Tankless Water Heater Market Size, Growth, Report 2023-2032
The global tankless water heater market size was estimated at around USD 3.53 billion in 2022 and it is projected to hit around USD 8.17 billion by 2032, growing at a CAGR of 8.76% from 2023 to 2032. The tankless water heater market in the United States was accounted for USD 0.7 billion in 2022.
Key Pointers
Report Scope of the Tankless Water Heater Market
| Report Coverage | Details |
| CAGR of North America from 2023 to 2032 | 10.27% |
| Revenue Forecast by 2032 | USD 8.17 billion |
| Growth Rate from 2023 to 2032 | CAGR of 8.76% |
| Base Year | 2022 |
| Forecast Period | 2023 to 2032 |
| Market Analysis (Terms Used) | Value (US$ Million/Billion) or (Volume/Units) |
| Companies Covered | A. O. Smith; Rheem Manufacturing Company; Rinnai Corporation; Bradford White Corporation; Robert Bosch LLC; EcoSmart Green Energy Products, Inc.; StiebelEltron Inc.; Takagi; Noritz America; Navien Inc |
Increasing consumer concerns over the sustainable use of energy is the main factor fueling demand for tankless water heaters. For instance, according to Energy.gov, the tankless water heater can be 24.0% to 34.0% more energy efficient as compared to the traditional product. A rapid increase in the adoption of these heaters among residential and commercial sectors as they are capable of saving space and energy is expected to boost the tankless water heater market growth during the forecast period.
Moreover, various tankless water heaters are equipped with energy star ratings, which make them eco-friendly and economical for buyers. Furthermore, these products generally cost more than conventional 40-gallon water heaters but usually have longer warranties, and they last longer as compared to traditional hot water heaters. In addition, a tankless water heater can save USD 100 - USD 200 on electric bills per year. An increasing replacement of the existing water heaters with tankless water heaters is expected to offer immense opportunities for the market during the forecast period.
COVID-19 had a negative impact on the global tankless water heater market. Due to the pandemic decline has been observed in the company revenue during 2020 in construction & building, transportation, oil & gas, automotive, and energy sectors owing to the globally imposed lockdown. This has declined the need for tankless water heaters in the commercial and residential sectors, which has hampered the growth of the market. Additionally, building and construction activities across the globe were on hold during the pandemic period due to the strict measure of social distancing, lack of labor, and raw material supply disruption.
Tankless water heaters are also known as demand-type or instantaneous water heaters, which provide hot water only as it is needed. They don't produce the standby energy losses associated with storage water heaters, which can save money. Typically, tankless water heaters provide hot water at a rate of 2-5 gallons (7.6-15.2 liters) per minute.
Companies are introducing technologically advanced tankless water heaters, which are expected to increase the adoption of these heaters in the upcoming years. For instance, in April 2019, Intellihot Inc., which is a clean technology IoT company and one of the leading manufacturers of commercial tankless water heaters, launched the Neuron Series of water heaters.
Commercial tankless water heaters are equipped with cellular Wi-Fi connectivity for remote monitoring of flow and water temperature. Moreover, these models are designed for schools, restaurants, & hotels and can fit in existing water connections, thereby eliminating re-piping and cutting installation time by half. Additionally, the majority of the companies, manufacturing these types of heaters, have special features available in some of their models. For instance, Stiebel Eltron has a patent on their Advanced Flow Control technology, which automatically decreases the flow rate when demand is high.
Product Insights
The electric tankless heaters segment dominated the market in 2022 and is expected to expand at the fastest CAGR of 8.93% during the forecast period. These types of heaters are easy to set up and require less installation cost. In addition, electric products usually last long and have low operating costs. Moreover, the innovative design of these heaters makes them feasible to install in small spaces and does not require any ventilation as compared to their gas counterparts.
Furthermore, electric products require less or no maintenance, whereas gas products require periodic maintenance by trained professionals. Such factors are anticipated to promote the utility of electric products as compared to their gas counterparts. Therefore, it is expected that the segment will grow at the fastest CAGR during the forecast period.
The gas tankless heaters segment is likely to develop with a CAGR of 8.44% during the forecast period. Gas tankless water heaters generally do not require the same upgrades to a home's basic services as electric tankless water heaters. In addition, gas tankless water heaters tend to have higher flow rates than electric ones. In a gas storage water heater, the pilot light heats the water in the tank so the energy isn't wasted. Thus, it is preferred over electric heaters and is likely to rise at a steady CAGR during the forecast period.
Application Insights
The residential segment dominated the market in 2022 and is expected to develop at the fastest CAGR of 8.85% during the forecast period. The growing adoption of energy-efficient and eco-friendly products including tankless water heaters is the main factor driving the demand for these products in the residential sector. Additionally, the increasing number of residential units, as a result of the growing middle-class population, especially in emerging economies such as India and China is expected to promote the adoption of these solutions during the forecast period.
