In an effort to transform the residential space heating market in the Northwest, the Northwest Energy Efficiency Alliance (NEEA) has focused on promoting inverter-driven ductless heat pumps (DHPs) as a promising technology for displacing electric resistance heat. The market for this technology is evolving rapidly. The key objectives of this study are to identify relevant market segments in the Northwest, and quantify the maximum technical potential for displacing electric resistance heating in each segment. This study also identifies current market barriers and likely market adoption issues for standard DHPs as well as other related specialized equipment in the Northwest. It forecasts the likely total displacement of electric resistance heating by standard and specialized DHPs over the next 20 years under different market adoption scenarios.