Heating industry: market size and trends

The heating industry stands at a threshold as climate emergency concerns arise and energy scarcity threatens  to become an energy crisis. With a marked significance in its contributions to carbon emissions, leading agents in the heating sector have made it their goal to move away from fossil fuels.

It’s precisely in this context where the room for successful alternatives is opening up, from large industrial heat pumps to district heating companies, new perspectives on the heating industry are booming. Let’s take a look at them.


Current challenges of the heating industry

While the heating industry has been able to provide comfort and developments in very few decades, the current fossil fuel crisis has opened up some huge challenges to be solved.

On the one hand, the heating sector is facing the need for decarbonization. While  traditional heating systems heavily relied on fossil fuels, the need has arisen to transition to low-carbon or carbon-neutral heating sources, such as renewable energy or heat pumps. In this context, it’s more and more desirableto shift towards the electrification of heating systems.

This quest is amplified by the additional need for improving energy efficiency in heating systems, so that cuts can also be applied to the use of energy resources.

At the same time, all these transformations must take into account that heating is a basic necessity, so that heating services should remain affordable. 

All in all, these challenges are providing a fertile soil from which the heating systems of the future can develop.

Heating industry market size

The global heating industry market size (looking at heating equipment) was valued at USD 33.56 billion in 2018 by Grand View Research. From there, it was expected to grow at a CAGR of 5.4% in the period from 2019 to 2025. 

Several consultant firms also offer a positive outlook for the heating industry in the future, which will be driven by public initiatives for improving energy efficiency as well as new technological innovations and R & D.

The fact is that the heating industry is going through a major transformation that will entail several profound changes. Some of the characteristics of the heating industry of the future will look like: 

  •  Large scale heating production plants
  • An integration of renewable energy, including solar thermal systems, geothermal and seawater heat pumps systems, among other options
  • Electrification of heating through heat pumps
  • Optimization of efficiency efforts through high technology adoption and development, as well as waste heat recovery and thermal storage solutions
  • Smart technologies and digitalization with aims like energy use optimization, control enhancement and improved user comfort
  • The generalization of district heating and, more particularly, 5th generation district heating as a means to gain higher efficiencies
  • A continuation on policy support and public incentives to promote the adoption of sustainable heating technologies through tax credits and other financial incentives

Industrial heat pumps: the key to the heating industry of the future

Industrial heat pumps are at the heart of the heating industry revolution and the coming heating market trends figures don’t lie: while the global industry heat pumps market size was valued at $8.8 billion in 2021, it is projected to reach $17.7 billion by 2031, growing at a CAGR of 7.7% in the coming decade, according to Global Newswire.

While in fact heat pumps are not a new technology, demand for this type of system is growing as the quest for sustainable and efficient heating takes a new meaning as well as it enters a whole different level in terms of scale.

The underlying principle for heat pumps is simple: a heat pump is a device that transfers heat from one location to another using a refrigeration cycle. The basic components for the heat pump include the refrigerant, evaporator, compressor, condenser, and expansion valves.

heating sector

Large-scale heat pumps are designed to meet the heating needs of large-scale models, from industrial processes to district heating systems. However, unlike conventional heating methods that generate heat directly, heat pumps work by moving and upgrading existing heat from the environment.

There are multiple reasons for the increased demand for heat pumps in the heating industry. In fact, this equipment stands out as one of the key solutions to sort out some of the challenges faced by the heating sector, efficiency. 

Increased efficiency

Heat pump efficiency is typically measured by its coefficient of performance (COP). These values represent the ratio of heat energy transferred compared to the amount of electrical energy consumed by the heat pump.

While COP values vary when comparing different types of heat pumps, COP values for well-adjusted equipment can range between 3 to 4. In other words, these heat pumps are able to produce around three or four kW·hour of heat for every unit of power they consume.

Their improvements in efficiency have a series of significant impacts: on the one hand, they provide crucial cost savings; on the other hand, higher energy efficiency means reduced energy consumption, which translates to lower greenhouse gas emissions and a smaller carbon footprint. Finally, as many regions implement energy efficiency regulations, heat pumps help operators adhere to these standards.

Furthermore, developments in technology have meant that heat pump efficiencies are multiplied. Such is the case of models implementing heat recovery schemes, like heat pumps able to recover waste heat generated by industrial processes and repurpose it for district heating.

district heating companies

Push for electrification

Replacing obsolete, fossil-fuel models with modern heat pumps represents a strategic decision towards electrification. In fact, one Germany-based research simulation showed the installation of heat pumps can greatly reduce supply risks and take a decisive step towards meeting sustainability goals, such as the Paris Agreement, effectively substituting gas with renewable energies  (Pietro P. Altermatt et al.).

In fact, heat pumps are able to extract heat from low-grade heat sources such as air, water, or waste heat, and then upgrade it to a higher temperature suitable for district heating. Since they primarily rely on electricity for this process and they have great efficiency figures, they can achieve significant energy savings compared to conventional heating systems.

Incorporation of renewable energy sources

Heat pumps represent a particularly versatile energy production model, one that accommodates renewable energy sources. In fact, this possibility is one of the key reasons pushing for heat pump growth, as more and more initiatives look to incorporate renewable energy sources (particularly in district heating initiatives).

In fact, heat pumps can utilize various heat sources, including ambient air, groundwater, rivers, industrial waste heat, or geothermal energy. This versatility allows them to adapt to different local conditions and utilize the most abundant and accessible heat source, further enhancing their energy efficiency and sustainability.

All in all, these three benefits make heat pumps a key element in the heating industry of the present and the future, which is looking to generate a more sustainable and environmentally friendly option for heating.

By utilizing some low-grade, renewable heat sources, heat pumps help decarbonize the heating sector and fight climate change.

Additionally, industrial heat pumps represent a scalable solution that is able to meet the heating demands of large industrial complexes or entire districts. As such, they can efficiently provide heat for multiple buildings, reducing the need for individual heating systems and improving overall energy management.

By leveraging these benefits, industrial heat pumps contribute to the development of efficient and sustainable district heating systems, helping to reduce energy consumption, lower carbon emissions, and improve energy resilience.

They have thus become a crucial component for heating initiatives and the heating industry, including the increasingly popular district heating projects. 

At ARANER, we stand at the forefront of cutting-edge heating engineering and innovation. As such, we provide state-of-the-art heat pumps to match each project’s needs, including innovative district heating models where sustainability and energy efficiency are at the forefront. Get in touch with us and speak to our team about how we can help you.



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