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“The report reviews, analyzes and projects the global market for Heat Pumps, used in space cooling, heatingand sanitary hot water applications, for the period 2010-2020”

A Global Market Overview

Heating, Cooling and Hot Water

Heat Pumps

Report Code: MG005Pages: 500Charts: 273Price: Sample

Published: March 2014

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Heat Pumps (Heating, Cooling and Hot Water) – A Global Market Overview © Industry Experts, All Rights Reserved

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INTRODUCTION

Bolstered by increasing consumer preference for more environmental friendly and energy efficiency, the demand for heat pumps is anticipated to grow at a robust rate. The phenomenon is well backed by energy policies, regulations and incentives by the government. Among various types of heat pump technologies, gas driven, hybrid and Co2 heat pumps are expected to gain the market share in the coming years. Since CO2 heat pumps offer a climate and ozone friendly and energy efficient technology alternative, demand for these heat pumps has been witnessing an increase across the residential and commercial sectors. Gas heat pumps (GHPs) offer an eco-friendly alternative for heating and cooling in commercial, industrial and residential buildings, with the capability of achieving up to 150% efficiency. With their popularity firmly entrenched in markets, such as Japan and South Korea, heat pumps driven by gas engines have been much in focus in several European countries, such as France, offering a bright prospect in cornering substantial market share within the overall heat pumps market in the future. Almost all air conditioners sold in Japan are heat pump type, whereas around 85% in China and 75% to 80% of air conditioners sold in Europe are heat pumps.

Heat pump types analyzed, for space cooling, space heating and sanitary hot water heating, in this study include air to air, air to water and ground source heat pumps. The global heat pumps market is estimated at xx.x million units in 2013 and forecasted to grow at a 2014-20 CAGR of xx.x%. The heat pumps market worldwide is further projected to reach xx.x million units by 2020. In terms of value, global demand for heat pumps is anticipated to reach a projected US$ xx.x billion by 2020 from an estimated US$ xx.x billion in 2013. Air to air heat pumps are commonly used for both cooling and heating in regions such as Japan, China and few of European countries including Italy, Spain and Greece. Air to air is the largest segment of heat pumps type and accounting for over xx.x % of overall heat pumps market, in terms units, globally.

Sales of air to water heat pumps were the fastest growing segment at a CAGR of xx.x % over 2007-2010, reaching xx.x million units in 2010 from an estimated xx.x thousand units in 2007. Further, volume sales of air to water heat pumps are likely to surpass the other heat pump categories by registering a 2014-2020 compounded annual growth rate of xx.x % in regions such as the United States and China.

The report reviews, analyses and projects the heat pumps market for global and the regional markets including North America, Europe and Asia-Pacific. The regional markets further analyzed for 23 independent countries across North America – The United States and Canada; Europe – Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Italy, The Netherlands, Norway, Poland, Spain, Sweden, Switzerland, The United Kingdom and Rest of Europe; and Asia-Pacific – China, Japan, South Korea, Australia and Rest of Asia-Pacific.

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The study includes 273 charts (includes a data table and graphical representation for each chart), supported with meaningful and easy to understand graphical presentation of market numbers. The statistical tables represent the data for the global heat pumps market volume in units and value in USD by geographic region and heat pump type. The report profiles 42 key global players and 156 major players across North America – 30; Europe – 100; and Asia-Pacific – 26. The report also provides the listing of the companies engaged in the manufacturing and supply of heat pumps. The global list of companies covers addresses, contact numbers and the website addresses of 418 companies.

A Snapshot on Global Heat Pumps Market (2014 & 2020) by Heat Pump Type in Units & Market Value

About xx% of the volume sales in 2014 are expected to be of Air-Air HPs, which are forecast at xx.x million units in that year and further anticipated to post a CAGR of about xx% over 2014-2020 and reach a projected xxx.x million units by 2020. In terms of value, too, demand for Air-Air HPs dominates the global scenario, forecast to be US$ xxx.x billion in 2014 (xxx.x % share) and further projected to reach US$ xxx.x billion by 2020. However, in terms of fastest growth, both volume sales and value demand for Air-Water HPs are primed to outpace the other Heat Pump segments during this period. Maintaining a CAGR of xxx.x % between 2014 and 2020, volume sales of Air-Water HPs globally are projected to reach xxx.x million units by 2020 from a forecast xxx.x million units in 2014. In contrast, Ground Source HPs are expected to constitute the slowest growing category of Heat Pumps in regard to both volume and value sales. Volume sales of Ground Source HPs, forecast to be xxxx thousand units in 2014, are further likely to sustain a 2014-2020 CAGR of x% and reach a projected xxxx thousand units by 2020. During the same period, value demand for Ground Source HPs is likely to exhibit a CAGR of xx.x% in reaching a projected US$x.x billion by 2020 from an estimated US$x billion in 2014.

