Geothermal heat pumps or geoexchange technology relies on constant temperatures of the earth for heating and cooling purposes. They are used as a renewable and sustainable alternative to conventional air source heat pumps and traditional heating and cooling systems. Geoexchange systems take advantage of the relatively constant temperature below the earth’s surface, exchanging heat between the air inside a home or building and the ground surrounding it, without any fossil fuels or combustion involved. This allows them heat or cool homes and buildings more efficiently than other heating and air conditioning systems.
Geothermal heat pumps use a series of underground pipes filled with antifreeze mixture which absorbs heat from the ground in winter and rejects heat during summer. The liquid circulates through underground pipes and carries the heat between the building HVAC system and the earth. They utilize surrounding soil, bedrock or groundwater as a heat source and heat sink which provides heating in winter and cooling in summer. This renewable technology improves energy efficiency, lowers operating costs and reduces carbon footprint compared to conventional HVAC systems which rely on fossil fuels.
The global geothermal heat pumps market is estimated to be valued at US$ 11.20 Bn in 2023 and is expected to exhibit a CAGR of 7.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Growing awareness about sustainability and energy efficiency has boosted adoption of renewable energy sources for heating and cooling requirements. Increasing government support through incentives and rebates is also driving market demand. Majority of countries in Europe have set strict renewable energy targets to reduce carbon emissions from buildings which favors growth of geothermal heat pumps. Rising installation of integrated smart home control systems allows remote monitoring and automation of geoexchange systems. Manufacturers are focusing on development of advanced geothermal heat pump technologies with improved efficiency and lower installation costs to appeal wider customer base. Multi-functional geothermal systems providing both heating and cooling as well as generating hot water are gaining popularity.
- Threat of new entrants: Low capital requirements and easy availability of raw materials poses low threat of new entrants. However, established brands and need for expertise in installation poses barriers.
- Bargaining power of buyers: Large buyers can negotiate on prices, but specialized product and services limits significantly. Switching costs are also high.
- Bargaining power of suppliers: Few technology companies dominate the supply of key components like heat pumps and pipes. This gives them negotiation power.
- Threat of new substitutes: Alternate renewable energy sources like solar panels are substitutes but have limitations of high upfront investment.
- Competitive rivalry: Major brands compete on the basis of product quality, installation services and energy efficiencies. Pricing pressures exist in mature markets.
The global Geothermal Heat Pumps market is expected to witness high growth. The market size is projected to reach US$ 11.20 Bn by 2024, growing at a CAGR of 7.7% during the forecast period.
Regional analysis: North America dominates currently due to supportive regulations and subsidies for renewable energy. However, Asia Pacific is expected to be the fastest growing market led by countries like China, India and Japan. Growing construction industry and power demands will drive adoption.
Key players: Key players operating in the geothermal heat pumps market are STIEBEL ELTRON GmbH & Co. KG, Ingersoll Rand, Vaillant Group, Viessmann Group, Glen Dimplex, and Daikin Industries, Ltd. These brands compete on the basis of product quality and installation services. Pricing pressures exist in mature markets due to competition.