHPs) are the most widely used, extracting heat from the ambient air to heat water or indoor spaces.
• Ground-source heat pumps (GSHPs), also known as geothermal heat pumps, draw heat from the ground through underground pipes, providing consistent performance year-round.
• Water-source heat pumps (WSHPs) utilise thermal energy from lakes, rivers, or reservoirs, offering high efficiency but requiring proximity to a water source.

Each type has unique benefits, with ASHPs being the easiest to install, while GSHPs and WSHPs provide long-term efficiency gains.

The rising adoption of heat pumps is driven by global decarbonisation efforts and government policies aimed at reducing carbon emissions. Many countries, including the UK, have recognised heat pumps as a key technology in achieving net-zero targets. Compared to gas boilers, heat pumps can cut carbon emissions by at least 20%, with even greater reductions when powered by renewable energy. As energy costs fluctuate and environmental concerns grow, businesses and homeowners are increasingly considering heat pumps as a cost-effective, low-carbon solution.

Consumer interest in sustainable living and energy-efficient technologies is further accelerating heat pump adoption. Improvements in affordability, efficiency, and performance have made them a viable option, even in colder climates or older buildings. With continued technological advancements and government incentives, heat pumps are set to play a vital role in the transition to a cleaner, more sustainable energy future.

Source: Global Heat Pumps Market 2025-2029

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