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U.S. Heat Pump Market Trends (2025-2026)

U.S. heat pump market: USD 14.15B (2025) to USD 35.33B (2030) at 20.1% CAGR (MarketsandMarkets). AHRI: 3.64M air-source units in 2025, still ahead of gas. Hardware gaps for startups.

September 8, 20266 min read

Konstantin Dolgan

Written by Konstantin Dolgan, Ph.D., NPDP

Founder & CEO, Product Development Engineer

Published September 8, 2026

A startup-usable snapshot of building electrification hardware

~USD 14.1B to ~USD 35.3B
U.S. heat pump market value, 2025 to 2030, at roughly 20.1% CAGR
MarketsandMarkets
3.64M
U.S. air-source heat pump units shipped in 2025 (still ahead of gas furnaces)
AHRI via ACHR News
~20%
Share of U.S. households that rely on a heat pump for space heating
IEA Heat Pump Monitor 2026

This report covers air-source, ground-source, and related heat pump systems for space heating, cooling, and water heating in the United States. It is written for inventors, hardware startups, and product teams deciding where to build next. It does not cover vehicle HVAC.

In one line: MarketsandMarkets values the U.S. heat pump market at about USD 14.15 billion in 2025, projected to reach about USD 35.33 billion by 2030 at roughly 20.1% CAGR. AHRI shipment data shows 3.64 million air-source heat pumps shipped in 2025, still ahead of gas warm-air furnaces for the fourth straight year, even after an 11.6% unit decline from 2024.

Every figure below is traceable to a named source in the Sources section. Where monitors disagree, we show the range and say so. Browse all of our free reports on the Market Reports index.

Market Size and Growth

Revenue size (named market report)

MarketsandMarkets (U.S. Heat Pump Market geography page) values the U.S. market at about USD 14,147.9 million in 2025, projected to reach about USD 35,330.2 million by 2030, a CAGR of roughly 20.1% from 2025 to 2030. Intermediate points on the same series: about USD 16.50B (2026), USD 19.51B (2027), USD 23.40B (2028), USD 28.52B (2029).

End-user split in 2025 (same MarketsandMarkets U.S. table): residential about USD 10.49B, commercial about USD 2.77B, industrial about USD 0.89B. By 2030 the same source projects residential about USD 26.49B (CAGR ~20.4%), commercial about USD 6.76B (~19.6%), industrial about USD 2.09B (~18.5%).

For global context only (do not mix with U.S. figures): BCC Research puts global heat pumps at USD 88.4B in 2024 and USD 93.2B in 2025, reaching USD 134.8B by 2030 at 7.7% CAGR. Prefer the U.S. MarketsandMarkets series for U.S. pitch decks.

Unit Shipments (Ahri Trade Data)

  • Air-source heat pumps: 3.64 million units in 2025, down 11.6% from 4.12 million in 2024 (AHRI via ACHR News).
  • Gas warm-air furnaces: 3.25 million units in 2025, up 4.1% from 3.12 million in 2024.
  • Heat pumps outsold gas furnaces by about 11% in 2025. IEA and Canary Media describe four consecutive years ahead of gas.
  • Combined central AC + heat pumps: 7.75 million in 2025, down 20% from 9.68 million in 2024. Central AC alone: 4.10 million, down 26.2% from 5.56 million.

IEA Global Energy Review 2026 notes U.S. heat pump sales fell around 13% in 2025 (aligned with the AHRI decline). Drivers cited include the A2L refrigerant transition (all U.S.-made units after Jan 1, 2025), refrigerant shortages, and slower new housing. Heat pumps still outsold gas boilers and furnaces for the fourth year in a row.

MIT Technology Review (July 2026), citing AHRI and UC Berkeley analysis, reports heat pumps outpaced natural-gas furnaces by about 32% in Q1 2026 even after the federal Section 25C tax credit ended for property placed in service after Dec 31, 2025.

