On 1 August 2025 Johnson Controls completed the USD 8.1 billion sale of its North American ducted HVAC business and its global residential joint venture with Hitachi to the Bosch Group, according to Johnson Controls’ completion release, moving one of the largest ducted and VRF heat pump portfolios in the world to a German owner. Douglas Insights values the HVAC heat pumps market at USD 68.6 billion in 2025 and forecasts USD 127 billion by 2035, a compound growth rate of 6.37% a year. The receipt is units times price: about 14.62 million space heating and cooling heat pumps sold for homes and commercial buildings in 2025 at an average manufacturer price of USD 4,690 per unit. The volume leg adds 6.8% a year as Europe, China and North America replace boilers, furnaces and air conditioners, and the price leg eases 0.4% a year as Chinese scale and cheaper inverters outweigh the shift to larger commercial systems. The study sits within Douglas Insights coverage of HVAC and building energy equipment and follows the published Douglas Insights research methodology.
Which heat pumps count as HVAC heat pumps in this study?
HVAC heat pumps in this study are electrically driven heat pumps that heat, and usually also cool, the air or water of a building, 14.62 million units worth USD 68.6 billion in 2025. The HVAC heat pumps market covers seven kinds of equipment: Air-to-water heat pumps, Ducted and split air-to-air heat pumps, VRF heat pump systems, Commercial rooftop and packaged heat pumps, Ground-source heat pumps, Water-source heat pumps, and Hybrid heat pump systems. It also splits value by building into Single-family homes, Multifamily buildings, Commercial buildings, and Public and institutional buildings, and by capacity into Up to 12 kW, 12 to 50 kW, and Above 50 kW.
Value is measured at manufacturer realised price, without installation or ground loops. Reversible room air conditioners bought mainly for cooling, cooling-only chillers, heat pump water heaters and process heat pumps are excluded. The homes-only view sits in the Residential Heat Pumps Market report, whose space heating categories add to about USD 42.4 billion, matching the residential part of this study. Installed borehole systems, including drilling, are valued in the Ground Source Heat Pumps Market report, and factory heat in the Industrial Heat Pump Systems Market report.
What did Bosch’s USD 8.1 billion purchase of the Johnson Controls and Hitachi business change for HVAC heat pumps?
The purchase moved about 4.1% of 2025 HVAC heat pumps market revenue to Bosch, Douglas Insights estimates, lifting Bosch Home Comfort to about 6.3% and into the top six suppliers. Johnson Controls received about USD 6.7 billion of the USD 8.1 billion total, and Hitachi kept certain ductless assets in Shimizu, Japan.
The deal matters to the HVAC heat pumps market in three ways. First, Bosch, a European boiler and air-to-water maker, gains a large North American ducted range just as US households swap furnaces and air conditioners for heat pumps. Second, it gains VRF heat pump systems and ductless lines built with Hitachi, a category growing 6.43% a year. Third, it mirrors Carrier’s purchase of Viessmann Climate Solutions, completed on 2 January 2024 and adding 12,000 employees, according to Carrier’s release. Both deals pair a European heat pump brand with a North American ducted business.
What drives HVAC heat pumps into homes, offices and schools?
Four forces add about 7.9 points a year to HVAC heat pumps unit growth, while restraints remove about 1.1 points, leaving 6.8%. European electrification comes first. Europe accounts for over 20% of global heat pump sales, and 2025 showed double-digit growth that continued into the first quarter of 2026, according to the International Energy Agency’s Heat Pump Monitor 2026. Douglas Insights estimates building codes, boiler replacement grants and gas network phase-down plans add about 2.4 points a year to HVAC heat pumps market volume, mostly through Air-to-water heat pumps, with Germany, France, Italy, Poland and the Nordic countries supplying most of the extra units.
Chinese and Asian building stock is the second driver. New offices, hospitals, schools and apartment towers in China, India and Southeast Asia specify VRF heat pump systems that heat in winter and cool in summer from one outdoor unit, and northern Chinese cities replace coal heating with air source units. Douglas Insights estimates Asia Pacific bought USD 28.3 billion of HVAC heat pumps in 2025 and adds about 2.1 points a year to global unit growth, as Chinese makers also cut prices for export ranges.
North American switching is the third driver. The IEA reports that, despite a decline in sales in 2025, US heat pumps outsold gas boilers for the fourth year in a row. Bosch’s 1 August 2025 purchase and Carrier’s Viessmann deal put more marketing money behind cold climate ducted units, and Douglas Insights estimates each US furnace and air conditioner pair replaced by one ducted heat pump adds a unit at about USD 2,346. The region adds about 1.6 points a year, mostly in the South, the Pacific Northwest and New England.
