Heat pump industry research report: traditional energy shortage, European heat pump market boom escalated again

Technical solutions for achieving zero carbon in the thermal field

The essence of a heat pump is a heat transport device. Air source heat pump is an energy-saving technology that uses the principle of reverse Carnot cycle (reverse air conditioning) to drive the heat pump unit with a small amount of electrical energy, and through the working medium in the heat pump system to carry out a variable-phase cycle, the low-grade (difficult to use) heat energy in the air is absorbed and compressed and warmed up and then used to provide heating, cooling and hot water for residential, commercial and industrial and agricultural purposes. The source of heat obtained by air source heat pump is the thermal energy in the atmosphere, which has a wider range of applications; air source heat pump is more efficient in heat production, more energy-saving and environmentally friendly: air source heat pump needs to input electrical energy to do work when working, and the electrical energy input to the compressor can always be converted into a part of thermal energy, and a large amount of thermal energy absorbed from the external environment becomes an additional gain. Compared with coal and resistance heat, etc., air source heat pump has the least loss of heat energy and the highest heat use efficiency, which is more energy-saving and environmental friendly. According to the data of China Energy Conservation Association, if supplying 10kW heat to the room to maintain the room temperature at 20℃, using coal-fired heating needs to consume 14kW of chemical energy, resistance heaters need electrical energy to directly heat the air at 10kW, and electric heat pumps consume only 2.86kW of electrical energy.

Energy saving and cost saving, good to use but not expensive

Air source heat pump has low comprehensive use cost and high potential for product energy efficiency improvement. Compared to electric water heaters and gas water heaters, air source heat pumps as a less environmentally constrained heating products, heat pump water heaters annual energy consumption capacity of the cost of electric water heaters 1/4, is about 1/2 gas water heaters. And from the point of view of energy efficiency, 7% of heat pump products can reach 5 levels of energy efficiency.

Domestic market by the wind of policy

Domestic market: policy favorable to industry growth, "Carbon Dafeng" to create new opportunities for growth

"In 16-17 years, the implementation of the "coal to electricity" policy has significantly increased the volume; in 18 years, the growth rate has slowed down with the policy stimulation, and in 20 years, sales have declined due to the epidemic. The policy vacuum period has passed: in 2021, the action plan related to "carbon peak" will be introduced, and in 2022, the 14th Five-Year Energy Plan will be implemented. With the accelerated implementation of related building carbon reduction requirements, China's heat pump market size is expected to continue to rise. The Ministry of Finance's budget report shows that 30 billion yuan will be allocated for air pollution prevention and control in 2022, an increase of 2.5 billion yuan over last year, to further increase subsidies to support clean heating in northern areas.

The country launched relevant policies to support the development of heat pumps

Heat pump policy support and subsidy amounts continue to increase. For the heat pump industry in the domestic market development also launched in 2025 10 million square meters of new targets, the domestic market in the context of coal to electricity gradually weakened, and meet new development opportunities.

Domestic market competition pattern

Comprehensive brand overall market dominance, heating market professional brand advantages more obvious. From the overall point of view of the heat pump market, the concentration is general, CR4 is about 43%. From the heat pump heating market, the concentration is also relatively low, with a CR4 of about 34%. The concentration is higher in the hot water market, where comprehensive brand market share is obvious, with Haier, Midea and Gree all having a share of more than 15% and a CR4 of 67%, which is a high concentration.

Overseas market is booming

Export market: nearly 800 million U.S. dollars, exports to European countries have accelerated

China's heat pump exports totaled $793 million in 2021, a significant +100% year-on-year in 2021. European heat pump market sales 1.6 million units in 2020, China's main export countries to Europe including France (accounting for 19% of exports), Italy (accounting for 11% of exports), Germany (accounting for 10% of exports), the Netherlands (accounting for 6% of exports), Spain (accounting for 4% of exports), Poland (accounting for 4% of exports). 2021, 2022H1 high growth in exports of heat pumps to Europe.

Western Europe natural gas supply a high proportion of energy, heating products are currently dominated by natural gas

Western European countries have high dependence on Russian oil and natural gas.1) Europe is energy dependent on imports, with natural gas imports from Russia accounting for about 33% of total imports and oil imports from Russia accounting for about 27% of total imports (IEA).In 2021, the EU imported 155 billion cubic meters of Russian natural gas, including 142 billion cubic meters of pipeline gas and 14 billion cubic meters of liquefied natural gas.2) In terms of Europe's energy mix, natural gas is an important component of energy consumption. In Germany and France, for example, natural gas is in the second place in the energy consumption structure and has a high degree of external dependence.

