NEW YORK -- A geothermal heat pump is a building heating/cooling system that uses a heat pump to move heat from or to the ground, utilizing the earth's generally constant temperatures throughout the seasons. Ground source heat pumps (GSHPs) – sometimes known as geothermal heat pumps (GHPs) – are among the most energy-efficient HVAC and water heating systems, using substantially less energy than a boiler/furnace or resistive electric heaters.
According to the U.S. Environmental Protection Agency, geothermal heat pumps are the most energy-efficient, environmentally friendly, and cost-effective space cooling systems available (EPA). Geothermal heat pumps have the potential to dramatically reduce emissions, primarily when used for both heating and cooling and when powered by renewable energy sources.
Increasing Demand for Energy-Efficient Solutions and Rising Construction to Drive the Geothermal Heat Pumps Market
According to Straits Research, globally, population growth and rapid industrialization have resulted in massive energy demand. In most households, lighting and electrical appliances, cooking, space heating/cooling, water heating, and other energy-related activities are frequent. The use of fossil fuels like oil, coal, and natural gas to meet heating needs is rising, posing a threat to the environment.
Fossil fuels power the bulk of building furnaces and boilers, accounting for 42% of greenhouse gas emissions. As people become more aware of climate change and greenhouse gas emissions, demand for energy-efficient products and solutions is expected to surge.
Government limits and emission standards are likely to strengthen the market for energy-saving equipment in the industrial and residential sectors. A heat pump uses one kilowatt of energy to produce four kilowatts of thermal power, resulting in a 300% efficiency. According to the International Energy Agency (IEA), heat pumps help reduce carbon dioxide (CO2) usage, resulting in an annual reduction of 9.16 million tonnes of CO2 emissions across Europe.
The geothermal heat pump market is expected to be driven by rising demand for energy-efficient technologies and a growing carbon emission worldwide over the forecast period.
The new building cannot meet demand as many older residential properties in developing economies are near the end of their useful life. As a result, the housing market's sector of renovating, maintaining, and preserving existing properties is rising. Also, over the forecast period, the Asia Pacific region's burgeoning demand for infrastructure and property developments is expected to drive increased demand for geothermal heat pumps.
Government spending on transportation infrastructure is likely to quickly move Indonesia's construction industry forward. On the other hand, Malaysia is anticipated to face challenges due to the new government's objective of reducing building project spending to reduce the country's debt. However, the growing demand for low-cost housing is likely to drive demand for geothermal heat pumps over the forecast period.
Increasing Integration of IoT to Offer Growth Opportunities
Internet of Things (IoT)-based heat pumps enable real-time monitoring, predictive maintenance, and component remote diagnostics. Internet of Things (IoT)-based heat pumps use smart thermostats to monitor environmental changes and communicate with their water heater equipment. Their designs and operations, on the other hand, have remained unchanged. Automation and remote operation have been essential concerns in developing next-generation heat pumps for simplicity of operation. To make heat pumps more user-friendly, they come with LCD panels and warning lights.
Major market competitors are focused on incorporating diverse technologies into their geothermal heat pumps to ensure simplicity of operation and maintenance. Machine learning and artificial intelligence are also being studied for application in heat pumps to reduce electricity consumption and increase efficiency. Heat pumps that use machine learning and artificial intelligence can assess consumers' consumption patterns and calculate their operational time and length, eliminating the need to turn them on and off manually. These factors are expected to increase heat pump demand and present lucrative opportunities for market participants.
Impact of COVID-19
The geothermal heat pump market expansion has been limited by a stoppage of manufacturing activities and a drop in demand for commercial services in 2020. As a result, demand for geothermal heat pumps has fallen in the residential, commercial, and industrial sectors. Construction and industrial activities have come to a halt worldwide due to the pandemic, restricting demand for geothermal heat pumps.
There have been delays in the supply of air conditioners and heat pumps due to disruptions in the logistic network. The European Union's HVAC production lines were shut down for several weeks, postponed new installation projects.
The post-pandemic period will be crucial for the global geothermal heat pump market. Supply chain interruptions might impede recovery, affecting market dynamics and product prices. Furthermore, the global market would face hurdles due to poor financial conditions and rising expenses due to distribution and transportation capacity constraints. Limited manufacturing, support operations, labor shortages, and limits for other end-user sectors, suppliers, and vendors may also prevent consumers from getting what they want. Overall, the global geothermal heat pumps market's recovery will be difficult.
North America, Europe, Asia-Pacific, Central, and South America, the Middle East, and Africa make up the market's five regions. Asia-Pacific and Europe are the two most important markets for geothermal heat pumps. Factors such as improving financial conditions, rapid industrialization, and globalization will likely drive market growth over the forecast period.
Asia-Pacific is defined by the affordable availability of large numbers of skilled workers. The expanding trend of shifting industrial bases to emerging economies, notably China and India, is likely to drive geothermal heat pump market growth throughout the forecast period.
Europe is expected to be the second-largest market for geothermal heat pumps, with an expected market value of USD 5,993 million by 2030. Throughout Europe, energy-efficient technologies are likely to be in high demand. Various government programs are being pursued to reduce the region's energy use. As a result of these initiatives, heat pump demand is forecast to rise.
North America's economy is the world's largest and one of the most stable, with significant growth owing to industrial dynamics and commodities availability in its countries. Over the forecast period, favorable government policies and growing subsidies on renewable and energy-efficient products are likely to propel the geothermal heat pumps market. The market for advanced geothermal heat pumps is expected to increase due to government efforts and rebates that encourage the use of environmentally friendly and energy-saving technologies.
In Central and South America, growing energy consumption in countries like Brazil and Argentina is likely to increase the demand for energy-efficient heating solutions, boosting the market growth. In addition, over the forecast period, the evolving residential and commercial development sectors are expected to impact geothermal heat pump demand positively.
Residential and commercial infrastructure expansion, particularly in Saudi Arabia, the United Arab Emirates, and Qatar, will benefit overall market growth. Furthermore, the government is pursuing sustainable energy sources such as solar, wind, and geothermal energy. As a result, the variables above will likely enhance the MEA's entire geothermal heat pump market.