Cooling load is the fourth driver. A heat pump sells as an air conditioner that also heats, so rising cooling degree days in India, the Gulf, Southern Europe and the US Sun Belt pull buyers toward reversible systems at little extra cost. Douglas Insights estimates cooling-led purchases add about 1.8 points a year to volume through 2035, with Commercial rooftop and packaged heat pumps replacing gas-fired rooftop units on offices and stores.
What holds back HVAC heat pumps against gas boilers and furnaces?
The running-cost ratio is the first brake, removing about 0.5 points a year from HVAC heat pumps unit growth. A heat pump with a seasonal efficiency of 3 costs more to run than a gas boiler wherever electricity costs more than about three times gas per kilowatt-hour, a line that Germany, the United Kingdom and parts of the US Northeast sit close to, so buyers there need grants or cheap tariffs to switch.
Upfront cost and installer capacity are the second restraint. A whole-home air-to-water system often costs several times the equipment price once radiators, cylinders and electrical upgrades are added, and the end of US home energy credits after 2025 removed up to USD 2,000 of support per heat pump. Douglas Insights removes about 0.4 points a year for these costs and for shortages of trained installers.
Refrigerant change is the third restraint. Regulation (EU) 2024/573 on fluorinated gases, adopted on 7 February 2024 and applied from 11 March 2024, phases HFCs out of the EU by 2050, so manufacturers are redesigning ranges around propane and other low global warming potential refrigerants. Douglas Insights removes about 0.2 points a year from HVAC heat pumps market volume for product gaps during redesign.
Which HVAC heat pumps type carries the value, from air-to-water to VRF?
Air-to-water heat pumps carry the most HVAC heat pumps market value at 30.8% of 2025 revenue, USD 21.1 billion, while Hybrid heat pump systems grow fastest at 8.86% a year.
| Segment | Share of 2025 value | 2025 value | Growth to 2035 |
|---|---|---|---|
| Air-to-water heat pumps | 30.8% | USD 21.1 billion | 7.82% a year to USD 44.8 billion |
| Ducted and split air-to-air heat pumps | 27.4% | USD 18.8 billion | 4.63% a year to USD 29.5 billion |
| VRF heat pump systems | 19.6% | USD 13.4 billion | 6.43% a year to USD 25.1 billion |
| Commercial rooftop and packaged heat pumps | 8.3% | USD 5.69 billion | 5.18% a year to USD 9.43 billion |
| Ground-source heat pumps | 6.1% | USD 4.18 billion | 6.04% a year to USD 7.52 billion |
| Water-source heat pumps | 4.2% | USD 2.88 billion | 5.71% a year to USD 5.02 billion |
| Hybrid heat pump systems | 3.6% | USD 2.47 billion | 8.86% a year to USD 5.77 billion |
Air-to-water heat pumps are worth USD 21.1 billion in 2025. They feed radiators and underfloor loops, the standard heating layout in Europe, Korea and northern China, so they grow 7.82% a year as boilers retire.
Ducted and split air-to-air heat pumps are worth USD 18.8 billion in 2025. They dominate North America but grow only 4.63% a year because many sales replace an existing heat pump.
VRF heat pump systems are worth USD 13.4 billion in 2025. One outdoor unit serves dozens of rooms, which suits offices, hotels and hospitals, and the category grows 6.43% a year.
Commercial rooftop and packaged heat pumps are worth USD 5.69 billion in 2025. They replace gas-fired rooftop units on low-rise stores and schools and grow 5.18% a year.
Ground-source heat pumps are worth USD 4.18 billion in 2025 at the factory gate, before drilling. They grow 6.04% a year where shared ground loops and school projects spread the borehole bill.
Water-source heat pumps are worth USD 2.88 billion in 2025. They run on building water loops, rivers and district networks, and grow 5.71% a year.
Hybrid heat pump systems are worth USD 2.47 billion in 2025 and grow fastest, at 8.86% a year to USD 5.77 billion by 2035, because pairing a heat pump with a kept boiler or furnace lets older homes switch without new radiators.
How does capacity split HVAC heat pumps market value?
