China Heat Pump Market Research Report: Forecast (2026-2032)

China Heat Pump Market Report Key Takeaways:

• The China Heat Pump Market size was valued at around USD 13.31 billion in 2025 and is projected to reach USD 22.59 billion by 2032. The estimated CAGR from 2026 to 2032 is around 9.6%, indicating strong growth.
• By type, the air source heat pumps represented 85% of the China Heat Pump Market size in 2025.
• By end user, the residential sector seized around 72% of the China Heat Pump Market in 2025.
• The leading heat pump companies are Gree Electric Appliances, Inc., Daikin Industries, Ltd., Mitsubishi Electric Corporation, Hien New Energy Equipment Co., Ltd, Ariston Holding N.V., LG Electronics, Panasonic Corporation, PHNIX Eco-Energy Solution Ltd., NIBE Industrier AB, Vaillant Group, Midea Group Co., Ltd., and others.

Market Insights & Analysis: China Heat Pump Market (2026-2032):

The China Heat Pump Market size was valued at around USD 13.31 billion in 2025 and is projected to reach USD 22.59 billion by 2032. Along with this, the market is estimated to grow at a CAGR of around 9.6% during the forecast period, i.e., 2026-32. The China Heat Pump Market is positioned for steady long‑term growth as energy transition and decarbonisation policies intensify. As of 2023, China was the largest heat pump market globally, accounting for over 25% of worldwide installed capacity and sales, with more than 250 GW installed in buildings, a testament to broad residential and commercial uptake .

Government initiatives supporting clean heating, such as subsidies for low‑temperature air‑source heat pumps in rural areas, are lowering upfront costs and encouraging households to shift from coal‑based systems. Meanwhile, efficiency improvements and product innovation like advanced low‑temperature and ultra‑high‑temperature systems are broadening heat pump applicability across industry, commercial buildings, and new construction.

Under China’s carbon neutrality commitments aligned with the IEA’s Announced Pledges Scenario, heat pump capacity could increase to 1,400 GW by 2050, covering approximately 25% of building heat demand, requiring average installations of about 100 GW annually. To support this, cumulative investment in heat pumps for buildings might need to triple to about USD 30 billion annually by 2030 and continue climbing thereafter.

By 2032, the market is gaining significant growth in installed capacity and adoption rates, powered by sustained policy support, technological improvements, and integration with clean electricity grids. Continued government targets for energy efficiency and electrified heating will likely reinforce the heat pump market’s role in China’s broader energy transformation, enabling more resilient and lower‑carbon thermal infrastructure.

China Heat Pump Market Recent Developments:

• April 2025: China’s National Development and Reform Commission and five ministries issued a comprehensive Heat Pump Industry Action Plan to boost high-quality growth. It aims to improve energy efficiency by ≥20%, achieve technological breakthroughs (high-temperature pumps, compressors, next-gen refrigerants), and expand heat pump use across construction, industry, agriculture, and transport.
• December 2025: Chinese Academy of Sciences researchers developed a thermoacoustic Stirling cycle heat pump prototype offering a peak performance coefficient of 1.68 and suitability for high-temperature industrial heating (e.g., petrochemical, metallurgy). This innovation could open new markets beyond space heating.

China Heat Pump Market Scope:

China Heat Pump Market Drivers:

Favorable Government Policies

Government policy and public funding in China are increasingly steering the nation’s energy transition toward cleaner, electrified heating solutions like heat pumps, a trend supported by official targets and subsidy frameworks tied to carbon-reduction goals. Central to this effort is China’s “1+N” policy system for carbon peaking and neutrality, which mandates structural shifts in energy consumption and carbon intensity. Under these top-level directives, by 2030, China aims to substantially lower energy use per unit of GDP and cut carbon emissions relative to 2005, while increasing the proportion of non-fossil energy toward 25% or higher a regulatory environment that strongly favours heat pump deployment over fossil-based heating .

Alongside strategic decarbonization targets, 2025 saw intensified policy support at national and local levels, with multiple government bodies issuing guidance to boost clean heating, energy efficiency, and heat pump adoption. A key focus has been on integrating heat pumps into wider clean heating and energy system reforms, where heat pumps are highlighted as part of modern, green district energy systems and renewable heating infrastructure. In urban and rural areas alike, renewable heat technologies such as air-source heat pumps have been promoted to reduce coal reliance and improve public health through lower emissions.

China’s clean heating policy landscape also includes budgetary investment mechanisms, like the central government’s “Special Administrative Measures for Central Budget Investment in Energy Conservation and Carbon Reduction”, which allocates up to 20% of verified investment costs for energy efficiency and low-carbon conversions in key sectors, including heat pumps for industrial and infrastructure applications, thereby lowering capital barriers for large-scale adoption.

Furthermore, regulatory frameworks tied to the 2030 carbon peak and 2060 carbon neutrality goals include enhanced pricing reforms for renewable electricity that make electrified heat pump operation more cost-competitive, and ongoing integration of heat pumps within smart grid and green building standards. These policies are designed to foster continued heat pump market growth into the 2030s and beyond, as China’s electricity becomes increasingly low-carbon and heating electrification becomes essential to climate targets.

Overall, China’s government policies, from carbon neutrality commitments to targeted subsidies and investment rules, are creating a regulatory and financial ecosystem that favors heat pump deployment over fossil heat sources. These measures lower adoption barriers, reduce lifecycle costs, and align market incentives with nationwide clean energy goals, thereby accelerating heat pump market expansion domestically and supporting long-term structural growth.

