India’s Heat Pump Water Heater Market: An Emerging Efficiency Trend
- brg_news_room
- 1 day ago
- 3 min read
India’s water heating market is quietly entering a new phase, marked by the early but accelerating adoption of heat pump water heaters (HPWHs). Long dominated by electric “geysers” and supported by a niche solar segment, the market is beginning to pivot toward heat pump technology as energy efficiency shifts from a secondary consideration to a core purchasing criterion. Although HPWHs currently account for a small share of total installations, their growing visibility highlights a clear and durable trend toward high-efficiency water heating solutions.
The heat pump water heater segment is still in its early stages but is growing at a faster pace than the overall water heater market. Installations are expected to rise steadily, driven by a broader shift among consumers and developers toward prioritizing long-term operating savings over initial equipment costs. The overall market grew at a CAGR of 43.6% from 2020 to 2024 and is expected to continue growing at a CAGR of 31.4% over the next five years.
A key driver behind this trend is rising electricity tariffs combined with heightened awareness of energy efficiency and environmental impact. Heat pump water heaters use ambient air to heat water and can reduce electricity consumption by up to 60–70% compared to conventional resistance-based electric heaters. As energy costs continue to rise, this efficiency advantage is becoming a decisive factor, positioning HPWHs as a practical and increasingly mainstream alternative.
Residential adoption is strongest in urban areas, particularly in premium apartments and gated communities. Homeowners are showing growing interest in compact, lower-capacity heat pump systems that fit space-constrained homes while delivering consistent energy savings. This pattern mirrors a broader urban trend toward high-efficiency appliances that offer measurable lifecycle benefits and align with green living aspirations.
Commercial and institutional applications are emerging as a major growth engine. Hotels, resorts, hospitals, hostels, and large residential complexes require significant volumes of hot water and face sustained energy expenses. For these users, heat pump water heaters offer faster payback through reduced operating costs, making them an attractive choice for both new construction and retrofit projects. Sustainability credentials and green building standards are further reinforcing adoption in this segment.
Despite favourable trends, adoption is not without challenges. Higher upfront costs compared to conventional electric geysers remain a key barrier, particularly in price-sensitive markets. Limited consumer awareness and the need for trained installers and service networks also constrain expansion beyond major urban centres. However, these constraints are gradually easing as manufacturers invest in awareness-building, dealer training, and localized support infrastructure.
Within India’s broader water heater ecosystem, still largely dominated by electric water heaters with solar systems occupying a defined niche, heat pump water heaters represent a small but rapidly expanding segment. As energy efficiency norms tighten and consumers increasingly focus on total cost of ownership, HPWHs are expected to capture a growing share of future installations.
Overall, the rise of heat pump water heaters in India reflects a clear long-term market trend rather than a passing development. Driven by urbanization, changing consumer priorities, sustainability goals, and improving technology economics, HPWHs are steadily transitioning from niche adoption toward wider acceptance. Over the coming decade, this trend is likely to play a meaningful role in reshaping India’s water heating landscape.
Find out more in our latest edition of India HVAC report.
Source: Geetika Tandon, BRG Research
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