Installed Stock Context (Iea)

IEA Heat Pump Monitor 2026 key findings: the United States has the largest installed heat pump stock among major markets. Over 20% of U.S. households now rely on a heat pump for space heating, and around 90% of households use air conditioning. Replacement of cooling-only AC with reversible heat pumps is a scalable pathway; IEA estimates around two-thirds of U.S. homes already have enabling conditions for that shift.

Growth Drivers

  • Building electrification and dual heating/cooling value (one outdoor unit can replace furnace plus AC in many climates).
  • End-of-life air conditioner replacement with reversible heat pumps (IEA).
  • Cold-climate heat pump performance gains and hybrid or dual-fuel systems for colder regions.
  • State and utility rebate programs that remain after the federal 25C sunset for new 2026 installs.
  • Low-GWP / A2L refrigerant redesign cycle forcing product refresh across OEMs.
  • Heat pump water heaters expanding the addressable market beyond space conditioning.
  • Commercial and light-industrial higher-capacity systems as a secondary growth band.

Key Segments

By end user (MarketsandMarkets U.S. 2025): residential is the bulk of dollar value, then commercial, then industrial.

By technology: air-source dominates U.S. unit volume (AHRI tracks air-source shipments). Ground-source / geothermal and air-to-water remain smaller but high-ticket niches.

By hardware stack: outdoor units and compressors (OEM-dominated), indoor air handlers and coils, heat pump water heaters, controls and thermostats, sensors and leak detection for A2L refrigerants, line-set and install tooling, dual-fuel switchover controls, enclosures and noise attenuation, and commissioning / diagnostics software.

Where Startups Are Building

The opportunity categories below keep showing up in contractor and OEM conversations. They are product categories, not a ranked company list.

  • Cold-climate and high-efficiency outdoor units for retrofit form factors
  • Heat pump water heaters and compact hybrid tanks for multifamily
  • Dual-fuel and hybrid controls that switch cleanly between heat pump and backup furnace
  • A2L-safe sensors, leak detection, and installer tools
  • Quiet outdoor enclosures and vibration isolation for dense housing
  • Right-sizing / load-calc software and commissioning apps for contractors
  • Packaged rooftop and light-commercial heat pump skids

Risks and Constraints

  • Policy swing. Federal Section 25C Energy Efficient Home Improvement Credit ended for property placed in service after Dec 31, 2025 (IRS). State HEAR/HOMES and utility rebates vary by location and funding status.
  • Upfront cost versus gas furnaces, plus electrical panel upgrades for some homes.
  • Refrigerant transition. A2L inventory destocking after 2024 pre-buy distorted 2025 shipments (AHRI / RMI / ACHR News).
  • Installer capacity and training for heat pumps and A2L handling.
  • Electricity-to-gas price ratios that can weaken operating-cost economics in some regions.
  • Housing starts and interest rates affecting replacement and new-construction demand.

What This Means for Product Development

A few practical implications for inventors and hardware teams entering heat pumps:

  • Design for the A2L / low-GWP era from the first layout review (leak sensing, charge limits, serviceability).
  • Treat install ergonomics and commissioning time as product features; contractor labor is often the binding constraint.
  • Dual-fuel and hybrid controls are a realistic entry point for smaller teams versus competing on full outdoor-unit platforms.
  • Noise, form factor, and multifamily packaging decide which products get HOA and retrofit approvals.
  • Water-heater and light-commercial form factors may be less crowded than residential split systems for new entrants.

If you are scoping hardware in this space, our pages on industrial product design and development, electronic product development, and rapid prototyping describe how we take products like these from sketch to production. Related snapshots: EV charging and U.S. BESS.

