Tankless Water Heater Market -Trends, Size & Outlook (2024-2032)

Tankless Water Heater Market Synopsis:

Tankless Water Heater Market Size Was Valued at USD 3.79 Billion in 2023, and is Projected to Reach USD 8.03 Billion by 2032, Growing at a CAGR of 8.70% From 2024-2032.

A tankless water heater is also referred to as an on-demand water heater, is a system of water heating that does require a tank for holding hot water. Such systems will give hot water immediately and directly, for as long as the functionality is required. They are energy efficient because they don’t require keeping hot water and therefore have low standy heat losses; hence more and more people are using the tankless water heaters for their homes or businesses seeking a cost effective and space sparing means of heating water.

The tankless water heater market is also expanding slowly, as people search for appliances that save energy and space around the world. Tankless water heaters on the other hand do not heat and store hot water in a tank, instead they heat water on the fly, that is, when it is needed. This innovation also helps users to reduce their energy costs because it does not require the stand-by heat loss for storing water. The ongoing global changes towards energy efficient and sustainable solutions are the key factors in the growth of the market, along with the greater realization of the longer-term cost saving potential of tankless systems.

North America, particularly the United States, has a large market for tankless water heaters is on the rise as more people and industries discover the high energy costs and new technologies available in the water heating field. In addition, as more consumers are becoming sensitive on sustainable and efficient energy use the use of tankless water heaters is regarded as more favourable. The demand is also complimented by government incentives and rebates designed to encourage individuals to use energy efficient appliances. However, in the Asia Pacific region, the demand of Japan and China is increasing tremendously due to factors like increasing infrastructure growth for human need and requirement of small space for furniture in the new small homes. This demand is also being driven by increase in disposable income and better quality of life in new economy countries.

Tankless Water Heater Market Trend Analysis:

Energy-Efficient & Smart Tankless Water Heaters

• During the preparation of this research, it was possible to discover that the direction toward energy-efficient products and sustainability is influencing the tankless water heater market. Due to increased political pressure in form of enhancing energy standards globally and the arising awareness of the consumer the production of energy-efficient appliances is popular. Bear in mind that because of the lack of a tank and a lack of energy wasted on keeping water hot all the time, tankless water heaters are more energy efficient than a tank model. Furthermore, manufacturers are also adding smart elements to these systems, including Wi-Fi compatibility for features and applications remote control through an app, these features enable users to monitor their water heater and their performance anywhere.
• On that basis, this new technology benefits both in terms of increased convenience as well as energy conservation when it comes to water heating. The global smart tankless water heaters market is expected to grow at a higher rate especially with the advancement of smart home technology.

Expanding Market in Emerging Economies

• The demand for the tankless water heaters as derived from the research shows that this market has the potentialitat for growth in the emerging markets. This practice is more visible today especially with the continued expansion of the urban area, later people are shifting to apartment and small homes in developing countries such as India, China and Brazil, therefore they need compact appliances. Tankless water heaters are compact, energy-efficient water heaters and are suitable for these markets.
• Besides, continual development of market in the countries mentioned above make people have more income to spend and willingness to spend money on energy consuming products. In addition, the trends towards the use of renewable energy sources throughout the world and concern for reducing the CO2 emissions have created a great opportunity for the market’s growth. Industry players can take advantage of the above by providing affordable, friendly to the environment tankless water heaters used suit the regions.

Tankless Water Heater Market Segment Analysis:

Tankless Water Heater Market is Segmented on the basis of Type, Application And By Technology, and Region

By Type, Electric Tankless Water Heaters segment is expected to dominate the market during the forecast period

• Electric Tankless Water Heaters: Tankless electric water heaters are most preferred in residential buildings due to factors such as installation space and dimension. These units use electrical resistance heating elements to heat water every time it is needed. It is because they work only when the water is hot and doesn’t require a massive tank like the conventional water heaters and do consume energy. Since they don’t require venting or gas lines, electric tankless water heaters also serve well in small houses, apartments, or places where gas services are difficult to obtain. Also in recent years the designs are better than before keeping in mind the flow rates as well the times it takes to heat them which also makes them more appealing in the market.
• Gas Tankless Water Heaters: Tankless gas water heaters are preferred by many for their capacity to deliver large amounts of hot water immediately, for meeting the wants of large families, offices or areas, where hot water is highly popular. These units utilize either natural gas or propane in the combustion of water through heat making process. These systems are slightly faster when it comes to recovery time and have a higher flow rate than electric units making them ideal for use where rapid exhaustion of the equipment is required. But they need openings for exhaust gases to be released; thus fixing them is slightly complicated. However, one drawback of the installation is the time it takes for the technology to reach all parts of the building, they are most preferred because they do not run out of hot water and are particularly effective where natural gas is easily accessible.

By Application, Residential segment expected to held the largest share

• Residential: In the residential sector particularly, tankless water heaters are preferred more for their efficiency, compactness and no-tank storage and on demand water heating attributes. Homeowners are embracing these systems because they only heat water when it is needed and not as with the tank-style water heaters that keep reheating hot water stored in the tank. This translates into less amount of money spent on utility bills, and most importantly reduction in the level of pollution. Also, since tankless systems occupy less space they can he quite useful for use in apartments and other small houses, which have limited space for storage. As consumers focus more on eco friendliness and energy efficiency, the demand of tankless water heaters for residential use is expanding.
• Commercial and Industrial: Such systems are also becoming standard installation in many commercial and industrial facilities since they require large quantity of hot water and need a constant supply. These systems are used at commercial places like; restaurants, hotels, offices or any other building whereby , there is constant need for hot water for washing, preparing food, heating among other things. Tankless water heater is mainly used in industrial setting to provide hot water for production or processing purposes as well as in large establishments where temperature control is very essential like glycogen synthesis manufacturing plant or company. These type of water heaters are widely used in these sectors because of high flow rate and facility to produce a large amount of hot water instantaneously. Due to the current energy concern to reduce energy expenses, industries and businesses are continually investing in tankless water heaters.

Tankless Water Heater Market Regional Insights:

North America is Expected to Dominate the Market Over the Forecast period

• The largest geographical market for tankless water heater is North America and primarily includes USA. This particular region is the largest for several reasons such as high energy cost, growing demand for products with energy efficient features and new technologies. They are commonly known as tankless water heaters or on demand water heaters. New regulations for the augmentation of conservation of energy have also provided the market growth, many states even returning money to the homeowners who are using the durable energy-sucking appliances.
• In addition, the latest trend in smart homes now added class of solutions of smart, connected tankless water heaters and advanced the market more in North America. Additionally, the region’s dominance is also expected to continue prevailing as well as the successive increases in innovation of products and consumers’ awareness.

Active Key Players in the Tankless Water Heater Market:

• A. O. Smith Corporation (USA)
• Bosch Thermo technology (Germany)
• Chofu Seisakusho Co., Ltd. (Japan)
• Elco Heating Solutions (Germany)
• Ferguson Enterprises, Inc. (USA)
• General Electric (USA)
• HTP, Inc. (USA)
• InSinkErator (USA)
• Noritz Corporation (Japan)
• Rheem Manufacturing Company (USA)
• Rinnai Corporation (Japan)
• Stiebel Eltron GmbH & Co. KG (Germany)
• Takagi Industrial Co., Ltd. (Japan)
• Truma Gerätetechnik GmbH & Co. KG (Germany)
• Vaillant Group (Germany)
• Other Active Players