Ductless Heat Pumps: 2025 Market Diffusion Evaluation #3

In the fall of 2025, the Northwest Energy Efficiency Alliance (NEEA) contracted with OWL Research Partners to conduct the third Market Diffusion Evaluation, formerly known as Long-Term Monitoring and Tracking (LTMT), of its Ductless Heat Pump (DHP) program. Since transitioning from active market development in 2020, NEEA has been monitoring the DHP market for signs of continued diffusion in the program’s target markets (single family zonal, single family electric forced air, and manufactured homes with electric forced air) to confirm whether Market Transformation outcomes are being sustained. In addition to evaluating progress on the DHP Diffusion Indicators, this study also assessed the validity of NEEA’s interpretation of previous LTMT results that suggest sales in target markets are declining.

The study paired data collected from residential HVAC installers between November 2024 and January 2025 with data from local programs, NEEA’s Residential Building Stock Assessment (RBSA), and distributor data. Findings revealed that the residential DHP market that is continuing to grow and gain market share over time, results that indicate continued success in the wake of the transition away from active market development. Yet, despite this progress for the DHP market overall, the specific results for Diffusion Indicators and target markets paint a more nuanced picture. Specific findings include:

• Single-family DHP installs are on the rise, but due to a combination of factors, target market growth has slowed.
• Total installed costs for DHPs continue to increase due to labor costs (but notably not due to equipment costs). 
• The vast majority of HVAC installers in the Northwest (87%) offer DHPs.