The Vietnam heat pump market is experiencing significant growth in the recent years, fueled by urbanization, growing manufacturing base, and commitment to sustainability. The market is witnessing growing demand for major sectors including residential, commercial, and industrial. This demand is supported by country’s construction sector’s commitment to add 1.2 million new housing units by 2028. This will create high demand for energy-efficient heating and cooling solutions. The rising awareness of long-term cost savings is encouraging population to use heat pump for heating and cooling, reducing annual energy expenses by over 40%. Moreover, government introducing incentives and subsidies to push towards green energy is further accelerating demand for heat pumps in Vietnam.
What’s Driving Heat Pump Market is Vietnam?
- The country is experiencing growing demand for source heat pumps in residential settings. This increased demand is driven by shift towards energy-efficient and environmentally friendly heating and cooling solutions. Additionally, the growing use of air-to-air and air-to-water technology will further drive the residential heat pump market.
- The technological advancements and smart integration in heat pump system is growing attraction. The manufacturers are focusing on developing heat pumps which has advanced features including IoT connectivity, predictive maintenance, and enhanced energy management.
- The growing focus on sustainability and commitment to reduce carbon emissions is driving the heat pump market. The government is introducing incentives to encourage the use of energy-efficient appliances which includes heat pumps. This regulatory support is creating favorable environment for growth of eco-friendly heating and cooling technologies.
Market Competition
The Vietnam heat pump market is moderately competitive, with presence of international players and emerging local manufacturers. The key players dominating the market includes Daikin Industries Ltd., Mitsubishi Electric Corporation, and Panasonic Corporation. Daikin is a global leader and recently introduced advanced heat pump technologies that focuses on energy efficiency and environmental sustainability. Mitsubishi Electric is strengthening its presence in Vietnam by introducing heat pump system that cater to different market segment. In 2024, company launched new line of hybrid heat pumps that combines air-source and ground-source technologies to maximize efficiency. Meanwhile, Panasonic’s latest models include IoT-enabled controls that allows users to monitor and adjust settings remotely.
High Upfront Costs Hindering Adoption
The heat pumps are energy-efficient and has lots of environmental benefits but the initial investment cost of purchasing and installing is high. This financial hurdle is due to country’s price sensitive market, where consumers opt for less expensive products. The installation costs vary based on different factors including building size, system complexity, and regional labor costs. The installation costs of heat pumps are usually 30% higher than conventional HVAC systems.
Future Outlook
The Vietnam heat pump market is set to undergo rapid transformations through 2030. The country’s energy consumption is expected to reach 357 TWh by 2030, leading to growing demand for energy-efficient solutions including heat pumps. The integration of advanced technologies including IoT and AI in heat pumps is expected to reduce operation cost by 20%, highlighting higher adoption rates mainly in urban areas where smart home systems are becoming popular. The commercial and industrial sector is expected to dominate the demand for heat pumps market, with industrial sector accounting for 55% of the country’s total energy consumption. Furthermore, government’s target to reduce greenhouse gas emission by 25% by end of 2030 will accelerate the demand for energy-efficient heat pumps.
Consultant at Nexdigm In their latest publication “Vietnam Heat Pump Market Outlook to 2030: By Rated Capacity (Up to 10 kW, 10-20 kW, 20-30 kW, Above 30 kW), By Product Type (Air Source Heat Pump, Ground Source Heat Pump, Water Source Heat Pump, Exhaust Air Heat Pump, and Others), and By End Use Sector (Residential, Commercial, Hospitality, Retail, Education, Food and Beverage, Paper and Pulp, Chemicals and Petrochemicals, and Others)” believes that by leveraging smart technologies for market differentiation and expanding manufacturing and local assembly to reduce costs, businesses can gain competitive advantage in Vietnam heat pump market.