Australia Heat Pump Market

Australia Heat Pump Market Overview:

The Australia heat pump market size reached USD 1,284 Million in 2024. Looking forward, IMARC Group expects the market to reach USD 2,603.31 Million by ​2033​, exhibiting a growth rate (CAGR) of 8.17% during ​2025-2033​. Rising energy prices, growing demand for eco-friendly solutions, and government incentives drive the market growth. The drivers consist of a change in energy-efficient systems, tech evolution in heat pump efficiency, and a growing trend towards renewable energy integration. Also, consumer knowledge of long-term cost savings, severe weather conditions, and the rising construction of residential and commercial building are factors supporting the Australia heat pump market share.

Australia Heat Pump Market Trends:

Rising Energy Costs

Energy prices in Australia have been steadily increasing, prompting both households and businesses to look for more efficient ways to heat and cool their spaces. As a result, heat pumps are becoming an attractive option. Unlike traditional systems such as gas or electric heaters, heat pumps are designed to be more energy efficient. They work by transferring heat from the air or ground, rather than generating heat through energy consumption. This makes them far more efficient, allowing for lower energy bills over time. With the ongoing rise in electricity costs, many consumers are opting for heat pumps to save money in the long run. Additionally, the shift toward energy-efficient solutions is also supported by rising awareness of the environmental benefits of using less energy, which is providing a thrust to the Australia heat pump market growth.

Escalating Demand for Sustainable Solutions

Sustainability is becoming a key consideration for many consumers, which is fueling the growth of the heat pump market in Australia. With growing concerns over climate change and environmental impact, many people are actively seeking out greener alternatives for their energy needs. Heat pumps are an excellent alternative because they are less harmful to the environment compared to conventional heating systems. They can utilize renewable energy derived from the ground or air, which makes them a clean alternative for people who want to minimize their carbon emissions. Unlike electric or gas systems, they are less energy-intensive and emit fewer greenhouse emissions to produce heat, thus reducing greenhouse gas emissions. As Australia is working towards achieving its net-zero emissions goal, consumers are opting for energy-efficient as well as environmentally friendly options. This shift in consumer priorities is driving the growth of the heat pump market, as more people choose products that contribute to a more sustainable future.

Government Incentives and Rebates

Government programs offering incentives and rebates have made it more affordable for Australians to install heat pumps, contributing to the market’s growth. Both state and federal governments provide financial assistance to encourage the adoption of energy-efficient technologies. These programs will help cover part of the cost of installing a heat pump, making it a more accessible option for households and businesses alike. For instance, in some states, homeowners can receive rebates for installing energy-efficient systems, which can significantly reduce the upfront cost of purchasing and installing a heat pump. Additionally, there may be tax breaks or low-interest loans available to further ease the financial burden. These government-backed incentives not only make heat pumps more affordable but also encourage consumers to make environmentally conscious choices, which is propelling the market growth.

Australia Heat Pump Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country and regional levels for ​2025-2033​. Our report has categorized the market based on rated capacity, product type, and end use sector.

Rated Capacity Insights:

• Up to 10 kW
• 10–20 kW
• 20–30 kW
• Above 30 kW

The report has provided a detailed breakup and analysis of the market based on the rated capacity. This includes 10 kW, 10–20 kW, 20–30 kW, and above 30 kW.

Product Type Insights:

• Air Source Heat Pump
• Ground Source Heat Pump
• Water Source Heat Pump
• Exhaust Air Heat Pump
• Others

A detailed breakup and analysis of the market based on the product type have also been provided in the report. This includes air source heat pump, ground source heat pump, water source heat pump, exhaust air heat pump, and others.

End Use Sector Insights:

• Residential
• Commercial
• Hospitality
• Retail
• Education
• Food and Beverage
• Paper and Pulp
• Chemicals and Petrochemicals
• Others

The report has provided a detailed breakup and analysis of the market based on the end-use sector. This includes residential, commercial, hospitality, retail, education, food and beverage, paper and pulp, chemicals and petrochemicals, and others.

Regional Insights:

• Australia Capital Territory & New South Wales
• Victoria & Tasmania
• Queensland
• Northern Territory & Southern Australia
• Western Australia

The report has also provided a comprehensive analysis of all the major regional markets, which include Australia Capital Territory & New South Wales, Victoria & Tasmania, Queensland, Northern Territory & Southern Australia, and Western Australia.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Australia Heat Pump Market News:

• In 2025, Rheem introduced its RD17AZ residential heat pump, offering high efficiency with up to 19 SEER2 and 8.5 HSPF2 ratings. The unit features R-410a refrigerant, inverter-driven variable-speed technology, and built-in Bluetooth connectivity via Rheem's EcoNet app, enhancing user control and energy management.
• In 2023, Panasonic Australia partnered with Reclaim Energy to launch a CO₂-based hot water heat pump system. The system boasts a Coefficient of Performance (COP) of 6.1, making it up to five times more efficient than traditional gas or electric heaters. It is suitable for both residential and commercial use.

Australia Heat Pump Market Report Coverage:

Key Questions Answered in This Report:

• How has the Australia heat pump market performed so far and how will it perform in the coming years?
• What is the breakup of the Australia heat pump market on the basis of rated capacity?
• What is the breakup of the Australia heat pump market on the basis of product type?
• What is the breakup of the Australia heat pump market on the basis of end use sector?
• What is the breakup of the Australia heat pump market on the basis of region?
• What are the various stages in the value chain of the Australia heat pump market? 
• What are the key driving factors and challenges in the Australia heat pump market?
• What is the structure of the Australia heat pump market and who are the key players?
• What is the degree of competition in the Australia heat pump market? 

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Australia heat pump market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Australia heat pump market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Australia heat pump industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.