Year Air-Air HPs Air-Water HPs Ground/Water-Water HPs Total

Volume Value Volume Value Volume Value Volume Value

2014 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx

2020 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx

CAGR% xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

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Types of Heat Pumps

Based on sources, the most widely used types of heat pumps in the industry today include air source heat pumps and ground/water source heat pumps.

Air Source Heat Pumps (ASHPs) Air source heat pumps utilize the ambient energy in external air or exhaust air to heat, cool and prepare hot water. They are also called mono-bloc since they offer the capability of being installed as total compact units either within or outside a building. They can also include one unit inside a building and one unit outside, which are referred to as split systems. Typically, the distribution of heat inside the building is achieved either through a hydronic distribution system or through air using fan coils or a ducted ventilation system. Technical advancements in air source heat pumps witnessed in recent times enable in their being used efficiently under virtually any type of climatic condition.

In a majority of regions, air-to-air central, split and room air conditioners constitute the most commonly used technologies for air conditioning, be it for a single room or for an entire building. These systems are usually reversible, implying that they also provide heating in addition to cooling.

Air source heat pumps, also termed as air-to-water heat pumps, provide sanitary hot water and space heating, offering the capability of operating as low as -25oC and eliminating the requirement of expensive ground or water loops.

Ground/Water Source Heat Pumps Ground source heat pumps make use of energy stored in the ground for heating, cooling and preparing hot water, extracting the ground heat with a vertical or a horizontal collector. The distribution of heat is typically achieved by using a hydronic distribution system or the medium of air. The use of a consistent ground level temperature enables in the efficient operation of ground source heat pumps.

Ground source heat pumps (GSHPs) employ brine-to-water or brine-to-air heat pumps in combination with a heat exchanger loop buried in the ground, with the possibility of having a direct exchange with the heat sink/source systems. Such heat pumps offer greater cold weather efficiencies compared to air source heat pumps.

Water source heat pumps use energy stored in ground, surface or sea water. When easily available, the ground water is accessed via two points drilled into the ground, of which is used as a source of water and the other is used for re-injecting the water into the ground. Heat from the water is extracted by the heat pump, which is then used for heating and cooling spaces, as also for heating water. These heat pumps also commonly use a hydronic distribution system or air with fan coils or a ducted ventilation system for distributing heat inside a building. Water source heat pumps offer a high degree of efficiency because water as a carrier of energy offers outstanding temperature characteristics.

Water-to-water and water-to-air heat pumps derive benefit from an available water source as the heat source or sink, offering efficiencies that are typically higher than air source heat pumps.

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KEY MARKET TRENDS

Global Regulatory and Incentivized Developments for Heat Pumps

Federal Tax Credits for Heat Pumps in the United States

Hot Water Heat Pumps For electric heat pump water heaters with energy factor ≥ 2.0 in the United States, a tax credit of US$300 was offered till December 2013, when it was discontinued. Formulation of new rules for domestic water heaters has been set for 2015, which while conserving energy could also result in costlier purchases and installations.

From 2015, while stringent new standards for energy factor ratings related to gas, oil, electric tank, table top water heaters, and instantaneous gas and electric water heaters have to be complied with, several tankless systems have already achieved the same.

The United States Department of Energy (DOE) anticipates that these regulations would enable in saving about US$63 billion in energy costs between 2015 and 2044, in addition to precluding the emission of 172.5 million metric tons of carbon dioxide that can be equated to annual greenhouse gas emissions of about 33.8 million automobiles.

Existing current efficiency standards mandate gas-fired storage units to have an energy factor (EF) of 0.59. However, the new standards would mandate gas-fired water heaters below 55 gallons to have an EF of 0.62 and gas-fired water heaters above 55 gallons to have an EF of 0.76. Standards for electric storage would rise from the existing EF of 0.90 to an EF of 0.95 for units below 55 gallons and an EF of 2.0 for units exceeding 55 gallons. Efficiency standards for oil-fired storage water heaters would go up from the existing EF of 0.53 to 0.62, with the same for gas-fired tankless water heaters going up from an EF of 0.62 to 0.82.

Ground Source Heat Pumps The heat pumps mentioned as under carry a tax credit (inclusive of installation costs) of 30% of the cost without any upper limit. This credit is set for expiry on December 31, 2016. Availing this tax credit would necessitate the heat pumps in meeting the requirements of the ENERGY STAR program that have been effective at the time of the expenditure.

