Heat pump market takes shape as Carrier entry creates four-way race

Samsung Electronics' high-efficiency heat pump heating and cooling system "EHS All-in-One," displayed at CES 2026 in January. [Samsung Electronics]

As the government accelerates its heating electrification drive, the competitive landscape in South Korea's air-source heat pump market is coming into focus. With Carrier joining Samsung Electronics, LG Electronics and Daesung Heat Energies as a government-backed supplier, the market is shaping up as a four-way race. President Lee Jae-myung's personal push to expand heat pump adoption is expected to intensify the scramble for early market share.

However, Kyung Dong Navien — the boiler maker that had been the most aggressive in pursuing the heat pump business — was passed over for the second consecutive round of government selection. The company says the setback will not derail its heat pump ambitions, pointing to the program's early stage and its newly established domestic production base.

Carrier workers on the residential heat pump boiler production line at the company's Gwangju factory. [Carrier]

Carrier joins the fray, completing a four-way heat pump field

The Ministry of Climate, Environment and Energy announced Tuesday that Carrier and Daesung Heat Energies had been added to the second round of eligible products under the 2026 Heating Electrification Program. Two Carrier heat pump models qualified for government support for the first time, while Daesung Heat Energies expanded its lineup by adding a 10-kilowatt model alongside its existing 16-kilowatt unit. The program now covers 13 models from four companies — Samsung Electronics leads with six models, followed by LG Electronics with three, and Daesung Heat Energies and Carrier with two each.

Carrier, the newly added participant, is a joint venture between global HVAC giant Carrier Global and Otek, with heating, ventilation and air conditioning as its core business. The company covers residential air conditioners as well as HVAC systems for commercial buildings and industrial facilities, positioning it to generate synergies between its heat pump push and existing operations.

Carrier had been preparing to enter the heat pump market well ahead of the current boom. It began developing an inverter hybrid boiler in 2011, before the domestic market had taken shape, and started selling the product in 2014. The company now plans to mount a full-scale push into the residential heat pump market, drawing on mass production capacity at its Gwangju factory. It said it intends to expand supply by building an end-to-end domestic business — from product development through production and distribution — to serve both government programs and private demand.

A heat pump absorbs thermal energy from outdoor air and uses it for space heating and hot water. Unlike an electric heater that generates heat directly, a heat pump uses refrigerant and a compressor to transfer heat from outside to inside, allowing it to deliver more thermal energy than the electricity it consumes. Because it reduces fossil fuel use and cuts carbon emissions from heating, heat pumps have been gaining ground across Europe.

The government's heating electrification program centers on replacing fossil fuel boilers — those running on LPG, kerosene and similar fuels — with heat pumps to reduce greenhouse gas emissions and air pollutants. The Ministry of Climate, Environment and Energy has effectively designated this year as the inaugural year of heating electrification and launched a series of support initiatives. In March, it classified air-source heat as a form of renewable energy, laying the regulatory groundwork for policy support. This year the government has committed 14.4 billion won ($10.1 million) to subsidize heat pump installations, covering up to 70 percent of installation costs.

Market expectations have risen further after President Lee personally called for faster heat pump rollout. At last month's National Fiscal Strategy Conference, Lee said rationalizing energy use is a national priority that must move quickly, and indicated that raising the program's budget deserved consideration. His direct mention of heat pumps and his call for urgency have given related policy additional momentum.

Kyung Dong Navien opened a heating electrification center at Navien House Jeju on July 28, signaling its full commitment to the air-source heat pump business. [Kyung Dong Navien]

Kyung Dong Navien shut out in second round, too

Kyung Dong Navien, a dominant force in South Korea's boiler market, again failed to make the government's approved supplier list — its second consecutive exclusion. Missing the early rounds of a program the government is fast-tracking is a significant setback, particularly because rival companies can now supply products to actual households and accumulate installation and operating data, potentially giving them a head start in the race for early market share.

In the first round, Kyung Dong Navien fell short on evaluation scores due to issues related to an outdoor unit supplier that manufactured in China. A company official said the short application window for the second round left the company without enough time to complete its preparations.

Kyung Dong Navien says its plan to develop heat pumps as a next-generation growth engine remains unchanged regardless of the government program outcome. The company recently began domestic production at its Pyeongtaek factory, strengthening its manufacturing base. It views the domestic heat pump market as still in its infancy and believes preparing for medium- to long-term market expansion matters more than short-term results in government procurement.

With the industry investing heavily in heat pumps, the central question will be which company first establishes a distinctly Korean heat pump standard. Samsung Electronics, LG Electronics and Carrier draw on compressor, refrigerant and inverter technology accumulated through their air conditioner and HVAC businesses. Daesung Heat Energies is a specialist that has long operated geothermal and air-source renewable energy heating and cooling systems.

Kyung Dong Navien's strengths lie in its deep understanding of Korea's ondol (underfloor heating) and hot-water usage environment, along with a nationwide installation and service network. The contest shaping up in the next-generation boiler market will pit HVAC specialists against established boiler makers, each leveraging their own core strengths.

boo@heraldcorp.com