The global pool heat pump market was valued at USD 2.10 billion in 2022 and is expected to reach USD 2.85 billion by 2023, growing at a CAGR of 5.25%. Global warming is caused by various heating mechanisms that emit pollutants into the air, eventually increasing atmospheric carbon dioxide. Hence, decarbonizing society is mandatory, where decarbonizing heating and cooling mechanisms are the primary steps for the change. With gas boilers being more dominant for heating pools, the demand for sustainable solutions is enhancing the momentum for heat pumps. With the current technology available, it is possible to achieve 100% decarbonization, as heat pumps are the most popular solutions in the market. Moreover, the favorable government policies across the countries that support using renewable energy sources and preventing the emission of greenhouse gases into the atmosphere are eventually driving the pool heat pump market.
The global pool heat pump market shipments are expected to reach 1,140.65 thousand units by 2028. Further, with energy efficiency being a major optimization for heat pump vendors, the rise in digitalization is expected to fuel the integration of the devices with IoT. The market's success also depends on macro-environmental features such as social, legislative, and environmental aspects. North America, the EU, and Asian Pacific countries are expected to drive the growth of the pool heat pump market due to growing new construction and buildings. The rising demand for heating and cooling applications and increasing utility bills are expected to drive the U.S. pool heat pump market for the next five years, especially in the residential segments.
Regulations regarding energy consumption are evolving, thereby continuously making the situation difficult for vendors to sustain in the pool heat pump market. Because of a highly competitive industry, R&D investments in the pool heat pump market are limited, with the most substantial investments from large vendors. Moreover, the short time-to-market and focus acceptance of new technologies add to the market challenges for pool heat pump vendors. R&D investments are more narrowed on cost reduction of the production method and improvement of the existing technology for value addition than the development of new products.
MARKET TRENDS & DRIVERS
Preference for Smart Pool Heat Pumps
With energy efficiency being a priority for heat pump vendors, the rise in digitalization is expected to fuel the integration of devices with IoT. Heat pumps are also expected to be designed per the high demand. Furthermore, the need to provide real-time energy-efficient monitoring, optimized load profile, flexible electricity use, and affordable operation costs stimulate the need for technology-enabled connected heat pumps. While IoT-enabled devices are equipped with sensors, electronic chips, software, and network connectivity, Wi-Fi-enabled heat pumps help collect data for analysis. IoT-enabled heat pumps allow further decarbonization of heat supply as they effectively transfer renewable energy for household purposes and other commercial activities.
Favorable Government Policies and Incentives
The favorable government policies around the countries that prevent the emission of greenhouse gases into the atmosphere and support the usage of renewable energy sources are eventually driving the pool heat pump market. The policymakers are also trying to frame policies that can support the decarbonization of transportation and managing the power sectors. For extensive and mega projects, implementing appliances using renewable sources can become mandatory in the coming years to be certified as sustainable and green building units. This can substantially drive the adoption of heat pumps for swimming pools in residential and large commercial spaces.
In the U.S., laws related to heat pumps are crucial in U.S. states; for instance, in California, pool heat pumps must meet the federal minimum energy efficiency standards initiated by the US Department of Energy. These efficiency standards were updated at the start of 2023 to expand the minimum energy efficiency usage rating. At the same time, the pool heat pump market perceives significant growth in many countries, especially in Europe. In Europe, heat pumps reached a significant record in 2022, with sales growth increasing by 40%. Sales of air-to-water pool heat pump units jumped by almost 50%. Further, air-to-air pool heat pump sales in the United States grew by 11% in 2022, overtaking gas furnace sales. Also, the government provides financial incentives for switching from conventional electric or gas heating to heat pumps is expected to drive market growth.
High Installation and Upfront Costs
Despite the benefits associated with heat pumps concerning their sustainable environmental contribution, their high initial and upfront cost hinder their adoption. Such factors can be a major challenge, especially in the growing economies and price-sensitive markets of APAC and Latin America, where cost is a major influencing factor for purchase. It is estimated that the average installation cost of a heat pump with pool plumbing might range between USD 3,600 and USD 6,500, whereas the labor cost might range between USD 500 and USD 1,000. These prices are often quite high for middle-class people who form the major target segment. While there is evidence of pool heat pumps generating low operational costs over time compared to conventional gas and solar heaters, the high installation cost is a burden for vendors in the global pool heat pump market.