By capacity, Up to 12 kW units take about 58.3% of 2025 HVAC heat pumps market value, USD 40.0 billion, 12 to 50 kW units about 24.9%, USD 17.1 billion, and Above 50 kW units about 16.8%, USD 11.5 billion. The largest band grows fastest as VRF and commercial air-to-water plants replace gas boilers in apartment blocks and campuses.
How do homes, offices and public buildings divide HVAC heat pumps spending?
Single-family homes take 47.2% of 2025 HVAC heat pumps market value, USD 32.4 billion, the largest share of any building group. Multifamily buildings take 14.6%, USD 10.0 billion, as landlords in Europe and China fit communal air-to-water plants and VRF systems. Commercial buildings take 26.9%, USD 18.4 billion, led by offices, retail, hotels and data-hall support space. Public and institutional buildings take 11.3%, USD 7.75 billion, and grow fastest at about 7.6% a year because schools, hospitals and government offices face public decarbonisation targets and can finance ground and water loops over decades.
Which region buys the most HVAC heat pumps, and which grows fastest?
Asia Pacific is the largest HVAC heat pumps region at USD 28.3 billion in 2025, 41.3% of the HVAC heat pumps market, and grows 5.88% a year to USD 50.1 billion by 2035. China makes and buys the most units, and VRF heat pump systems are the default in new Asian commercial towers.
Europe is the fastest region, at USD 16.9 billion in 2025 and 8.08% a year to USD 36.7 billion by 2035. Double-digit growth in 2025, boiler replacement grants and the refrigerant rules that push buyers toward new propane units all favour the region.
North America spends USD 19.1 billion in 2025 and grows 5.17% a year to USD 31.6 billion, the slowest region, because the end of US home energy credits after 2025 and high replacement ratios temper new demand even as Bosch and Carrier invest. Latin America spends USD 2.19 billion and grows 7.14% a year to USD 4.37 billion, led by Brazil, Mexico and Chile. The Middle East and Africa is the wildcard at USD 2.13 billion in 2025 and 7.63% a year to USD 4.43 billion, because Gulf district cooling and new cities could switch to reversible VRF and water-source plants quickly.
Which companies build HVAC heat pumps, and how concentrated is supply?
Douglas Insights estimates Daikin holds about 12.7% of 2025 HVAC heat pumps market revenue, and the top three suppliers hold about 29.4%.
| Company | HQ | What its position is built on | Est. share |
|---|---|---|---|
| Daikin Industries | Osaka, Japan | VRV systems, Altherma air-to-water units and Goodman ducted ranges | 12.7% |
| Midea Group | Foshan, China | Split, VRF and air-to-water units, plus own-brand and OEM supply | 9.3% |
| Gree Electric Appliances | Zhuhai, China | Chinese residential and commercial scale in splits and VRF | 7.4% |
| Mitsubishi Electric | Tokyo, Japan | Cold climate ductless units, City Multi VRF and Ecodan air-to-water | 7.0% |
| Carrier Global | Palm Beach Gardens, United States | Carrier ducted and rooftop ranges plus Viessmann Vitocal heat pumps | 6.4% |
| Bosch Home Comfort | Gerlingen, Germany | Bosch and Buderus air-to-water units plus the former Johnson Controls and Hitachi ranges | 6.3% |
| Samsung, LG, Panasonic, Trane, Vaillant, NIBE, Haier and others | Various | Regional ranges, rooftop units and ground-source specialists | 50.9% |
Advantage in the HVAC heat pumps market rests on compressor and inverter supply, installer networks and refrigerant readiness. Asian makers win on scale, while European and US groups buy distribution, as Bosch did for USD 8.1 billion.
What price does an HVAC heat pump fetch at the factory gate?
An HVAC heat pump sold for an average USD 4,690 at manufacturer level in 2025, and Douglas Insights expects about USD 4,506 by 2035. Ducted and split units average about USD 2,346, air-to-water units about USD 5,150 and ground-source units about USD 10,200 before the loop, while VRF heat pump systems average about USD 14,450 per outdoor system and commercial rooftop units about USD 13,550. The average HVAC heat pumps market price eases 0.4% a year because Chinese output and cheaper inverter electronics lower like-for-like prices by about 1.5% a year, only partly offset by the shift toward larger commercial and propane units.
Which rules on refrigerants and efficiency shape HVAC heat pumps?
