Demand for Energy-Efficient Heating Soars as U.S. HVAC Heat Pump Market Expands at 6.6% CAGR

NEW YORK - June 18, 2025 - PRLog -- According to the latest market research study published by P&S Intelligence, the U.S. HVAC heat pumps market reached a valuation of approximately USD 755.6 million in 2024 and is projected to exhibit a compound annual growth rate (CAGR) of 6.6% between 2025 and 2032, growing to an anticipated USD 1,254.4 million by 2032.

This growth is driven by harsh winter conditions across many regions, rising population and disposable income, and a surge in both residential and commercial construction activities. Moreover, heat pumps—offering both heating and cooling capabilities through heat transfer—present an energy-efficient, low-carbon alternative to gas- or electric-based systems, aligning with intensifying efforts to minimize greenhouse gas emissions.

Electrification is a key market trend, as U.S. homes and commercial spaces increasingly switch from gas-based heating to electric heat pumps. This shift supports nationwide goals to reduce fossil fuel dependence, with states like California targeting zero-emission homes by 2030. Policy support—such as tax credits and rebates—further boosts market momentum, enhancing affordability and adoption rates.

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Key Insights

• 2024 market segmentation revealed the South region as the largest contributor to sales, while the Northeast recorded the fastest growth.
• The residential category emerged as the dominant end-user segment due to homeowners replacing outdated systems for improved efficiency and comfort.
• Over the 2025–2032 period, the market is forecast to grow from USD 803.2 million in 2025 to USD 1,254.4 million in 2032, reinforcing a steady expansion trajectory.
• Electrification is being expedited by regulations like California's zero-emission homes initiative and federal tax credits of up to USD 2,000 per installation, supplemented by state rebates reaching USD 8,000.
• Technological advantages: heat pumps utilize heat transfer instead of fossil fuel combustion, significantly enhancing energy efficiency and reducing carbon footprints.
• Competitive environment: The market is highly fragmented, with numerous HVAC manufacturers—including Carrier, Daikin, Trane, Mitsubishi and LG—offering a variety of heat pump solutions.
• Emerging infrastructure support: Federal funding (e.g., USD 169 million via the Inflation Reduction Act) is being directed toward domestic manufacturing and workforce expansion to support scale-up.
• Adoption trends: Heat pump installations have surpassed gas furnace sales—first in 2022, then consistently in 2023–2024—with residential units capturing roughly 44% of cooling equipment share.
• Workforce dynamics: As demand climbs, there's an increasing need for trained HVAC installers. Government-backed training programs, including the American Climate Corps, are addressing the talent gap.