Global heat pump sales show slow recovery

UK: Market research company BSRIA claims that around 3.5 million hydronic heat pumps were sold globally in 2025 – modest growth of 4% following a difficult 2024.

The analysis finds that, despite ongoing challenges in global construction activity and continued consumer caution, the market is showing signs of stabilisation. 

However, over the same period, just under 13 million boilers were sold, 90% of which were gas. While this indicates that the boiler market remains broadly flat, it still equates to 3.8 boilers sold for every heat pump, underlining the scale of the existing installed base and the gradual pace of transition.

The analysis draws on three BSRIA reports: the World Domestic Boilers Market 2026 and World Commercial Boilers Market 2026, alongside the Worldwide Heat Pump Markets 2026. 

Observing that the market is not moving in a straight line, Socrates Christidis, BSRIA’s heating and renewables research manager, said: “What we are seeing is a sector responding to a complex mix of pressures from energy prices and security concerns, through to evolving policy frameworks and the practical realities of installation. The transition is happening, but the boiler market is in a phase of managed decline, rather than sharp contraction.”

With around 200 million boilers currently in operation worldwide, approximately half of which are older non-condensing units, demand is now seen to be largely driven by replacement and retrofit activity rather than new build.

In mature markets such as Europe and North America, replacement and retrofit accounts for the vast majority of demand, supported by the reliability, familiarity and lower upfront cost of boiler systems.

However, over the long term, the market is expected to contract gradually, with BSRIA forecasting a compound annual growth rate of -2% for fossil fuel boilers between 2019 and 2029.

Meanwhile, BSRIA identifies 2025 as the start of a renewed growth phase for heat pumps, with hydronic units forecast to grow at a compound annual rate of 8% between 2019 and 2029.

While the new build sector continues to support adoption, the most significant long-term opportunity lies within existing building stock. By 2029, hydronic heat pumps are expected to account for around 12% of activity within the replacement and retrofit market, rising from a relatively low base.

Air-to-air heat pumps, including mini-splits and multi-splits, also continue to expand, reaching around 100 million units in 2024 and growing by 8% in 2025. BSRIA estimates that between 5% and 8% of these are used as a primary heating source.

However, pricing remains a barrier. Heat pump costs are continuing to track inflation, driven by high raw material costs, more expensive components, the pursuit of higher efficiencies and ongoing skills shortages across the installation base.

A central finding is that the replacement and retrofit segment is now the defining battleground for the global heating market. Around 73% of total heating demand globally is driven by replacement, rising to over 90% in mature markets.

This shift is intensifying competition between boilers, heat pumps, hybrid systems and district heating, particularly as the replacement market becomes increasingly competitive

Installation cost and disruption remain key barriers to wider heat pump adoption, particularly in retrofit scenarios. However, emerging innovations including AI tools and pre-assembled systems are beginning to reduce these challenges.

Under BSRIA’s progressive scenario to 2035 – as opposed to its business as usual five-year outlook – heat pump growth across the top five European heating markets could reach around 20%, alongside a projected decline of around 7% in the gas boiler market, assuming cleaner electricity, stronger policy frameworks and increased investment in installer capacity.

While regulation and decarbonisation targets continue to shape long-term direction, short-term market performance remains closely tied to affordability, energy prices and the ability to deliver solutions at scale.

“The ratio of 3.8 boilers sold for every heat pump in 2025 tells you where the market is today,” Christidis said. “Heat pumps are becoming mainstream, even in North America, and boilers are declining, but very slowly. And the opportunity is not in new build alone. It is in the retrofit and replacement market, and that is where the real competition is beginning.”

The full BSRIA reports can be accessed here.