Refrigerant and efficiency rules touch about 68% of 2025 HVAC heat pumps market value, Douglas Insights estimates, the share sold in Europe, North America, Japan and Korea. In the EU, Regulation (EU) 2024/573 replaced the 2014 F-gas rules, and the European Commission’s F-gas page confirms it was adopted on 7 February 2024, started to apply on 11 March 2024 and phases HFCs out of the EU by 2050. Its shrinking HFC quotas steer makers toward propane monobloc air-to-water units.
In the United States, the Environmental Protection Agency’s Technology Transitions program restricts high global warming potential HFCs sector by sector, with compliance deadlines that vary by subsector, which moved residential ducted ranges from R-410A to R-454B and R-32. Minimum efficiency standards and energy labels in the EU, US, China and Japan add a second layer that removes the least efficient units from sale.
How many units of heat does an HVAC heat pump deliver per unit of electricity?
HVAC heat pumps typically deliver 3 to 4.5 units of heat per unit of electricity over a season, against about 0.9 for a condensing gas boiler, and the IEA estimates heat pumps cover around 12% of space heating needs globally. Air-to-water units reach the top of that band in well insulated homes with underfloor heating, while cold climate ducted units hold above 2 at minus 15 degrees Celsius. That efficiency is why the HVAC heat pumps market grows even where electricity is dear: a household moving from oil or propane heat typically cuts its heating bill by 30% to 50%.
How large could the HVAC heat pumps market be in 2035 under each electrification path?
The base case takes the HVAC heat pumps market to USD 127 billion by 2035, inside a range of USD 90.8 billion to USD 170 billion. The slower case assumes grant cuts copy the end of US home credits and gas stays cheap, setting the volume leg at 4.1% and the price leg at minus 1.2% for USD 90.8 billion. The faster case assumes Europe keeps double-digit growth and China mandates heat pumps in new public buildings, with legs of 9.1% and 0.4% for USD 170 billion. Each 1-point change in the volume leg moves the 2035 figure by about USD 12.4 billion. The IEA’s Current Policies Scenario lifts heat pump sales by about 80% by 2035 from 108 GW in 2025, about 6.0% a year, and its stated policies case more than doubles them, so the Douglas Insights volume leg of 6.8% sits between the two. Published growth estimates run from about 5.4% to 9.4% a year; the 6.37% revenue figure sits in the lower half because the price leg is negative.
Douglas Exclusive: the HVAC heat pumps refrigerant transition matrix
The refrigerant transition matrix maps 14.62 million HVAC heat pumps sold in 2025 by refrigerant, equipment kind and region, and tracks each maker’s range against the date its current refrigerant faces restriction. The matrix shows that R-32 carried about 46% of 2025 units, R-410A about 23%, R-454B about 11%, propane about 13% and CO2 and other refrigerants about 7% of the total. Propane rises to about 29% of units by 2030 in the base case, and to about 61% of European air-to-water units. The matrix also shows that about 3.4 million units sold in 2025 used a refrigerant that will face a placing-on-market limit in at least one major market before 2030. Douglas Insights uses the 14.62 million-unit matrix to time product gaps in each region in the restraint model, to size the 0.2-point refrigerant drag and to flag which suppliers carry the most redesign risk across the HVAC heat pumps market.
Methodology and receipts: how do 14.62 million units add up to USD 68.6 billion?
How this report is built
- Every figure carries a confidence grade in the fact sheet above, and the working model ships with every licence.
- Five regional models sum to the global figure, with country tables in the Excel model.
- The next scheduled review of this study is December 2026.
- Licence holders receive it as a maintained tab in the Excel model.
The HVAC heat pumps market model multiplies about 14.62 million units sold in 2025 by an average manufacturer price of USD 4,690, giving USD 68.6 billion. Unit counts come from national heat pump association statistics, customs data and manufacturer disclosures in 32 countries, checked against the IEA’s 108 GW of 2025 heat pump sales. Prices come from distributor lists, tender awards and supplier disclosures, weighted by equipment kind, capacity band and region. The forecast compounds 6.8% unit growth and a 0.4% annual price decline to about 28.2 million units at about USD 4,506 each, and USD 127 billion, in 2035.
Sources
- Johnson Controls (investor release) Johnson Controls completes sale of residential and light commercial HVAC business (2025)
- International Energy Agency Heat Pump Monitor 2026: Key findings (2026)
- EUR-Lex, Publications Office of the European Union Regulation (EU) 2024/573 on fluorinated greenhouse gases (2024)
- European Commission, DG Climate Action F-gas legislation (2024)
- Carrier Global (investor release) Carrier completes acquisition of Viessmann Climate Solutions (2024)
- U.S. Environmental Protection Agency Technology Transitions program (2025)
Inside the 219-page report
011. Executive summary 3 sections
Verdict, headline table and takeaways.