INSIGHTS BY TYPE
The global pool heat pump market by type segments as air source and water/geothermal source. The air source heat pump was the dominant segment in 2022, and its dominance is expected to sustain throughout the forecast period. It is a commonly preferred heat pump system installed in residential and commercial spaces by effectively sourcing heat from the outdoor air to pool water. Certain air source systems are also preferred for their performance as effective cooling systems during summer.
The air source heat pumps are also widely preferred for commercial and large residential purposes. They can generate higher range output above 20 kW for heavy-duty applications, especially for huge swimming pools. Air source heat pumps are more energy-efficient and can obtain up to 5.25 units of heat on average for every unit of electricity used to power. They also tend to be the primary choice for pools where the surrounding land is not ideal for a ground source system, with a highly insulated new build property, or where there is a need for a large outdoor pool.
INSIGHTS BY CAPACITY
The >20kW capacity segment dominated the global pool heat pump market in 2022 and is expected to pose an absolute growth of 39.06% during the forecast period concerning revenue. This heavy-duty heat pump is generally preferred for large-scale end-use purposes. They are ideal for commercial spaces where the surface area exceeds 500 square feet and has a capacity of over 30,000 gallons. Owing to the heavy application, they tend to be more expensive than the low-powered heat pumps that use high power. Hence, vendors can focus on hybrid versions to promote operational efficiency. Pentair, Hayward, AquaCal, and Rheem continue to focus on this segment as it poses a significant opportunity for product expansion, especially in the growing economies. Vendors can make efforts to develop energy-efficient pumps for the segment, as they are often associated with high utility bills.
INSIGHTS BY END USERS
The global pool heat pump market by end-user is categorized as residential and commercial. The residential end-user segment was the largest air-source pool heat pump market. The rise in construction of pools in high-rise buildings, enhancing the resale value prospect, disposable income, growing awareness of geothermal energy, use of HVAC systems using renewable resources, and rising concern for sustainability and eco-friendliness are expected to drive the market over the next five years in the residential sector. With established markets in Europe, North America, and a few major countries in APAC, the residential segment constitutes more than 40% of the 0-10kW heat pump market owing to the compact size of the pools.
The commercial end-user segment poses a huge window of future opportunities in the global pool heat pump market. Developing affordable and flexible heat pumps that match the complex and dynamic pool infrastructure and help lower utility bills contribute to the segment's growth. Institutions such as schools, colleges, sports complexes, and water parks also use renewable technologies to signify or differentiate themselves from society by showcasing their environmental commitment by reducing their carbon footprint. Restaurants, hotels, spas, and recreation centers are the major end-users in the segment, which poses a strong growth prospect for the next five years. It is further accelerated by the growth in tourism, leisure activities, demographic factors, lifestyle modifications, and supportive incentives from the government to promote business activities. The other segment of the commercial end-users consists of municipal pools, health and wellness centers, and other public pools.
North America held the largest global pool heat pump market share, accounting for over 38% in 2022. With fossil fuels dominating the market in most residential buildings in the U.S., the opportunity for pool heat pump growth remains evident in the country. Furthermore, the eminent players in the region are expected to participate in market expansion activities that influence higher adoption in niche markets of Canada between 2020 and 2025. The Association of Pool and Spa Professionals, a non-profit organization headquartered in Alexandria, develops and publishes standards for the spa, pools, and hot tub industries. The pool and other related outdoor living product industries in the U.S. also have expansion opportunities of over $11 billion, which reflects the scope for growth in the pool heat pump market.
The global pool heat pump market is fragmented and is characterized by various global and prominent vendors across the geographies. Global players like Hayward, Rheem Manufacturing, AquaCal, Pentair, and Jandy are trying to increase their markets through merger strategies and profitable partnerships. In contrast, the prominent vendors are capitalizing on the product range that best suits domestic needs and wants. However, being a technology-oriented product, the scope of difference lies with the sophistication and placement of advanced features like energy efficiency, COP, eco-friendly refrigerant, installation costs, geographical climate, services analysis, and much more, through which the product can stay away from the competitive environment. With the recent advancements in engineering and technological features, the changing dynamics of the pool industry demand a highly effective heat pump for universal applications.