In addition, the introduction of innovative products is expected to open new avenues. For instance, Rheem's Prestige models have EcoNet Smart Technology that provides Wi-Fi connectivity and add-on features, which offer system protection, control, and monetary savings.
The commercial segment is expected to expand with a CAGR of 8.56% during the forecast period. Increasing visibility of innovative products is expected to be a key factor driving demand for tankless water heaters during the forecast period. For instance, Intellihot’s tankless water heater provides continuous hot water when needed, thereby eliminating energy wastage and environmental impact as well as cutting down greenhouse gas emissions by more than 40.0%. Moreover, the tankless system comes with two years of 24/7 remote monitoring with serviceable parts shipped onsite proactively, thereby fueling the adoption of these systems in the commercial sector.
Regional Insights
North America is anticipated to expand at the fastest CAGR of 10.27% during the forecast period. Growing awareness related to ecological products, coupled with increasing product visibility, is a key factor driving demand for tankless water heaters during the forecast period. Moreover, the presence of prominent players in the region is expected to propel the demand for tankless water heaters in the upcoming years. Thus, the region is likely to develop at the fastest CAGR during the forecast period.
Europe accounted for the highest market share of around in 2022. This is due to the higher product adoption and shifting consumer preference for energy-efficient and economical products. Moreover, surging demand from the commercial sector including restaurants, hotels, and hospitals is expected to have a positive impact on market growth. In addition, the increasing adoption of tankless water heaters in countries such as Switzerland, Germany, and the U.K., is propelling demand in the region.
Tankless Water Heater Market Segmentations:
By Product
By Application
By Regional
Chapter 1. Introduction
1.1. Research Objective
1.2. Scope of the Study
1.3. Definition
Chapter 2. Research Methodology
2.1. Research Approach
2.2. Data Sources
2.3. Assumptions & Limitations
Chapter 3. Executive Summary
3.1. Market Snapshot
Chapter 4. Market Variables and Scope
4.1. Introduction
4.2. Market Classification and Scope
4.3. Industry Value Chain Analysis
4.3.1. Raw Material Procurement Analysis
4.3.2. Sales and Distribution Channel Analysis
4.3.3. Downstream Buyer Analysis
Chapter 5. COVID 19 Impact on Tankless Water Heater Market
5.1. COVID-19 Landscape: Tankless Water Heater Industry Impact
5.2. COVID 19 - Impact Assessment for the Industry
5.3. COVID 19 Impact: Global Major Government Policy
5.4. Market Trends and Opportunities in the COVID-19 Landscape
Chapter 6. Market Dynamics Analysis and Trends
6.1. Market Dynamics
6.1.1. Market Drivers
6.1.2. Market Restraints
6.1.3. Market Opportunities
6.2. Porter’s Five Forces Analysis
6.2.1. Bargaining power of suppliers
6.2.2. Bargaining power of buyers
6.2.3. Threat of substitute
6.2.4. Threat of new entrants
6.2.5. Degree of competition
Chapter 7. Competitive Landscape
7.1.1. Company Market Share/Positioning Analysis
7.1.2. Key Strategies Adopted by Players
7.1.3. Vendor Landscape
7.1.3.1. List of Suppliers
7.1.3.2. List of Buyers
Chapter 8. Global Tankless Water Heater Market, By Product
8.1. Tankless Water Heater Market, by Product, 2023-2032
8.1.1. Electric Tankless Water Heater
8.1.1.1. Market Revenue and Forecast (2020-2032)
8.1.2. Gas Tankless Water Heater
8.1.2.1. Market Revenue and Forecast (2020-2032)
Chapter 9. Global Tankless Water Heater Market, By Application
9.1. Tankless Water Heater Market, by Application, 2023-2032
9.1.1. Residential
9.1.1.1. Market Revenue and Forecast (2020-2032)
9.1.2. Commercial
9.1.2.1. Market Revenue and Forecast (2020-2032)
Chapter 10. Global Tankless Water Heater Market, Regional Estimates and Trend Forecast
