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Forecast Period
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2026-2030
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Market Size (2024)
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USD 1.59 Billion
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CAGR (2025-2030)
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7.45%
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Fastest Growing Segment
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Online
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Largest Market
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British Columbia
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Market Size (2030)
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USD 2.44 Billion
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Market Overview
Canada Air Source Heat Pump market was
valued at USD 1.59 billion in 2024 and
is anticipated to grow USD 2.44 billion by 2030 with a CAGR of 7.45% during
the forecast period. The Canada air source heat pump market is experiencing
significant growth driven by the country’s focus on reducing greenhouse gas
emissions and improving energy efficiency in residential, commercial, and
industrial sectors. Advances in technology have enhanced the performance of
heat pumps in cold climates, making them a viable alternative to traditional
heating systems. Government incentives and rebate programs further encourage
adoption by lowering upfront costs. Increasing awareness among consumers about
the long-term cost savings and environmental benefits of air source heat pumps
is also fueling market expansion. Additionally, growing electrification trends
and commitments to sustainable energy use support the market’s positive outlook
in Canada.
Key Market Drivers
Increasing
Focus on Energy Efficiency and Environmental Sustainability
One of the strongest drivers of the air source heat
pump (ASHP) market in Canada is the rising emphasis on energy efficiency and
environmental sustainability. Canada is committed to reducing its carbon
footprint and meeting international climate goals, including those set under
the Paris Agreement. Traditional heating systems, especially those relying on
fossil fuels such as oil and natural gas, contribute significantly to
greenhouse gas emissions. ASHPs offer an eco-friendly alternative by utilizing
ambient air to provide heating and cooling, consuming far less energy than
conventional systems.
Canadian consumers and businesses are increasingly
aware of the environmental impact of their energy use. This awareness, combined
with stricter building codes and regulations promoting energy-efficient
construction, is pushing the demand for low-carbon heating and cooling
technologies. ASHPs are now being incorporated into new residential and
commercial buildings, as well as retrofitted into existing structures, to
reduce overall energy consumption and environmental impact.
Government
Incentives and Support Programs
Government policies and incentive programs play a
crucial role in accelerating the adoption of air source heat pumps across
Canada. Various federal and provincial programs offer financial rebates, tax
credits, and subsidies to homeowners, builders, and businesses that install
ASHP systems. These incentives help reduce the higher upfront capital cost
associated with ASHPs, making them more accessible to a broader consumer base. Canada's Emissions Reduction
Plan aims to increase the share of home heating provided by heat pumps from
5.8% in 2022 to 10.5% by 2030, indicating strong policy support for their
adoption.
For example, programs such as the Canada Greener Homes
Grant provide rebates for heat pump installations alongside home energy
assessments. Provinces like British Columbia and Quebec have additional rebate
schemes designed to promote clean heating technologies. Governments are also
implementing stricter energy efficiency standards for buildings, encouraging
the integration of renewable and low-emission heating solutions. This
supportive regulatory environment acts as a catalyst, driving faster market growth
by addressing affordability barriers and providing confidence to consumers and
businesses.
Rising
Consumer Awareness and Demand for Long-Term Savings
Another important driver of the Canada ASHP market is
the increasing consumer awareness of the long-term economic benefits and
comfort improvements offered by air source heat pumps. While the initial
investment for heat pump systems can be higher than traditional furnaces or
boilers, the operational costs are significantly lower due to superior energy
efficiency. According to Natural Resources Canada, homeowners can save up to
40% on heating costs annually by switching to air source heat pumps compared to
conventional systems.
Consumers are becoming more informed about the total
cost of ownership, which includes installation, maintenance, and especially
energy consumption over the system’s lifetime. The promise of lower monthly
energy bills, reduced maintenance expenses, and increased home comfort is
encouraging more Canadians to choose air source heat pumps. Additionally, the
ability of ASHPs to provide both heating and cooling in a single system offers
year-round value, making them an attractive alternative to separate HVAC units.
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Key Market Challenges
High
Upfront Costs and Installation Complexity
One of the primary challenges limiting the widespread
adoption of air source heat pumps (ASHPs) in Canada is the relatively high
upfront cost compared to traditional heating systems like furnaces or boilers.
Although ASHPs offer significant energy savings and lower operating costs over
time, the initial purchase price and installation expenses can be a deterrent
for many homeowners and businesses.
