India Heat Pump Market Size, Growth and Forecast (2021-2030) Report – Share by End User (Residential, Commercial, Industrial), Technology (Air Source, Water Source, Ground Source), Rated Capacity, and Type

India Heat Pump Market Size

India’s heat pump market has been experiencing steady growth, with a compound annual growth rate (CAGR) of 10.44% from 2021 to 2024. This expansion is driven by increasing awareness of energy efficiency, government initiatives promoting renewable energy, and the rising demand for sustainable heating and cooling solutions across residential, commercial, and industrial sectors.

The growing need for space and water heating in urban areas, coupled with infrastructure development, has strengthened market penetration. While heat pumps account for 12% of global residential heating equipment sales, their application in India differs from regions like Europe and North America, where they are primarily used for space heating. Given India’s warmer climate, the demand for conventional heating is lower. However, air-source heat pumps (ASHPs) and water heaters are gaining traction in urban areas due to their energy efficiency.

Additionally, the adoption of heat pumps is expanding in commercial sectors such as hotels, malls, and theatres. With continued advancements in technology and supportive regulatory policies, the demand for heat pumps is expected to remain strong, driving further market growth in the coming years.

Rising Electricity Demand Driving Energy-Efficient Solutions

India's electricity demand has surged to an all-time high of 250 GW in May 2024, with peak demand for FY’24 reaching 243 GW, marking a 13% Y-o-Y increase, the highest annual growth in three decades.

This sharp rise is fuelled by industrial expansion, urbanization, higher ambient temperatures increasing cooling needs, and the growing adoption of electric vehicles (EVs). As space cooling remains a major driver of electricity consumption, the demand for energy-efficient heating and cooling solutions, such as heat pumps, is expected to rise further.

India Price Trend for Heat Pumps in India

Heat pump prices in India vary based on the type of source used, that is the air source, water source, or ground source. Additional factors influencing pricing include system configuration (air-to-air, air-to-water, or ground-based) and capacity.

Typically, air-source heat pumps are the most affordable due to simpler installation and lower infrastructure requirements, whereas ground and water-source heat pumps tend to be costlier due to complex installation and operational efficiency factors.

India Heat Pump Industry Insights

India Heat Pump Market Revenue, 2021 – 2024E

India Heat Pump Market Recent Developments & Investments

Climaveneta's USD 47M Bengaluru Expansion

• Climaveneta Climate Technologies is investing approximately USD 47 million in a 23,000m² manufacturing facility in Narasapura, Bengaluru, to produce heat pumps and HVAC equipment.

• Announced in 2024, this initiative aims to establish the company as a key export hub, cater to regional demand, and double its order intake within five years.

Daikin's Expansion to Make India a Global Manufacturing Hub

• Daikin Industries plans to establish India as its largest manufacturing hub, aiming to nearly triple exports of Made-in-India products by 2025.

• The company seeks to expand its export reach from 30 markets in 2021 to 100 by 2025 while increasing the production of air conditioning and heat pump systems to cater to global demand.

Key Innovations by Leading Players in India's Heat Pump Market

A.O. Smith's Innovative Heat Pump Water Heaters

• A.O. Smith offers advanced heat pump water heaters featuring AES (Automatic Energy Saver) technology, smart controls to prevent cold water mixing, intelligent defrosting, and multiple heating modes.

• These heaters are designed for various applications, including residential and commercial settings, providing energy-efficient hot water solutions.

Daikin's Technology and Innovation Centre for Heat Pumps

• Daikin has established a Technology and Innovation Centre focusing on developing energy-efficient heat pump technologies.

• Their systems are designed to transfer heat effectively, providing energy-saving heating solutions suitable for various applications.

India Heat Pump Market by End Use Sector, % Share, 2024E

Growth of Industrial Heat Pumps in India

India’s industrial heat pump market is expanding rapidly, making up a significant share of the total heat pump market in 2024. The shift towards cleaner energy sources is driving adoption, with coal's share in industrial energy consumption declining while electricity usage is rising. This transition is boosting the use of heat pumps in manufacturing and processing industries.

Additionally, the agriculture sector, which consumes 17% of India's electricity, is increasingly adopting electric and solar-powered pumps, creating further opportunities for industrial heat pump deployment.

Future Outlook of India Heat Pump Market

The country's commitment to achieving half of its installed power capacity from non-fossil fuel sources by 2030 underscores its emphasis on decarbonization. This policy shift is expected to drive greater adoption of heat pumps as a sustainable alternative to traditional heating systems.

India is also set to nearly double its renewable energy capacity by 2027, with solar, wind, and hydropower playing key roles in this expansion. As the nation progresses toward its clean energy targets, the growing availability of renewable electricity will further support the use of heat pump technology across various sectors.

Additionally, a rapidly expanding middle class and increasing urbanization are expected to boost demand for energy-efficient heating and cooling solutions. As more people move to cities and disposable incomes rise, the preference for sustainable and cost-effective technologies like heat pumps is likely to strengthen, driving long-term market growth.

Scope of the Study for India Heat Pump Market

Makreo Research has recently released an in-depth study titled “India Heat Pump Market Size, Growth, and Forecast (2021-2030) Report – Share by End User (Residential, Commercial, Industrial), Technology (Air Source, Water Source, ground Source), Rated Capacity, and Type”. This report provides a thorough examination of historical trends and current market dynamics, highlighting key factors influencing the future growth of India’s heat pump industry. The study begins with key insights into India’s heating and cooling sector, exploring the impact of economic, political, and technological factors on market development. It covers recent advancements in heat pump technology, energy efficiency trends, and policy changes shaping the industry.

The report then offers a detailed performance analysis of India’s heat pump market, comparing it with other heating systems and assessing variations across different segments. It provides an in-depth evaluation of the residential, commercial, and industrial heat pump markets, with a particular focus on industrial applications, analyzing performance across multiple categories. Additionally, the study includes case studies of successful heat pump implementations in India, offering real-world insights into market adoption along with detailed company profiles of key players. It also presents a forward-looking analysis, identifying key challenges and emerging opportunities in the sector. Overall, this report equips stakeholders with a comprehensive understanding of market conditions, future growth prospects, and strategic decision-making opportunities in India’s heat pump industry.

India Heat Pump Market Segmentation

Companies Covered in the India Heat Pump Market

There are 15 players covered in this report. To know more, please reach out to sales@makreo.com