Geothermal Heating and Cooling Market Report 2026

The geothermal heating and cooling market size has grown strongly in recent years. It will grow from $9.89 billion in 2025 to $10.66 billion in 2026 at a compound annual growth rate (CAGR) of 7.8%. The growth in the historic period can be attributed to adoption of geothermal heating in residential buildings, government incentives for renewable heating solutions, rising energy costs, technological improvements in heat pump efficiency, awareness about environmental benefits of geothermal systems.

The geothermal heating and cooling market size is expected to see strong growth in the next few years. It will grow to $14.32 billion in 2030 at a compound annual growth rate (CAGR) of 7.7%. The growth in the forecast period can be attributed to growing demand for sustainable commercial and residential HVAC solutions, increasing integration with smart building systems, adoption of hybrid renewable energy solutions, expansion of urban development projects, advancements in low-temperature geothermal technologies. Major trends in the forecast period include rising adoption of energy-efficient geothermal heat pumps, integration of ai for predictive maintenance and system optimization, growth of smart monitoring and control systems in geothermal hvac, increasing use of iot sensors for ground loop performance monitoring, enhanced efficiency through data-driven energy management solutions.

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.

Major companies operating 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, WaterFurnace International Inc., ClimateMaster Inc., Eavor Technologies Inc., STIEBEL ELTRON GmbH & Co. KG, Celsius Energy SAS, Nordic Heat Pumps Inc., Bosch Thermotechnology, Mitsubishi Electric Corporation, Johnson Controls International plc, Glen Dimplex Group, Fujitsu General Limited, Ariston Thermo Group, Viessmann Werke GmbH & Co. KG, LG Electronics Inc., Aermec S.p.A.

North America was the largest region in the geothermal heating and cooling market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the geothermal heating and cooling market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the geothermal heating and cooling market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, 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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