Development of Standard and Labeling Program for Heat Pump Based Water Heaters

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In India, CLASP provides the Bureau of Energy Efficiency (BEE) with technical assistance and capacity building support on appliance energy efficiency as required by BEE and in line with their priorities. CLASP’s technical assistance has enabled BEE to expand appliance energy efficiency policy framework to cover a wide range of residential, commercial, and industrial energy intensive products. This has resulted in reduced energy use, lowered peak electricity demand, reduced consumer energy costs, expanded access to high quality appliances, and resulted in avoided greenhouse gas emissions.

BEE introduced the Standards and Labelling (S&L) programme in 2006 to improve the energy efficiency of residential, commercial, and industrial appliances/equipment in the country under the Energy conservation Act, 2001.

The primary intent of the S&L program of BEE is to minimize the energy consumption of appliances while ensuring the equipment performance. The scheme aims to provide information on the energy consumption characteristics of appliances based on the star rating. The star rating ranges from 1 to 5 in the increasing order of energy efficiency. As on date, 41 appliances / equipment are covered under the S&L program, out of which 18 appliances are under the mandatory regime while the remaining are under the voluntary regime (please refer to www.beestarlabel.com).

A heat pump-based water heater (HPWH) currently represents one of the most energy-efficient and promising type of decarbonisation technology to fulfil the water heating needs for sanitary purpose in India. Unlike conventional fossil fuel boilers that generate heat through combustion, heat pumps use input energy to transfer heat from a low temperature source (air, ground, and water) to a high temperature sink. Heat pumps can provide upto 3-4 times more heat per unit of electricity and thus, deliver energy-savings of 60─80%. Additionally, due to their high energy efficiency, they demonstrate the potential to rapidly replace traditional boilers and heaters. Air to water heat pumps can be mostly installed and used across residential and commercial applications.

Heat pump-based water heater (also referred to as air to water heat pumps) market in India generated a revenue of 21.8 million USD in 2025 which is expected to grow by more than two-fold (CAGR of 13%) by 2033. While various heat pump technologies (air source, water source, geothermal, and thermodynamic) exist in India, air to water heat pumps generated the largest revenue in 2025. It is also seen that although 90% of the heat pumps in India are imported from China but 50-55% of importers are Indian companies.

In 2025, CLASP conducted an initial market assessment study to understand the potential of heat pump applications (covering each type of technology) across the residential, commercial, and industrial sectors in India used for both space-heating and water-heating needs. Analysis revealed that air to water heat pumps used in the residential and commercial sectors will dominate the market through 2030. The residential sector is projected to represent approximately 85% of the overall market potential (In terms of heat pump capacity), reflecting the significant demand growth in building applications.

Now, as a part of the second phase of this market assessment study, CLASP plans to bring out a detailed assessment of the future market potential of specifically, air to water heat pumps used for sanitary applications (i.e., for the residential and commercial sectors) in India.

Indian standards are in the process of getting developed for HPWH and will be out in the next six months. The draft standard is developed by BIS and issued in wide circulation for public comments. For this purpose, CLASP is seeking a consultant to carry out this detailed market study and eventually provide recommendations to BEE to develop a star-labelling program for the same in India.

Contract Timeframe: May 2026 – January 2027

Deadline for Application: 26 April 2026 at 23:59 ET

Application includes registering as a Consulting Partner and submitting the technical and financial proposals per the instructions below.

Deadline for Questions: 10 April 2026 at 23:59 ET

All questions must be addressed in English to Yatharth Kumar Sharma at ysharma@clasp.ngo. We request all inquiries be made to this e-mail address and not by phone.

The Consultant will be responsible for successfully executing the following activities and tasks as part of the study. Execution of all activities and tasks must be conducted in close consultation with BEE and CLASP.

Task 1: Comprehensive Market Assessment

1.1 Assess the size of the India’s market for heat pump-based water heaters used for sanitary purpose (sales number, types, capacity/rating, type of manufacturers such as organized and unorganized SME sectors and their market share, efficiency of the existing model) including units manufactured and sold, import vs domestic manufacturing, market segment of major manufacturers, component level supply chain for domestic manufacturing. Also, capture global landscape for HPWH.

1.2 Develop questionnaire in consultation with CLASP, for collection of data to analyse the current market scenario, energy performance status etc.

1.3 Identify the challenges and barriers affecting market penetration. This may include barriers related to manufacturing, technology, consumer issues (service, price, quality, etc.), and policy implementation.

1.4 Review and compare national and international test standards such as ISO/IEC as well as labelling program used by countries and regions such as China, Korea, Japan, EU, US, Australia etc. Analysis must include the comparison of testing conditions, testing methods and calculation methods for efficiencies.

1.5 Identify and provide assessment of existing test facilities in India including the national accreditation status and provide recommendations to address the gaps.

1.6 Cost benefit analysis to consumers for purchasing heat pump based water heater.

1.7 Estimate the future market growth in next 10 years. The forecast should be accompanied by an analysis of key drivers of market penetration.

Task 2: Development of Energy Efficiency Metric and Labelling Scheme

2.1 Design and develop an energy efficiency metric for HPWH. The scheme should be developed in a template of schedule and address all the parameters in the respective clauses of the schedule template.

Task 3: National Impact Assessment and Technical Committee Meetings

3.1 Based on the final recommendations of labelling thresholds, quantify annual electricity consumptions, projected energy savings and associated cost savings, avoided generation capacity, GHG emission reductions and economic benefits. The impact assessment should be done based on logical assumptions of market transformation for short term (2040) and long term (by 2050).

3.2 Assess the implications of S&L policies on manufacturers, consumers ownerships, and requirements of subsidies/ incentives to promote the policy adoption, if needed.

3.3 Assist CLASP and BEE in planning and deliberating at the technical committee meetings for developing EE policy of HPWH. Prepare necessary documents (e.g., presentation, meeting agenda and minutes, labelling schedule, and gazette notification) as required.

3.4 Support in planning and developing the agenda for 2 – 3 stakeholder discussions or workshops.