Geothermal Heating and Cooling Global Market Report 2025

The geothermal heating and cooling market size has grown strongly in recent years. It will grow from $9.21 billion in 2024 to $9.89 billion in 2025 at a compound annual growth rate (CAGR) of 7.4%. The growth in the historic period can be attributed to rising oil prices, rising electricity and energy expenses, volatile cost of traditional fossil fuels, fast industrialization, and growing use of fossil fuels.

The geothermal heating and cooling market size is expected to see strong growth in the next few years. It will grow to $13.33 billion in 2029 at a compound annual growth rate (CAGR) of 7.7%. The growth in the forecast period can be attributed to growing demand for renewable energy sources, rise in demand for energy-efficient solutions, considerable government assistance in subsidies, incentives, and other financial benefits, emphasis on reducing carbon footprints intensifies, and rising population. Major trends in the forecast period include new product launches, integration of smart technology in system controls, geothermal potential for low- and medium-temperature resources, technological advancements, and digitalization of the power sector.

The forecast of 7.7% growth over the next five years reflects a modest reduction of 0.3% from the previous estimate for this market. This reduction is primarily due to the impact of tariffs between the US and other countries. Tariff-induced price hikes on ground loop heat exchangers and fluid transfer systems, commonly imported from European OEMs, are likely to dampen residential and commercial adoption of geothermal HVAC systems. The effect will also be felt more widely due to reciprocal tariffs and the negative effect on the global economy and trade due to increased trade tensions and restrictions.

The growing demand for sustainable energy solutions is expected to drive the growth of the geothermal heating and cooling market. Sustainable energy solutions focus on using renewable resources, such as solar, wind, and hydropower, to produce energy while minimizing environmental impact and protecting ecosystems. This shift towards eco-friendly alternatives is being driven by increased awareness of climate change and environmental degradation, which has motivated individuals and governments to adopt cleaner energy sources. Geothermal heating and cooling systems, which utilize the Earth's natural heat for temperature regulation in buildings, are a prime example of a sustainable energy solution. These systems reduce energy consumption, cut emissions, and rely on a renewable, low-impact resource. For example, in December 2024, Eurostat, the Luxembourg-based government agency, reported that in 2023, renewable sources accounted for 24.5% of the European Union's gross final energy consumption, marking a 1.5 percentage point increase from 2022. As a result, the growing demand for sustainable energy is fueling the growth of the geothermal heating and cooling market.

To improve geothermal system efficiency, major companies in the geothermal heating and cooling market are adopting proprietary technologies. Proprietary technology refers to a unique, company-developed system or method that enhances geothermal system performance. These technologies help improve efficiency, reduce installation costs, and improve temperature control through specialized heat exchange systems and advanced controls. For example, in September 2024, Dandelion Energy Inc., a US-based residential construction company, launched Dandelion Geo, the world’s most efficient geothermal heat pump. It provides up to 63,000 Btu/hr of heating and a coefficient of performance (COP) of up to 5.2, offering greater energy efficiency and reduced operating costs. Designed for easier adoption, the Dandelion Geo eliminates the need for most main panel upgrades, supports seamless integration with existing ductwork - especially in older and larger homes - and includes real-time performance monitoring and diagnostics to ensure long-term reliability.

In February 2025, Swegon AB, a Sweden-based provider of heating, ventilation, and air conditioning (HVAC) solutions, acquired American Geothermal for an undisclosed amount. With this acquisition, Swegon aims to enhance its presence in the North American market and expand its sustainable HVAC solution portfolio. The acquisition of American Geothermal, a US-based manufacturer specializing in geothermal heating and cooling systems, enables Swegon to leverage its expertise in heat pumps and chillers, aligning with increasing demand driven by environmental regulations and decarbonization initiatives.

Geothermal heating and cooling is a system that utilizes the stable temperatures beneath the Earth's surface to regulate indoor temperatures in buildings. This system transfers heat between the ground and buildings using a network of underground pipes, called ground loops, and heat pumps, reducing reliance on traditional energy sources and lowering greenhouse gas emissions.

The main types of geothermal heating and cooling systems are closed-loop and open-loop. Closed-loop systems circulate a heat transfer fluid through a sealed underground loop to efficiently exchange heat with the earth, without coming into direct contact with groundwater. The product types include packaged geothermal systems and split geothermal systems. These systems are used in various applications such as residential and commercial buildings and are distributed through both direct and indirect sales channels.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The sharp rise in U.S. tariffs and the ensuing trade tensions in spring 2025 are having a notable impact on the utilities sector, particularly across power generation, grid modernization, and renewable energy initiatives. Increased duties on imported equipment such as turbines, transformers, solar panels, and battery storage systems are driving up both capital and operational expenses for utility companies, prompting many to delay projects or pass higher costs on to consumers through increased energy rates. The water and waste management sectors are similarly affected, as tariffs inflate the cost of essential machinery, piping, and treatment technologies. Moreover, retaliatory tariffs from key trading partners have disrupted the supply of critical raw materials - such as rare earth elements vital for clean energy technologies - posing further challenges to the shift toward sustainable energy. In response, the sector is increasingly focusing on domestic procurement, digital transformation, and efficiency-enhancing innovations to control rising costs while safeguarding energy reliability and meeting regulatory demands.

The geothermal heating and cooling market research report is one of a series of new reports that provides geothermal heating and cooling market statistics, including the geothermal heating and cooling industry global market size, regional shares, competitors with the geothermal heating and cooling market share, detailed geothermal heating and cooling market segments, market trends, and opportunities, and any further data you may need to thrive in the geothermal heating and cooling industry. This geothermal heating and cooling market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

Major players in the geothermal heating and cooling market are Robert Bosch GmbH, Daikin Industries Ltd., Carrier Global Corporation, Trane Technologies plc, NIBE Industrier AB, Vaillant GmbH, AAON Inc., WaterFurnace International Inc., ClimateMaster Inc., Eavor Technologies Inc., STIEBEL ELTRON GmbH & Co. KG, K&S Heating & Air Conditioning Inc., Metco Engineering Inc., Aire Serv LLC, EcoSmart Solution LLC, Endurant Energy LLC, Celsius Energy SAS, Direct Energy Australia Pty Ltd, Nordic Heat Pumps Inc., Enertech Global LLC, Efficiency Maine Trust, J & R Herra Inc., Nunning Heating Air Conditioning and Refrigeration Inc.

North America was the largest region in the geothermal heating and cooling market in 2024. Asia Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in geothermal heating and cooling report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.

The countries covered in the geothermal heating and cooling market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The geothermal heating and cooling market consists of revenues earned by entities by providing services such as operation and maintenance, system installation and integration, site assessment and feasibility studies, consulting and project management, monitoring and control services. The market value includes the value of related goods sold by the service provider or included within the service offering. The geothermal heating and cooling market also includes sales of control systems, monitoring and maintenance equipment, buffer and storage tanks, ground heat exchangers, geothermal heat pumps. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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