Heating Equipment Market to Reach US$171.3 Billion by 2032, Says Persistence Market Research

The global heating equipment market is entering a transformative decade marked by rapid electrification, regulatory pressure to decarbonize buildings, and rising demand for efficient heating solutions across industrial, commercial, and residential environments. As sustainability standards intensify and energy systems modernize, heating technologies-from boilers and furnaces to next-generation heat pumps-are evolving to balance cost efficiency, energy security, and climate goals.

By 2025, the heating equipment market is projected to reach US$112.4 billion, further climbing to US$171.3 billion by 2032 at a CAGR of 6.2%, supported by strengthened policy frameworks, growing demand for industrial process heating, and significant heat-pump adoption across Europe and Asia. While traditional systems retain strong demand due to replacement cycles and long-established infrastructure, the shift toward electric and low-carbon technologies is reshaping competitive dynamics and product strategies worldwide.

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Market Overview and Growth Dynamics

The global heating equipment market is experiencing steady and sustained expansion, driven by macroeconomic recovery, industrial heating requirements, and a shift toward cleaner, more efficient technologies. Electrification remains the most influential structural trend, with countries accelerating heat-pump rollouts to meet national decarbonization commitments. Strong building-retrofit activity in mature markets further supports rising adoption of high-efficiency heating solutions, while energy-price volatility increases demand for equipment that reduces long-term operating costs. By 2032, broad-based transformation in residential, commercial, and industrial sectors will influence not only product design but also service delivery models, digital management systems, and regional manufacturing footprints.

Asia Pacific leads the market with roughly 43% of global demand, supported by China's extensive industrial base and large-scale district-heating networks. Boilers remain the leading product segment with 28% revenue share, attributed to their entrenched presence in industry and district energy systems. Europe stands out as the fastest-growing region due to accelerated heat-pump adoption and strong policy-led transitions targeting fossil-fuel reduction. These regional and segment-specific patterns collectively shape the medium-term outlook for sales volumes, equipment upgrades, and innovation priorities.

Key Highlights from the Report

• Market projected to reach US$171.3 billion by 2032 with a CAGR of 6.2%.
• Asia Pacific remains the largest regional market with 43% global share.
• Europe emerges as the fastest-growing region under aggressive electrification targets.
• Boilers maintain dominant product share at approximately 28%.
• Gas-fired systems account for 51% of global demand due to extensive pipeline networks.
• Heat pumps continue to record double-digit growth in several major markets.

Market Segmentation

Segmentation across the heating equipment market reflects diverse technological needs, regulatory pressures, climate considerations, and building-stock variations across geographies. By product type, boilers hold a structural leadership position due to their central role in industrial process heating, district-heating networks, and older building infrastructures. Their long service life and replacement-driven demand ensure consistent market activity. Meanwhile, heat pumps represent the fastest-growing category, supported by rapid innovation in compressors, refrigerants, and variable-speed technologies that enhance performance in cold climates. Their rising attractiveness in residential and commercial applications is supported by incentives and regulatory shifts that increasingly favor electric systems. Hybrid combinations pairing boilers and heat pumps are also becoming more common in retrofit markets, offering a bridge between legacy systems and low-carbon alternatives.

Segmentation by fuel type shows a market still anchored by gas-fired equipment, which holds a 51% share due to widespread pipeline infrastructure and the reliability of gas-based systems in colder regions. Residential combi boilers in Europe, multifamily installations in urban centers, and industrial gas-fired units continue to reinforce this segment. However, electric-based solutions-dominated by heat pumps but also including radiant floor heating and electric furnaces-are gaining significant traction due to decarbonization mandates and improved operational efficiency. As global energy grids incorporate more renewable power sources, electric heating solutions are expected to become increasingly competitive, accelerating their share through 2032.

End-user segmentation also reveals robust industrial demand, driven by recovery in chemicals, food processing, pharmaceuticals, textiles, and manufacturing. These sectors rely heavily on high-capacity boilers, process heat equipment, and increasingly, high-temperature heat pumps and electrified solutions. Commercial sectors-including retail, offices, hospitality, and multifamily buildings-are adopting smart controls and energy-efficient systems to meet rising performance standards. Residential demand remains influenced by climate zone, policy incentives, building codes, and urbanization patterns, shaping adoption rates across regions.

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Regional Insights

Regional trends show considerable variation in heating-equipment adoption, influenced by climate, infrastructure, regulatory frameworks, and construction activity. North America remains a mature market where replacement cycles drive steady demand. The U.S. leads regional sales with strong retrofit activity in commercial buildings, while Canada's heat-pump adoption is supported by federal and provincial incentives. Strict efficiency codes and refrigerant regulations also push manufacturers toward next-generation electric and high-efficiency heating technologies.