The installation of ASHPs often requires specialized
knowledge and skills, which can increase labor costs. Proper sizing, placement,
and integration with existing heating infrastructure are critical to ensuring
optimal system performance and efficiency. Additionally, in some cases,
retrofitting older buildings with ASHP technology involves modifying ductwork,
electrical systems, or insulation, which adds to the overall expense and
complexity.
Performance
Concerns in Extreme Cold Weather
Although technological advances have improved the cold
climate performance of air source heat pumps, concerns remain regarding their
reliability and efficiency during Canada’s harshest winter conditions. In
regions with extremely low temperatures, some consumers and installers still
worry that ASHPs may not provide sufficient heating without supplemental
systems, such as electric resistance heaters or traditional furnaces.
This perception affects market confidence, especially
in northern and remote areas where temperatures can drop well below freezing
for extended periods. Even with modern cold-climate models, performance can
decline as outdoor temperatures plummet, resulting in higher energy consumption
or decreased heating capacity. This potential for reduced efficiency may lead
some consumers to hesitate before fully transitioning to ASHPs, particularly if
they experience cold snaps or unpredictable weather patterns.
Key Market Trends
Integration
with Smart Home and Building Automation Systems
A significant trend in the Canadian air source heat
pump (ASHP) market is the increasing integration of heat pumps with smart home
and building automation technologies. Modern consumers and commercial building
managers seek enhanced control over their heating and cooling systems to
optimize comfort, energy savings, and operational efficiency. Manufacturers are
incorporating IoT (Internet of Things) capabilities into ASHPs, enabling remote
monitoring and control via smartphones or home assistants. Users can schedule
temperature settings, monitor system performance, and receive maintenance alerts,
all through intuitive apps. This connectivity allows for smarter energy
management, including demand response features where the system adjusts
operation based on electricity grid conditions or time-of-use rates.
In commercial and multi-residential buildings, ASHPs
are being integrated into broader building management systems (BMS), allowing
centralized control of HVAC, lighting, and other utilities. This holistic
approach helps reduce energy consumption, improve occupant comfort, and
facilitate compliance with green building certifications. As digitalization
grows across sectors, smart integration is set to become a standard feature,
driving market growth and enhancing user experience.
Growing
Adoption of Cold-Climate Heat Pumps
Canada’s cold weather has long been a barrier to air
source heat pump adoption, but recent years have seen a surge in the
development and acceptance of cold-climate heat pumps designed specifically to
perform efficiently at low temperatures. These advanced models feature enhanced
compressors, improved refrigerants, and sophisticated defrosting mechanisms
that enable reliable heating even in extreme winter conditions. According to
Natural Resources Canada, cold-climate heat pumps can maintain heating
efficiency at outdoor temperatures as low as -25°C, expanding their usability
across most Canadian regions.
Cold-climate heat pumps are gaining traction not only
in southern urban areas but also in northern and remote communities previously
reliant on oil, propane, or electric baseboard heating. This trend
significantly expands the addressable market. Energy utilities and government
programs actively promote cold-climate ASHPs as a key technology for reducing
fossil fuel dependency in heating. The increasing availability and awareness of
these specialized systems reduce consumer hesitation and open opportunities for
replacing outdated heating infrastructure, positioning cold-climate heat pumps
as a vital solution for Canada’s sustainable energy transition.
Expansion
of Service Networks and Financing Options
To support the growing demand for air source heat
pumps, there is a clear trend toward expanding installation, maintenance, and
service networks across Canada. Manufacturers and distributors are investing in
training and certifying more HVAC professionals skilled in heat pump technology
to ensure high-quality installations and customer support. According to
Efficiency Canada, over 3,000 HVAC technicians have received specialized heat
pump training between 2022 and 2024, helping address the skills gap and improve
service quality.
The availability of reliable service is crucial for
consumer confidence and long-term system performance, particularly given the
technical complexity of ASHPs and cold-climate models. Enhanced service
networks reduce installation wait times, improve maintenance response, and
foster positive word-of-mouth, which collectively boost market adoption.
Segmental Insights
Process
Insights
The air-to-air segment dominated the
Canada air source heat pump market due to its versatility, efficiency, and
cost-effectiveness. These systems transfer heat between indoor and outdoor air,
providing both heating and cooling in a single unit. Their relatively simple
installation and maintenance, combined with advanced cold-climate capabilities,
make them highly suitable for Canadian residential and commercial buildings.