Heat Pump Type Requirements to be Met

Water-to-Air Closed Loop: EER ≥ 17.1, COP ≥ 3.6 Open Loop: EER ≥ 21.1, COP ≥ 4.1

Water-to-Water Closed Loop: EER ≥ 16.1, COP ≥ 3.1 Open Loop: EER ≥ 20.1, COP ≥ 3.5

Direct Expansion EER ≥ 16, COP ≥ 3.6

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KEY BUSINESS TRENDS

February 2014

Menerga AG and its Product Distributors in Germany Acquired by Systemair

Menerga AG in Switzerland and its product distributors (Menerga sales companies) in Hamburg, Hannover and Berlin in Northern Germany have been acquired by Systemair AB in this year January. Menerga AG engages in the marketing and servicing of Menerga products and had an annual turnover of nearly SEK 50 million in 2013. As Switzerland is a significant market for Menerga, Systemair would look forward to join forces with its present sales company in Switzerland.

January 2014

Opening of ATW Heat Pump North Production Base by Yangzi

Yangzi has opened the air-to-water (ATW) heat pump north production base located at Quanjiao Industry Park, Chuzhou, Anhui Province in Northern China. This production base would be one of the largest ATW heat pump water heater production bases in China.

December 2013

PZP HEATING Acquired by Kermi

PZP Komplet a.s.' PZP HEATING a.s. based in Dobre, Czech Republic has been acquired by AFG Arbonia-Forster-Holding AG's subsidiary, Kermi GmbH to broaden Kermi product portfolio by adding PZP HEATING's air, water and brine heat pumps with an superior price-performance ratio to the present Kermi "x-optimized" heating system. This Kermi heating system has been introduced by the Heating Technology Business Unit of the AFG Heating Technology and Sanitary Equipment Division in 2013. This system includes a heat pump, storage, regulation and heat transmission (flat-panel radiator/panel heating and cooling), which would best fit for novel construction and renovation, mainly concentrating on the energy modernisation of individual and partially-independent houses. This acquisition would allow the business unit to provide pleasing system solutions that have been designed for the novel construction sector in particular. This broadened range of products would be developed as per the Kermi standards and would be sold under the Kermi brand through specific distributors in Germany.

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GLOBAL MARKET OVERVIEW

The global volume market for Heat Pumps is estimated at xx.x million units in 2013 and forecast to be xx.x million units in 2014. Maintaining a CAGR of xx.x% between 2014 and 2020, the heat Pumps volume market worldwide is further projected to reach xxx.x million units by 2020. In terms of value, global demand for Heat Pumps is anticipated to register a marginally faster CAGR of xx.x% over 2014-2020 and reach a projected US$xxx.x billion by 2020 from an estimated US$xx.x billion in 2013 and a forecast US$xx,x billion in 2014.

In contrast to what has been projected for the future as regards growth rates, the years between 2010 and 2013 witnessed a faster growth in volume sales of heat Pumps on a global basis, which compounded at an annual rate of x.x%, while value sales were slower at x.x%.

Chart 1: Global Heat Pumps Market Overview (2010-2020) by Volume in Units and Value in USD Million

Year Volume (Units) Value (US$ Million)

2010 xxxxxxxxxxx xxxxxxxxx 2011 xxxxxxxxxxx xxxxxxxxx 2012 xxxxxxxxxxx xxxxxxxxx 2013 xxxxxxxxxxx xxxxxxxxx 2014 xxxxxxxxxxx xxxxxxxxx 2015 xxxxxxxxxxx xxxxxxxxx 2016 xxxxxxxxxxx xxxxxxxxx 2017 xxxxxxxxxxx xxxxxxxxx 2018 xxxxxxxxxxx xxxxxxxxx 2019 xxxxxxxxxxx xxxxxxxxx 2020 xxxxxxxxxxx xxxxxxxxx CAGR% 10-13 xxxxxxxxxxx xxxxxxxxx CAGR% 14-20 xxxxxxxxxxx xxxxxxxxx

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Valu

e (U

S$ M

illio

n)

Volu

me

(Uni

ts)

Volume (Units) Value (US$ Million)

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Ground/Water to Water Heat Pumps

Historical Trend

Volume Analysis

Over the 2007-2010 analysis period, volume sales of Ground Source HPs worldwide exhibited a CAGR of x.x% and reached xxx.x thousand units in 2010 from xx.x thousand units in 2007. While Asia-Pacific represented the fastest growing market for Ground Source HPs and posted a compounded annual rate of xx.x% during this period, European sales recorded the slowest growth at just x%. North America also recorded a healthy CAGR of xx.x% for volume sales of Ground Source HPs between 2007 and 2010.