Europe is the fastest-growing regional market, shaped by stringent decarbonization mandates and one of the world's most aggressive heat-pump deployment agendas. Countries such as Germany, France, the U.K., and the Nordics are replacing fossil-fuel-based heating systems with high-output air-source and ground-source heat pumps. EU-wide regulations phasing down high-GWP refrigerants and promoting low-carbon innovation are influencing product design and accelerating investment in new manufacturing lines. Additionally, extensive building-retrofit funding and district-heating expansion across Scandinavia, Central Europe, and Germany create strong multiyear demand for high-efficiency boilers, heat exchangers, and modular heat-pump plants.

Asia Pacific, accounting for the largest market share worldwide, is driven by enormous demand from China's industrial sector, rapid urbanization, and expanding district-heating infrastructure. Manufacturing capacity and domestic production strength enable cost efficiencies that support regional and global exports of heating equipment. Japan, South Korea, and Taiwan continue to advance high-efficiency electric systems, while India sees rising demand from industrial growth and gradual electrification improvements. ASEAN economies are also increasing adoption of heat pumps in commercial sectors, particularly hospitality and multi-residential complexes, signaling rising regional awareness of efficiency benefits.

Market Drivers

The most powerful driver shaping the heating equipment market is global electrification, led by government mandates that seek to reduce greenhouse-gas emissions and promote high-efficiency technologies. Heat pumps, which frequently record double-digit growth, have become central to national energy-transition plans across Europe and advanced Asian markets. Supportive incentives, building-retrofit funding, and stricter regulation of fossil-fuel systems continue to accelerate the shift. Industrial recovery also contributes to growth, with sectors such as chemicals, food processing, and textiles increasing investment in large-capacity boilers, high-temperature heat pumps, and electric process-heating systems. Additionally, rising energy prices highlight the financial benefits of efficient heating systems, improving the return on investment for heat pumps, condensing boilers, and smart thermal controls across both residential and commercial buildings. These factors collectively sustain market growth and encourage technological innovation across fuel types, system architectures, and refrigerants.

Market Restraints

Despite strong momentum, several constraints challenge market expansion. Heating equipment supply chains rely heavily on specialized components-including compressors, heat exchangers, and low-GWP refrigerants-that face periodic shortages and global logistical disruptions. Such constraints extend OEM production timelines, raise procurement costs, and pressure inventory management. Additionally, uneven policy implementation and inconsistent regional incentives create adoption gaps across developing markets, where high upfront costs continue to deter consumers and businesses from transitioning to electric or advanced-efficiency systems. The affordability of fossil fuels in some regions further slows electrification, while fragmented regulatory frameworks limit the speed at which new building codes and efficiency standards are adopted.

Market Opportunities

Significant opportunities lie ahead in industrial electrification, where high-temperature heat pumps and advanced electric process-heating systems are progressing rapidly toward commercial viability. As governments fund manufacturing modernization and industrial decarbonization, demand for high-capacity electric systems and integrated waste-heat recovery solutions is expected to rise considerably. Another major opportunity is the expansion of Heating-as-a-Service (HaaS) and subscription-based models that combine equipment, maintenance, and performance guarantees. These service-oriented approaches offer predictable costs for customers while generating recurring revenue and higher margins for manufacturers. With building-efficiency regulations tightening and digital energy-management platforms becoming more sophisticated, service-based heating solutions are poised to reshape long-term customer relationships and financial models.

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Company Insights

• Gilead Sciences
• AbbVie
• Merck & Co.
• Carrier
• Mitsubishi Electric Corporation
• Emerson Electric Co.
• Daikin Industries, Ltd
• Trane
• Robert Bosch GmbH
• Lennox International
• Johnson Controls, Inc.
• Midea Group
• Hitachi, Ltd.
• Rheem Manufacturing Company
• Haier (General Electric)
• Panasonic Holdings Corporation
• Danfoss
• Fujitsu
• LG Electronics, Inc.
• Samsung

Market Segmentation

By Product Type

Boilers
Furnaces
Heat Pumps
Unit Heaters
Water Heaters
Others

By Fuel Type

Electric
Gas
Oil
Renewable/Biomass
Others

By Application

Residential
Commercial
Industrial
District Heating
Others

By Region

North America
Europe
East Asia
South Asia & Oceania
Latin America
Middle East & Africa

Recent Developments:

In March 2025, Daikin launched the EWYK-QZ modular air-to-water heat pump using propane (R-290), offering capacities up to 2,000 kW for commercial and industrial installations.

In September 2025, Daikin introduced the Altherma 4 H heat pump for residential applications, featuring ultra-low noise operation and the ability to heat water up to 75°C even at temperatures as low as -28°C.

Conclusion

The heating equipment market is entering a pivotal decade defined by electrification, stringent climate policies, and the accelerating shift toward high-efficiency technologies. While traditional gas-fired and boiler systems retain substantial relevance due to their extensive installed base, the global transition toward sustainable solutions is increasingly shaping product design, manufacturing strategies, and competitive dynamics. Strong industrial recovery, rapid heat-pump deployment, and expanding district-heating infrastructure across Asia and Europe reinforce a positive long-term growth outlook. As companies invest in innovation, low-GWP refrigerants, digital platforms, and service-driven business models, the market is positioned for enduring transformation through 2032 and beyond.

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