In the fight against climate change, all manner of energy-efficient technology is being employed, and heat pumps may be gaining more traction.

In the HVAC market, heat pumps have been touted for their generally superior energy efficiency compared to traditional gas furnaces. However, they have limitations, especially in colder climates, where their efficiency in warming buildings drops off considerably.

According to a new report from market research firm Guidehouse, heat pumps may have solved the riddle of colder climates, and the market is about to reflect that change. The report, “Residential Heat Pumps in Cold Climates,” was published in the second quarter of 2024.

It notes that the market for residential heat pumps in cold climates is expected to grow considerably over the next decade. It attributes that trend to technological advances, primarily in inverter-driven compressors and refrigerants, which have enabled heat pumps to perform well in cold climates.

Guidehouse adds that decarbonization goals and broader climate initiatives by governments and stakeholder organizations to decarbonize buildings will also help drive the market for heat pumps in cold climates over the next decade.

Heat pumps as an important tool in improving building energy efficiency and reducing their carbon emissions is not disputed. According to the International Energy Agency (IEA), heat pumps are three to five times more efficient than traditional gas furnaces for heating buildings. The IEA adds they also generate 20% fewer carbon emissions. The reduction can be even greater depending on how the electricity is generated. Advances in the technology making heat pumps more effective in cold climates will expand the reach and use of the technology to wider markets and increase its role in the fight against climate change.

Guidehouse predicts shipments of heat pumps in cold climates will grow from 4.8 million to 7.3 million between 2024 and 2033.