Chart 20: Global Ground/Water-Water Heat Pumps Market Historical Trend (2007-2010) by Geographic Region - North America, Europe and Asia-Pacific in Units

Year North America Europe Asia-Pacific Total

2007 xxxxxxx xxxxxxx xxxxxx xxxxxxxx 2008 xxxxxxx xxxxxxx xxxxxx xxxxxxxx 2009 xxxxxxx xxxxxxx xxxxxx xxxxxxxx 2010 xxxxxxx xxxxxxx xxxxxx xxxxxxxx CAGR% 07-10 xxxxxxx xxxxxxx xxxxxx xxxxxxxx

2007 2008 2009 2010

North America Europe Asia-Pacific

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Austria Belgium Bulgaria Czech Republic Denmark Finland France Germany Greece Italy Netherlands Norway Poland Spain Sweden Switzerland United Kingdom Rest of Europe

Major Heat Pump Types Market Overview by European Region

Air to Air Heat Pumps

Volume Analysis Volume demand for Air-Air Heat Pumps (HPs) in Europe, estimated at x.x million units in 2013 and forecast to be x.x million units in 2014, is further expected to maintain a CAGR of x.x% between 2014 and 2020 to reach a projected x.x million units by 2020. Italy constitutes the largest European volume market for Air-Air HPs, estimated to account for a 2013 share of xx.x% or xxx.x thousand units. Forecast to be xxx.x thousand units in 2014, the Italian volume market for Air-Air HPs is further likely to register a modest 2014-2020 CAGR of x.x% and reach a projected x.x million units by 2020. In terms of growth, though, the Swiss volume market for Air-Air HPs is poised to post the fastest compounded annual rate of xx.x% between 2014 and 2020, reaching a projected xxx units by 2020 from an estimated xxx units in 2013 and a forecast xxx units in 2014. Bulgarian volume market for Air-Air HPs is likely to record the slowest corresponding period CAGR of x% and reach a projected xx.x thousand units by 2020 from an estimated xx.x thousand units in 2013 and a forecast xx.x thousand units in 2014. Between 2010 and 2013, Belgium was the fastest growing Air-Air HPs market in Europe, with a compounded annual rate of xx.x%, while Bulgaria witnessed a CAGR of xx.x% over this period to reflect a significant decline in volume demand for Air-Air HPs.

Chart 78: European Air-Air Heat Pumps Market Overview (2010-2020) by Region - Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Poland, Spain, Sweden,

Switzerland, United Kingdom and Rest of Europe in Units

Country/Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 CAGR% 10-13

CAGR% 14-20

Austria xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Belgium xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Bulgaria xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Czech Republic xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Denmark xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Finland xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx France xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Germany xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Greece xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Italy xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Netherlands xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Norway xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Poland xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Spain xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Sweden xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Switzerland xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx United Kingdom xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Rest of Europe xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx Total xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxx xxxxx

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South Korean Heat Pumps Market Overview by Heat Pump Type

Historical Trend

Volume Analysis

Volume sales of Heat Pumps in South Korea stood at xx.x thousand units in 2007 and reached xxx.x thousand units in 2010 by maintaining a robust CAGR of xx.x% between the two years. Air-Water HPs constituted the fastest growing Heat Pump category in the region, with a volume compounded annual rate of xx.x%, while Air-Air HPs posted the slowest growth at xx.x% over 2007-2010.

Chart 254: South Korean Heat Pumps Market Historical Trend (2007-2010) by Heat Pump Type - Air-Air, Air-Water and Ground/Water-Water in Units

Year Air-Air HPs Air-Water HPs Ground/Water-Water HPs Total

2007 xxxxxxxx xxxxxx xxxxxxx xxxxxxx 2008 xxxxxxxx xxxxxx xxxxxxx xxxxxxx 2009 xxxxxxxx xxxxxx xxxxxxx xxxxxxx 2010 xxxxxxxx xxxxxx xxxxxxx xxxxxxx CAGR% 07-10 xxxxxxxx xxxxxx xxxxxxx xxxxxxx

2007 2008 2009 2010

Air-Air HPs Air-Water HPs Ground/Water-Water HPs SAMPLE

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ANNEXURE

RESEARCH METHODOLOGY

Scope of the Study

The study is aimed to explore the market insights of Global Heat Pumps (for space heating, cooling and sanitary hot water) for the below mentioned product types and geographic regions.

Product Types Heat Pump Types analyzed in this report include the following –

► Air Source Heat Pumps (Air to Air and Air to Water)

► Ground Source Heat Pumps (Ground-Water, Water-Water, Ground Direct Expansion and other ground source)

Region Coverage

The study is conducted on a global level and the market for Heat Pumps is analyzed for the following regions/countries –

► North America (United States and Canada)

► Europe (Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Italy, The Netherlands, Norway, Poland, Spain, Sweden, Switzerland, The United Kingdom and Rest of Europe)

► Asia-Pacific (China, Japan, South Korea, Australia and Rest of Asia-Pacific)

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