U.S. Air Source Heat Pump Market Projected to Reach $13.69 Billion by 2030
Washington, Tuesday, 25 November 2025.
The U.S. air source heat pump market is set to grow significantly, driven by rising demand for energy-efficient solutions and government incentives, despite high initial installation costs.
Market Drivers and Projections
The United States air source heat pump (ASHP) market is on track to expand from $8.15 billion in 2024 to an estimated $13.69 billion by 2030, reflecting a compound annual growth rate (CAGR) of 9.0% [1]. This growth is powered by increasing consumer preferences for energy-efficient and environmentally-friendly heating solutions. Government incentives, such as those mandated by the International Energy Conservation Code (IECC) and California’s Title 24, are crucial in this trend, promoting ASHPs as a low-carbon alternative to traditional HVAC systems [1].
Challenges in Adoption
Despite the promising growth, the high initial installation costs of air source heat pumps pose a significant challenge, particularly for low-to-middle-income households. While the long-term energy savings are evident, the upfront expenses can deter potential buyers. This financial barrier remains a critical obstacle, even as ENERGY STAR certified ASHPs offer up to 50% savings on annual heating and cooling energy bills, highlighting the need for enhanced financial incentives and support systems [1].
Impact of Electrification and Decarbonization
The shift toward electrification and decarbonization is another key market trend, with municipalities increasingly banning natural gas connections in new buildings. This regulatory shift accelerates the adoption of electric heating technologies like air source heat pumps. The move is part of a broader strategy to reduce carbon emissions and support the U.S. in achieving its net-zero goals [1].
Opportunities for Innovation
As the market evolves, opportunities for innovation abound, particularly in integrating hybrid systems that combine ASHPs with conventional heating technologies. These hybrid systems address efficiency challenges in colder climates, where traditional ASHPs may struggle. The market’s competitive landscape includes major players such as Daikin U.S. Corporation, Carrier Corporation, and Trane US, Inc., all of whom are investing in cutting-edge technology to stay ahead in this rapidly growing sector [1].