Heat pump penetration is increasing year by year and is the next generation product to replace condensing boilers in the future

The heat pump penetration rate in Western Europe is increasing year by year. 2006-2020 European air source heat pump sales are growing rapidly, 2006-2020 European heat pump penetration rate increased from 12% to 21%, the penetration rate is increasing. In recent years, the European heat pump penetration rate growth accelerated, 17-20 years penetration rate increased by 5 pct. European Heat Pump Association estimates that the potential annual sales of heat pumps in Europe is 6.8 million units, the potential total installation volume of 89.9 million units. European heat pump market size 20-25 CAGR is expected to reach 15%. According to BSRIA data, the global heat pump market is expected to have a double-digit CAGR in 20-25, while the EU benefits from environmental protection policies, and the EU heat pump market CAGR is expected to be 15% in 2020-2025. Based on the sales of 1.6 million units in Europe in 2020, with a CAGR of 15% to calculate, the size is expected to reach 3.7 million units by 2025.

Clean energy policies drive forward demand, heat pumps gradually replace boilers

With the United States back to the Paris Agreement, the EU Green Agreement for 2030 energy saving and emission reduction clearly put forward planning guidelines, in addition to Europe, Australia, America heat pump demand is also continuing to grow. EU Green Agreement: 55% emission reduction in 2030, the future of new projects no longer install gas boilers, the annual sales of boilers in major European countries is about 5 million units, in 2030 we expect the heat pump will take over the boiler market, to achieve 5 million units of annual sales scale.

Competitive landscape: Finney has a clear lead in the export market, and Midea ranks second

Fenny is a professional manufacturer of heat pumps, and the company has established good cooperation relationship with overseas famous brands of swimming pool equipment, such as HAYWARD Group and FLUIDRA Group, and overseas famous brand of hot water equipment, such as RHEEM Group. With the advantage of pool machine and other products, Fenny achieved high growth in the export market, the market share of foreign sales in more than 25%, the leading advantage is obvious. The market share of Midea in the export market by sales reached 8.5% respectively, ranking second

Heat pump supply chain disassembly

Production capacity distribution: Guangdong Province is the main production area, heating enterprises from a variety of sources

Production capacity is concentrated in East China and South China, with Guangdong, Shandong, Anhui and Zhejiang as the main production areas. Air source heat pump China practitioners more than 500 companies, Guangdong Province heat pump production capacity is the most, between 1.2-4.6 million units, Shandong, Anhui production capacity between 900,000-1.2 million units, Zhejiang production capacity between 300,000-600,000 units in the middle. Comprehensive giants, energy-saving heating enterprises, emerging professional brands, old electric water heater enterprises gathered. The main players in the air energy heat pump industry are the traditional refrigeration leaders Gree and Midea, with their product development capabilities and channel capabilities in the market share lead. Solar water heater manufacturers such as Linuo Ruite, Sun Rain, Four Seasons Muge and other brands from the solar water heater to expand its product line into the market. Leading water heater companies also follow the trend of layout, electric water heaters such as Haier and A.O. Smith, combustion heat such as Wanhe, Wanjiale, etc.. There are also a number of emerging and fast-growing, specializing in the development and manufacture of air source heat pump water heaters, such as Newentay, CGO, Finney, Paiwo, CK Ford and the same benefit, and so on.

Air source heat pump industry chain combing

The main components of heat pumps include evaporators, valves, condensers, compressors, electronic control systems, etc. Heat pump systems and air conditioning systems have a high degree of overlap of spare parts, analogous to central air conditioning, the compressor in the heat pump products cost between 30%-40%, about 20% of the heat exchanger, the cost of the controller accounted for about 10%.

The upstream of air source heat pump is heat exchanger, compressor, controller

Fin heat exchanger accounts for a relatively high proportion, because the heat pump products outside the heat exchanger all use fin heat exchanger. There are more types of heat exchangers in the air source heat pump, such as micro-channel heat exchanger in the air source heat pump water heater, the use rate is higher, and the development is faster. Rotor type heat pump compressor in the heat pump compressor in the proportion of gradually expanding. It is still mainly driven by the household fan market. Household water coal to electricity market plummeted making scroll type heat pump compressor sales decline. Controller with hot water storage tank, thermostatic tank water temperature and water level control, pipeline circulation control, air energy heat pump / circulation pump / feed water solenoid valve control, etc.

Valve parts for heat pumps

The product structure of the valve parts for heat pumps is more consistent with the valve parts for commercial air conditioners. Including shut-off valves, four-way directional valves, electronic expansion valves, thermal expansion valves, solenoid valves and ball valves. The demand for the three major products is the largest, with the product structure accounting for 43.03%, 27.02%, and 26.24%, or a total of more than 96%. Specifically comparing the product distribution of valves for air source heat pumps by key enterprises, the product line of domestic brands is more complete, while foreign brands focus more on high value-added products.