Key Takeaways

  • U.S. heat pump market about USD 14.1B in 2025, heading toward about USD 35.3B by 2030 (~20.1% CAGR, MarketsandMarkets).
  • AHRI: 3.64M air-source units shipped in 2025, still ahead of 3.25M gas furnaces despite an 11.6% unit decline.
  • IEA: over 20% of U.S. households heat with a heat pump; AC replacement is a major runway.
  • Federal 25C sunset for new 2026 installs shifts incentive risk to state and utility programs.
  • Accessible product gaps sit in controls, A2L safety sensing, water heaters, dual-fuel switchover, and install/commissioning tooling.

Sources

Key metrics at a glance

Every figure below appears in the report above. Unit shipments and dollar market size come from different source families, so both are shown.

Key U.S. heat pump metrics by year and source
MetricValueYearSource
U.S. heat pump market sizeUSD 14.15 billion2025MarketsandMarkets
U.S. heat pump market sizeUSD 35.33 billion2030MarketsandMarkets
U.S. heat pump market CAGR20.1%2025-2030MarketsandMarkets
Residential end-user valueUSD 10.49 billion2025MarketsandMarkets
Commercial end-user valueUSD 2.77 billion2025MarketsandMarkets
Industrial end-user valueUSD 0.89 billion2025MarketsandMarkets
Air-source heat pump shipments3.64 million units2025AHRI via ACHR News
Gas warm-air furnace shipments3.25 million units2025AHRI via ACHR News
Households heating with a heat pump>20%2026 monitorIEA

Table: Key U.S. heat pump metrics, with the source behind each figure.

2025 end-user value by segment

MarketsandMarkets U.S. end-user split for 2025, in USD billions. Residential dominates dollar value.

  • Residential: USD 10.4874B
  • Commercial: USD 2.7656B
  • Industrial: USD 0.8949B

Source: MarketsandMarkets U.S. Heat Pump Market geography table, 2025. Residential 10.4874, commercial 2.7656, industrial 0.8949 (USD billions).

U.S. heat pump market path, 2025-2030

MarketsandMarkets U.S. market value series in USD billions, about 20.1% CAGR from 2025 to 2030.

Source: MarketsandMarkets U.S. Heat Pump Market. Series: 14.1479, 16.5038, 19.5119, 23.4045, 28.5151, 35.3302 (USD billions, 2025-2030).

Questions founders ask about the heat pump market

What is the U.S. heat pump market size?

MarketsandMarkets values the U.S. heat pump market at about USD 14.15 billion in 2025 and projects it to reach about USD 35.33 billion by 2030. Residential systems account for most of that dollar value, followed by commercial and industrial.

What is the U.S. heat pump CAGR?

MarketsandMarkets projects a compound annual growth rate of about 20.1% from 2025 through 2030 for the U.S. market. Intermediate points on the same series are about USD 16.50B in 2026, USD 19.51B in 2027, USD 23.40B in 2028, and USD 28.52B in 2029.

Did heat pumps still outsell gas furnaces in 2025?

Yes. AHRI data via ACHR News shows 3.64 million air-source heat pumps shipped in 2025 versus 3.25 million gas warm-air furnaces. Heat pump units fell 11.6% from 4.12 million in 2024, while gas furnaces rose 4.1% from 3.12 million, but heat pumps remained ahead for a fourth straight year.

How common are heat pumps in U.S. homes?

IEA Heat Pump Monitor 2026 key findings say over 20% of U.S. households rely on a heat pump for space heating, and around 90% of households use air conditioning. Replacing cooling-only AC with reversible heat pumps is a major runway.

What happened after the federal 25C tax credit ended?

The federal Section 25C Energy Efficient Home Improvement Credit ended for property placed in service after December 31, 2025. MIT Technology Review (July 2026), citing AHRI and UC Berkeley analysis, still reported heat pumps outpacing natural-gas furnaces by about 32% in Q1 2026.

Where can hardware startups enter the heat pump market?

Accessible gaps often sit around full outdoor-unit platforms rather than competing with them directly: dual-fuel and hybrid controls, A2L leak sensing and installer tools, heat pump water heaters, quiet outdoor enclosures, right-sizing and commissioning software, and light-commercial packaged skids.

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