Australia Air Source Heat Pump Market, By Region, Competition Forecast & Opportunities, 2020-2030F

The Australia Air Source Heat Pump Market was valued at USD 2024 in 0.87 Billion, and is expected to reach USD 1.40 Billion by 2030, rising at a CAGR of 8.43%. The demand for air source heat pumps (ASHPs) in Australia is increasing steadily, driven by their application in residential and commercial heating, cooling, and hot water systems. Given Australia’s diverse climate, ASHPs are well-suited for efficient space conditioning and water heating across regions. While small generation solar units and solar hot water systems currently dominate installations, ASHPs have experienced a noticeable uptick in adoption, particularly since 2020. According to 2024 data from the Clean Energy Regulator, 501,085 ASHPs have been cumulatively installed, reflecting their growing appeal as energy-efficient alternatives amid Australia’s transition to cleaner, sustainable home energy solutions.

Key Market Drivers

Government Incentives and Policy Support

A primary driver of growth in the Australia air source heat pump market is the proactive support provided through government incentives and environmental policy initiatives. Programs like the Victorian Energy Upgrades (VEU) and rebates from Clean Energy Regulator schemes are encouraging both residential and commercial users to transition from outdated, high-emission systems to cleaner alternatives such as ASHPs. These financial incentives reduce upfront costs, making the systems more accessible and accelerating adoption, especially in areas with high electricity prices. Additionally, regulatory moves phasing out gas-based systems in favor of electric heating options are further stimulating demand. By supporting energy savings and emission reductions, government-backed programs have created a favorable environment for ASHPs to become an increasingly preferred choice among consumers.

Key Market Challenges

High Upfront Costs and Installation Barriers

Despite offering long-term cost savings and energy efficiency, air source heat pumps face a significant barrier in their high initial purchase and installation costs. Even with rebates, the investment required for ASHP units, installation, and potential electrical upgrades remains substantial, deterring many potential users - particularly in low-income segments. Installation complexities based on property type, size, and retrofitting needs can further escalate expenses. Compounding the issue is a lack of pricing transparency and inconsistent installation practices, making it difficult for consumers to evaluate their options. Without broader financial solutions such as low-interest financing or expanded subsidies, these costs remain a key challenge to wider market adoption.

Key Market Trends

Integration with Renewable Energy Systems

An emerging trend in the Australia air source heat pump market is the integration of ASHPs with solar photovoltaic (PV) systems. This combination enables homeowners to use solar energy to power their heat pumps, enhancing energy independence while reducing grid reliance and operational costs. It also aligns with national efforts to cut carbon emissions and improve residential energy efficiency. Incentive programs further support this integration, appealing to environmentally conscious consumers seeking sustainable home solutions. As investment in renewable energy infrastructure continues across Australia, the synergy between solar PV and ASHPs is expected to play a pivotal role in shaping the future of energy-efficient heating and cooling in the country.

Key Market Players

• Stiebel Eltron (Aust) Pty Ltd
• Daikin Australia Pty Ltd
• Rheem Australia Pty Ltd
• Aquamax Australia Pty. Limited
• Robert Bosch (Australia) Pty Ltd
• Evo Industries Australia Pty Ltd.
• Smart Lifestyle Australia Pty Ltd
• Rinnai Australia Pty Ltd
• Solargain Pty Ltd (iStore)
• Mitsubishi Electric Australia Pty Ltd.

Report Scope:

In this report, the Australia Air Source Heat Pump Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

Australia Air Source Heat Pump Market, By Technology:

• Air to Air (Ducts, Ductless)
• Air to Water (Split, Integrated)

Australia Air Source Heat Pump Market, By End Use:

• Residential
• Hotels & Resorts
• Gym & Spas
• Education
• Food Service
• Others

Australia Air Source Heat Pump Market, By Distribution Channel:

• Online
• Offline

Australia Air Source Heat Pump Market, By Region:

• New South Wales
• Victoria
• Queensland
• South Australia
• Western Australia
• Tasmania
• Northern Territory

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Australia Air Source Heat Pump Market.

Available Customizations:

With the given market data, the publisher 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).

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