Geothermal Heat Pump Market Size

Geothermal Heat Pump Market size was estimated at USD 12.9 billion in 2024 and is expected to surpass USD 25.3 billion by the end of 2037, rising at a CAGR of 5.8% during the forecast period, i.e., 2025-2037. In 2025, the industry size of geothermal heat pumps is evaluated at USD 13.6 billion.

The geothermal heat pump market is driven by increasing demand for efficient systems. With increasing energy costs concerns over climate change and government commands pushing for lesser carbon emissions, energy-efficient heating and cooling solutions have increased widespread attention. Governments across several regions have recognized the long-term energy-saving and environmental benefits of these systems and therefore announced tax credits, subsidies, and other incentives to encourage more adoption. By helping through decreasing the initial investment burden these incentives make geothermal systems financially viable for both commercial and residential users therefore boosting the market growth.

According to Research Nester, the 30% federal tax credit paired with electrification rebates can decrease household geothermal project costs by up to 50%, saving approx. USD 15,000 for higher-cost installations. The Investment Tax Credit can support commercial buildings, such as schools, retail outlets, and others to decrease upfront costs by 30–50% for a geothermal heat pump. Proper implementation of the new federal funding can help the geothermal market grow and decrease upfront costs even further.