10.1. North America
10.1.1. Market Revenue and Forecast, by Product (2020-2032)
10.1.2. Market Revenue and Forecast, by Application (2020-2032)
10.1.3. U.S.
10.1.3.1. Market Revenue and Forecast, by Product (2020-2032)
10.1.3.2. Market Revenue and Forecast, by Application (2020-2032)
10.1.4. Rest of North America
10.1.4.1. Market Revenue and Forecast, by Product (2020-2032)
10.1.4.2. Market Revenue and Forecast, by Application (2020-2032)
10.2. Europe
10.2.1. Market Revenue and Forecast, by Product (2020-2032)
10.2.2. Market Revenue and Forecast, by Application (2020-2032)
10.2.3. UK
10.2.3.1. Market Revenue and Forecast, by Product (2020-2032)
10.2.3.2. Market Revenue and Forecast, by Application (2020-2032)
10.2.4. Germany
10.2.4.1. Market Revenue and Forecast, by Product (2020-2032)
10.2.4.2. Market Revenue and Forecast, by Application (2020-2032)
10.2.5. France
10.2.5.1. Market Revenue and Forecast, by Product (2020-2032)
10.2.5.2. Market Revenue and Forecast, by Application (2020-2032)
10.2.6. Rest of Europe
10.2.6.1. Market Revenue and Forecast, by Product (2020-2032)
10.2.6.2. Market Revenue and Forecast, by Application (2020-2032)
10.3. APAC
10.3.1. Market Revenue and Forecast, by Product (2020-2032)
10.3.2. Market Revenue and Forecast, by Application (2020-2032)
10.3.3. India
10.3.3.1. Market Revenue and Forecast, by Product (2020-2032)
10.3.3.2. Market Revenue and Forecast, by Application (2020-2032)
10.3.4. China
10.3.4.1. Market Revenue and Forecast, by Product (2020-2032)
10.3.4.2. Market Revenue and Forecast, by Application (2020-2032)
10.3.5. Japan
10.3.5.1. Market Revenue and Forecast, by Product (2020-2032)
10.3.5.2. Market Revenue and Forecast, by Application (2020-2032)
10.3.6. Rest of APAC
10.3.6.1. Market Revenue and Forecast, by Product (2020-2032)
10.3.6.2. Market Revenue and Forecast, by Application (2020-2032)
10.4. MEA
10.4.1. Market Revenue and Forecast, by Product (2020-2032)
10.4.2. Market Revenue and Forecast, by Application (2020-2032)
10.4.3. GCC
10.4.3.1. Market Revenue and Forecast, by Product (2020-2032)
10.4.3.2. Market Revenue and Forecast, by Application (2020-2032)
10.4.4. North Africa
10.4.4.1. Market Revenue and Forecast, by Product (2020-2032)
10.4.4.2. Market Revenue and Forecast, by Application (2020-2032)
10.4.5. South Africa
10.4.5.1. Market Revenue and Forecast, by Product (2020-2032)
10.4.5.2. Market Revenue and Forecast, by Application (2020-2032)
10.4.6. Rest of MEA
10.4.6.1. Market Revenue and Forecast, by Product (2020-2032)
10.4.6.2. Market Revenue and Forecast, by Application (2020-2032)
10.5. Latin America
10.5.1. Market Revenue and Forecast, by Product (2020-2032)
10.5.2. Market Revenue and Forecast, by Application (2020-2032)
10.5.3. Brazil
10.5.3.1. Market Revenue and Forecast, by Product (2020-2032)
10.5.3.2. Market Revenue and Forecast, by Application (2020-2032)
10.5.4. Rest of LATAM
10.5.4.1. Market Revenue and Forecast, by Product (2020-2032)
10.5.4.2. Market Revenue and Forecast, by Application (2020-2032)
Chapter 11. Company Profiles
11.1. A. O. Smith
11.1.1. Company Overview
11.1.2. Product Offerings
11.1.3. Financial Performance
11.1.4. Recent Initiatives
11.2. Rheem Manufacturing Company
11.2.1. Company Overview
11.2.2. Product Offerings
11.2.3. Financial Performance
11.2.4. Recent Initiatives
11.3. Rinnai Corporation
11.3.1. Company Overview
11.3.2. Product Offerings
11.3.3. Financial Performance
11.3.4. Recent Initiatives
11.4. Bradford White Corporation
11.4.1. Company Overview
11.4.2. Product Offerings
11.4.3. Financial Performance
11.4.4. LTE Scientific
11.5. Robert Bosch LLC
11.5.1. Company Overview
11.5.2. Product Offerings
11.5.3. Financial Performance
11.5.4. Recent Initiatives
11.6. EcoSmart Green Energy Products, Inc.
11.6.1. Company Overview
11.6.2. Product Offerings
11.6.3. Financial Performance
11.6.4. Recent Initiatives
11.7. StiebelEltron Inc.
11.7.1. Company Overview
11.7.2. Product Offerings
11.7.3. Financial Performance
11.7.4. Recent Initiatives
11.8. Takagi
11.8.1. Company Overview
11.8.2. Product Offerings
11.8.3. Financial Performance
11.8.4. Recent Initiatives
11.9. Noritz America
11.9.1. Company Overview
11.9.2. Product Offerings
11.9.3. Financial Performance
11.9.4. Recent Initiatives
11.10. Navien Inc
11.10.1. Company Overview
11.10.2. Product Offerings
11.10.3. Financial Performance
11.10.4. Recent Initiatives
Chapter 12. Research Methodology
12.1. Primary Research
12.2. Secondary Research
12.3. Assumptions
Chapter 13. Appendix
13.1. About Us
13.2. Glossary of Terms
Cross-segment Market Size and Analysis for
Mentioned Segments
Additional Company Profiles (Upto 5 With No Cost)
Additional Countries (Apart From Mentioned Countries)
Country/Region-specific Report
Go To Market Strategy
Region Specific Market DynamicsRegion Level Market Share Import Export AnalysisProduction AnalysisOthers