Air-to-air heat pumps offer significant energy savings compared to traditional
HVAC systems and align well with government incentives promoting sustainable
heating solutions. Their growing popularity is driving strong market demand,
reinforcing air-to-air heat pumps as the leading segment in Canada.
Sales
Channel Insights
Direct sales dominated the Canada air
source heat pump market by enabling manufacturers and authorized dealers to
engage customers directly, ensuring personalized service and tailored
solutions. This sales model fosters strong relationships, builds trust, and
allows for better communication of product benefits, installation requirements,
and after-sales support. Direct sales also facilitate customized pricing,
bundling with installation services, and quicker response times compared to
third-party distributors. Additionally, with increasing consumer preference for
reliable sources and expert guidance, direct sales channels have become the
preferred method for purchasing air source heat pumps, driving higher market
penetration and customer satisfaction across Canada.
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Regional Insights
British Columbia (BC) was the dominating
segment in the Canada air source heat pump market due to its mild coastal
climate, progressive environmental policies, and strong government incentives
promoting clean energy solutions. The province’s focus on reducing greenhouse
gas emissions and enhancing energy efficiency has driven widespread adoption of
heat pumps in both residential and commercial sectors. BC’s rebate programs,
such as those under the CleanBC plan, lower upfront costs and encourage
consumers to switch from fossil fuel-based heating systems. Additionally, the
growing construction of energy-efficient buildings further supports demand,
making British Columbia a leading market for air source heat pumps in Canada.
Recent Developments
- In Feb 2025, Viessmann Canada has
introduced three new heat pump systems: the Vitocal 100-S single-zone
air-to-air ductless and ducted models, and the Vitocal 200-S multi-zone
ductless system. These systems are designed for residential and light
commercial applications, offering high-efficiency inverter technology, quiet
operation, and minimal installation requirements.
- In April 2024, Johnson Controls' YORK
brand introduced ssthe YMAE 575V high-efficiency air-to-water heat pump,
engineered to deliver decarbonized heating and cooling within a wide operating
range. This system meets Canadian Registration Number (CRN) requirements in
most provinces and can achieve up to 60°C (140°F) water temperatures even in
low ambient conditions.
- In Dec 2023, Canadian startup Terravis
Energy has introduced a prototype residential air source heat pump designed for
cold climates. Utilizing difluoromethane (R32) refrigerant, the system
demonstrated a seasonal coefficient of performance (SCOP) of approximately 3.0
under Ontario's environmental conditions.
Key Market Players
- GREE Electric Appliances Inc.
- Senvilla.Ca
- Mitsubishi Electric Sales Canada Inc
- Trane Technologies Company, LLC
- Wolf Steel Ltd.
- Hometown Heating Inc.
- Johnson Controls
- Panasonic Canada Inc
- Rheem Manufacturing Company
- Mr Cool Canada
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By Process
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By End Use
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By Sales Channel
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By Region
|
|
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- Residential
- Hotels & Resorts
- Gym & Spas
- Education
- Food Service
- Others
|
- Plumbers
- Dealers & Contractors
- Retail
- Direct Sales
- Online
- Others
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- Quebec
- Ontario
- Alberta
- British Columbia
- Saskatchewan & Manitoba
- Rest of Canada
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Report Scope:
In this report, the Canada Air Source Heat Pump
Market has been segmented into the following categories, in addition to the
industry trends which have also been detailed below:
- Canada Air Source Heat Pump Market,
By Process:
o Air to Air
o Air to Water
- Canada Air Source Heat Pump Market,
By End Use:
o Residential
o Hotels & Resorts
o Gym & Spas
o Education
o Food Service
o Others
- Canada Air Source Heat Pump Market,
By Sales Channel:
o Plumbers
o Dealers & Contractors
o Retail
o Direct Sales
o Online
o Others
- Canada Air Source Heat Pump Market,
By Region:
o Quebec
o Ontario
o Alberta
o British Columbia
o Saskatchewan & Manitoba
o Rest of Canada
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents
in the Canada Air Source Heat Pump Market.
Available Customizations:
Canada Air Source Heat Pump Market report with the
given market data, TechSci Research offers customizations according to a
company's specific needs. The following customization options are available for
the report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
Canada Air Source Heat Pump Market is an upcoming
report to be released soon. If you wish an early delivery of this report or
want to confirm the date of release, please contact us at [email protected]