- 14.62 million units at USD 4,690
- Volume 6.8% and price minus 0.4%
- Takeaways
022. Research methodology 3 sections
How the unit and price model is built.
- 32 countries
- 108 GW cross-check
- Price weighting
033. Market definition and scope 3 sections
Which heat pumps count.
- Seven equipment kinds
- Exclusions
- Adjacent reports
044. The Bosch and Johnson Controls deal 3 sections
Completed on 1 August 2025.
- USD 8.1 billion
- Hitachi joint venture
- Carrier and Viessmann
055. Market drivers 4 sections
Forces behind unit growth.
- European electrification
- Asian building stock
- North American switching
- Cooling load
066. Market restraints 3 sections
What holds uptake back.
- Running-cost ratio
- Upfront cost and installers
- Refrigerant change
077. Market by equipment 4 sections
Seven kinds valued.
- Air-to-water
- Ducted and split
- VRF
- Rooftop, ground, water and hybrid
088. Market by capacity 3 sections
Three capacity bands.
- Up to 12 kW 58.3%
- 12 to 50 kW 24.9%
- Above 50 kW 16.8%
099. Market by building 3 sections
Homes, commercial and public.
- Single-family 47.2%
- Commercial 26.9%
- Public and institutional 11.3%
1010. Regional analysis 5 sections
Five regional models.
- Asia Pacific
- Europe
- North America
- Latin America
- Middle East and Africa
1111. Competitive landscape 4 sections
Suppliers and shares.
- Daikin
- Midea
- Gree
- Mitsubishi Electric, Carrier, Bosch
1212. Pricing 3 sections
Factory-gate price by equipment.
- USD 4,690 average
- Ducted USD 2,346
- VRF USD 14,450 per system
1313. Regulation 3 sections
Refrigerants and efficiency.
- Regulation (EU) 2024/573
- US Technology Transitions
- Efficiency labels
1414. Efficiency and running cost 3 sections
Heat delivered per unit of electricity.
- 3 to 4.5 seasonal
- 12% of heating needs
- Bill savings
1515. Forecast and scenarios 3 sections
Base case and range to 2035.
- Base USD 127 billion
- Slower USD 90.8 billion
- Faster USD 170 billion
1616. Douglas Exclusive: the refrigerant transition matrix 3 sections
Units by refrigerant and restriction date.
- R-32 46%
- Propane 13% to 29%
- 3.4 million exposed units
Questions buyers ask
How big is the HVAC heat pumps market?
USD 68.6 billion in 2025, on about 14.62 million heat pumps sold for homes and commercial buildings at an average manufacturer price of USD 4,690.
How fast will the HVAC heat pumps market grow?
6.37% a year, reaching USD 127 billion by 2035, as units grow 6.8% a year and the average price eases 0.4% a year.
Which equipment is the largest?
30.8% of 2025 value, USD 21.1 billion, comes from air-to-water heat pumps, the standard heating layout in Europe, Korea and northern China.
Which segment grows fastest, and why?
8.86% a year for hybrid heat pump systems, to USD 5.77 billion by 2035, because pairing a heat pump with a kept boiler lets older homes switch without new radiators.
Which region grows fastest, and why?
8.08% a year for Europe, from USD 16.9 billion to USD 36.7 billion, on double-digit growth in 2025, boiler replacement grants and the refrigerant transition.
Who leads the HVAC heat pumps market?
12.7% of 2025 revenue goes to Daikin; with Midea and Gree the top three hold about 29.4%, while Bosch rose to about 6.3% after its USD 8.1 billion purchase.
How does this report relate to the residential heat pumps study?
USD 42.4 billion of this market is homes, matching the space heating categories of the Residential Heat Pumps Market report; this study adds offices, stores, schools and hospitals.
What does an HVAC heat pump cost at the factory gate?
USD 4,690 on average in 2025; ducted and split units average about USD 2,346, air-to-water units about USD 5,150 and VRF heat pump systems about USD 14,450.
Research & citation
This report was researched, written and reviewed by the Douglas Insights Research Desk under the Douglas Insights editorial standards. Material errors are logged in the corrections log. No section is sponsored.
Douglas Insights Inc (2026). HVAC Heat Pumps Market. Report DI-EP-10333, September 2026. https://www.douglasinsights.com/hvac-heat-pumps-market/