China Heat Pump Market Trends:

Technological Innovations & Efficiency Improvements Gaining Traction

A defining trend in China’s heat pump industry is accelerating technological innovation combined with significant efficiency improvements, driven by both industry advancements and government support. In 2025, leading manufacturers have unveiled new technologies that push performance boundaries and broaden application potential.

At the ISH China & CIHE 2025 exhibition in Beijing, Midea Building Technology formally launched a green industrial high‑temperature heat pump solution targeting industrial heating needs. These new systems are engineered to deliver stable high‑temperature heat output, helping factories reduce energy use and CO₂ emissions while replacing conventional fossil fuel‑based processes. This represents a strategic shift toward decarbonizing industrial sectors through electrified heat technologies.

Another notable technological advancement comes from SolarEast Heat Pump Ltd., which invested roughly USD 17 million to open a cutting‑edge Zero‑Carbon Laboratory in Beijing. This facility with 30 advanced testing labs focuses on improving R290 heat pump system integration and performance, enabling more efficient, low‑carbon solutions for residential & commercial markets .

In addition, Chinese manufacturer Fairland introduced an AI‑based residential heat pump featuring a Coefficient of Performance (COP) of 7, one of the highest efficiency ratings seen in the market. This innovation delivers much greater energy savings than conventional models, significantly reducing electricity use for owners .

These technology launches show how domestic innovation is elevating heat pump efficiency and widening use cases from industrial to smart residential systems, aligning with clean energy goals and reinforcing China’s leadership in heat pump technology advancement.

China Heat Pump Market Challenges:

High Upfront Costs & Installation Complexities

One major challenge slowing heat pump adoption is the high initial investment and complex installation requirements, which remain significant barriers despite long‑term operational savings. According to the International Energy Agency (IEA), the upfront costs of heat pump systems, especially industrial and larger residential units, are often significantly higher than conventional gas boilers, sometimes exceeding six times the initial investment for comparable heating capacity. This makes it difficult for consumers and businesses to justify switching, even though lifetime savings may be greater.

Heat pumps also require precise sizing, system design, and skilled installation, which adds to total project costs and complexity. In China, the industry is still developing a sufficiently large workforce of trained installers, while many regions lack standardized technical guidance and certified installer networks, making adoption more challenging for property owners unfamiliar with these systems. Experts note that installation and commissioning costs can be a substantial share of total investment and require expertise beyond traditional boiler or furnace setups.

Furthermore, reports from China’s energy press highlight that low‑carbon heating technologies such as heat pumps currently have a higher per‑unit heat cost (50.42–66.05 CNY/GJ) compared with conventional fossil‑fuel combinations, reflecting the economic stresses of upfront equipment and infrastructure costs.

As China expands heat pump deployment, reducing these barriers through financing instruments, training programmes, and streamlined installation standards will be critical for wider market penetration and help achieve clean heating targets.

China Heat Pump Market (2026-32) Segmentation Analysis:

The China Heat Pump Market Report and Forecast 2026-2032 offers a detailed analysis of the market based on the following segments:

Based on Type:

• Air-Source Heat Pumps
  • Air-to-Air
  • Air-to-Water
• Water-Source Heat Pumps
• Ground-Source (Geothermal) Heat Pumps
• Hybrid-Source Heat Pumps

Air-source heat pumps dominate the China heat pump industry, accounting for around 85% market share. Their popularity stems from ease of installation, lower upfront costs, and adaptability to various building types, including residential and commercial properties. Unlike water-source or ground-source systems, air-source units require minimal groundworks or water-loop infrastructure, reducing installation complexity and project timelines. They are also highly compatible with China’s ongoing clean-heating initiatives and rural electrification programs, making them a practical choice for both new constructions and retrofits.

Additionally, technological advancements, such as high-efficiency compressors and low-temperature performance improvements, have further strengthened their market position by increasing energy savings and reliability across diverse climatic conditions.

Based on End Users:

• Residential
• Commercial
• Industrial

The residential segment leads the China heat pump industry, holding around 72% market share. This dominance is driven by government incentives for low-carbon heating in homes, particularly in rural and urban residential areas, where subsidies help offset upfront costs. Residential applications benefit from compact, efficient systems suitable for space heating, cooling, and domestic hot water. Rising awareness of energy efficiency, coupled with the need to replace traditional coal-based heating systems, has accelerated adoption.

The combination of government-backed policies, technological improvements, and ease of installation has positioned residential users as the primary market for heat pump deployment.

China Heat Pump Market (2026-32): Regional Projection

The China Heat Pump Market is dominated by eastern and northern provinces, particularly Shandong, Jiangsu, Guangdong, and the Beijing-Tianjin-Hebei regions. These regions lead due to a combination of high population density, rapid urbanization, and strong industrial and residential heating demand. Urban areas have significant investments in modern residential complexes, commercial buildings, and industrial facilities, all requiring efficient heating and cooling solutions. Local governments in these provinces also offer subsidies and incentives for low-carbon heating technologies, including air-source and water-source heat pumps, to meet carbon-reduction targets. Industrial clusters in Shandong and Jiangsu further adopt heat pumps for process heating, driven by energy efficiency and cost-saving objectives.

Additionally, well-developed infrastructure, availability of skilled installers, and greater consumer awareness of energy-efficient systems reinforce adoption in these regions. Consequently, these provinces account for the largest share of both residential and industrial heat pump installations in China, making them the primary market drivers.

Gain a Competitive Edge with Our China Heat Pump Market Report

• China Heat Pump Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
• This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
• China Heat Pump Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

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