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Market Overview

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The U.S. residential heating system market was valued at USD 10.8 billion in 2022 and is projected to reach USD 13.97 billion by 2028, with a compound annual growth rate (CAGR) of 4.39%. This market is experiencing significant changes as heating products are increasingly integrated with Internet of Things (IoT) technology, making them more innovative and accessible. There is a growing focus on connecting various sensors within building ecosystems, including heating pumps and geothermal heating systems, to achieve better energy efficiency. Additionally, factors such as rising raw material prices, supply chain disruptions, and the surge in oil prices due to the Russian-Ukraine conflict are driving end-users to shift toward more energy-efficient heating systems in the U.S. residential heating system market.

Shipments of residential heating systems in the U.S. are expected to reach 11,903.69 thousand units by 2028. Given the diverse weather conditions and varying climates across the country, the demand for heating systems in the residential sector is significant. Residential customers have a range of options when it comes to choosing heating equipment and fuels for both primary and secondary heating purposes. The installation of heating equipment in residential buildings throughout the country is expected to drive industry growth during the forecast period. Heat pumps, in particular, hold a significant share in the sales volume of heating equipment for residential use, thanks to the increasing construction of residential units.

Many organizations are turning to smart heating systems to reduce their electricity expenses. Smart IoT heating solutions offer a way to optimize energy consumption without disrupting consumer service. IoT technology has the potential to revolutionize heating systems, enabling manufacturers to improve productivity and optimize assets. Innovations in heating technology are currently in the early stages, and IoT integration in heating falls under both infrastructure IoT and consumer IoT, providing greater flexibility and smart controls for consumers. Therefore, the demand for smart heating systems in the U.S. residential heating system market is expected to grow during the forecast period.

Geothermal heating systems, which utilize the consistent ground temperatures six feet below the surface, are an extension of the growing trend towards sustainable energy sources in the United States. As fossil fuel supplies rapidly deplete, the energy-intensive heating industry is undergoing a transition. Traditional energy sources are increasingly being phased out due to concerns about climate change, pollution, energy security, and high costs. Heating accounts for a significant portion of electricity consumption, and geothermal heating systems offer cost-effective water heating solutions. Water heating costs are typically high, but geothermal heat pump systems can reduce these costs by up to 65%. Consequently, the demand for geothermal heating systems is expected to increase in the U.S. residential heating system market in the coming years.

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Market Segmentation

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The market is segmented based on various factors, including

Segmentation by Heating Equipment
Heat Pump
Boiler Unit
Furnace
VRF
Others

Segmentation by End-User
Single-Family Housing
Multi-family Dwelling

Segmentation by Distribution Channel
Online
Offline

Segmentation by Region
South
West
Midwest
Northeast

In 2022, the heat pump equipment market in the U.S. reached a value of USD 4.87 billion. Heat pumps are considered crucial heating systems, primarily used in colder regions for heating purposes. However, they can also be utilized for cooling by reversing the direction of heat flow. The demand for heat pumps primarily stems from their high efficiency, as they produce four times more energy than they consume. Consequently, heat pumps have become a reliable source of revenue for the industry and have witnessed substantial growth and continuous innovation.

The single-family housing segment, valued at USD 7.92 billion in 2022, commands a significant share in the industry. Single-family houses have higher operational energy costs compared to multi-family houses. Various heating systems can be categorized based on parameters such as the heat-carrying medium, energy sources, and heat-transmitting process. Over the past few years, increased disposable incomes and savings among consumers have driven residential improvements, particularly in the Midwest. Additionally, the construction of skyscrapers and high-story residential buildings in rapidly growing states like Florida, California, and New York has further stimulated industry growth.

Offline distribution channels dominate the U.S. residential heating system market, accounting for 62.42% of the revenue share. This segment is anticipated to experience incremental growth of USD 1.76 billion during the forecast period. The expansion is driven by factors such as wider accessibility in areas with limited connectivity and the consumer trust associated with personally experiencing product quality.

Although the online channel currently holds a smaller share of the U.S. residential heating system market, it is projected to grow at a higher compound annual growth rate (CAGR) of 5.11% in terms of value during the forecast period. The increasing prevalence of e-commerce and growing awareness of the benefits of online purchasing, such as significant discounts and occasional offers, coupled with rising demand for convenience, are fueling the growth of this segment.

In 2022, the Southern region led the U.S. residential heating system market with a revenue share of 34.27%. This dominance can be attributed to the region’s high population density compared to other areas in the country. The presence of numerous households in the region translates to a strong demand for space heating technology in the residential sector, thereby supporting market expansion.

The western region of the U.S., which includes major states such as Colorado, Wyoming, Montana, Idaho, Washington, Oregon, Utah, Nevada, California, Alaska, and Hawaii, witnessed a residential heating system market worth USD 2.8 billion in 2022. According to the US Bureau of Economic Analysis, Colorado and Utah experienced the highest increase in personal income, around 5.9% and 5.7% respectively, from Q2 to Q3 2021 in the western region. Consequently, such income growth is expected to shift consumer interest from conventional heating to space heating technology, thereby driving the demand for heat pumps and boilers in the U.S. residential heating system market during the forecast period.

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Competitive Landscape

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The U.S. residential heating market is characterized by the presence of numerous large and small players. Key industry players such as Systemair, Johnson Controls, Zehnder, Ostberg, and Aldes play a significant role in the U.S. residential heating system industry. Additionally, other notable players, including L.G., Panasonic, Carrier, Regal, and others, operate in this industry. These prominent vendors focus on advancing their heating systems, investing in research and development initiatives, expanding their product lines, and gaining a competitive edge in the U.S. residential heating system market.

However, market challenges arise due to the short time-to-market and limited acceptance of new technologies. Research and development investments are primarily geared towards reducing production costs and enhancing existing product technology rather than developing new products. Consequently, many mergers and acquisitions take place to foster the development and enhancement of offerings, attributes, and survival in the U.S. residential heating system market.

Key companies profiled in this report include Samsung, Systemair, Johnson Controls, Zehnder, Aldes, Bosch, Daikin, Mitsubishi Electric, Rheem Manufacturing, LG, Panasonic, Carrier, Midea, Regal Rexnord, Flakt Group, Beijer Ref, Flexit, Grundfos, Swegon, VTS, Nuaire, Nortek, Alfa Laval, Hitachi, Lu-Ve, Vent-Axia, S & P, Wolf, CIAT, Al-Ko, Dynair, Danfoss, Lennox, Backer Springfield, Dunhambush, TCL, Trox, Ingersoll Rand, Camfil.

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Key Questions Answered

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What is the projected size of the U.S. residential heating system market?

The U.S. residential heating system market is projected to reach a size of USD 13.97 billion by 2028, up from USD 10.8 billion in 2022.

What is the expected growth rate of the U.S. residential heating system market?

The U.S. residential heating system market is expected to grow at a compound annual growth rate (CAGR) of 4.39% from 2022 to 2028.

What will be the volume-based market share of the U.S. residential heating system market in 2027?

The U.S. residential heating system market is expected to have a volume-based market share of 11,903.69 thousand units by 2028.

Which region dominates the U.S. residential heating system market in terms of market share?

As of 2022, the Southern region holds the largest market share in the U.S. residential heating system market, accounting for 34.27% of the revenue share.

Who are the major players operating in the U.S. residential heating system market?

The major players in the U.S. residential heating system market include Samsung, Systemair, Johnson Controls, Zehnder, Aldes, Bosch, Daikin, Mitsubishi Electric, and Rheem Manufacturing.