The North America Residential Water Heater Market report segments the industry into By Product Type (Storage Water Heaters, Non-Storage Water Heaters, Hybrid Water Heaters), By Energy Source (Electric, Gas, Solar, Others), By Capacity (Small Water Heater, Medium Water Heater, Large Water Heater), By Distribution Channel (Multi-Branded Stores, Exclusive Stores, and more), and By Geography (United States, Canada, and more).

This residential water heater market in the United States is dominated by three major players in AO Smith, Rheem, and Bradford White. In 2021, AO Smith and Rheem together accounted for more than 70 percent of residential water heater shipments in the United States.

The U.S. water heater market was valued at USD 3.45 billion in 2023 and is expected to reach USD 5.08 billion by 2029, growing at a CAGR of 6.67%.

The Water Heater Manufacturing industry is relatively small in terms of participation. Most of these companies have at least some manufacturing capacity outside the United States. The industry is heavily affected by these few companies' off- and on-shoring decisions. Low interest rates early in the period boosted home improvement investments and surged housing starts, greatly benefiting the industry. Water Heater Manufacturing industry revenue has been expanding at a CAGR of 1.6% over the past five years and is expected to total $3.1 billion in 2024 when revenue will jump by an estimated 0.2%. The majority of water heaters are purchased for residential customers. Rising per capita disposable income enables homeowners to better afford home improvements. Hot water is considered necessary and heaters require replacement once every 10 years; water heaters are a largely non-discretionary expense. Industry profit has also increased over the past five years with greater demand from residential and commercial markets. The industry will continue growing over the next five years. A steady increase in residential construction activity and strong recovery in nonresidential construction will boost demand for new water heaters. Still, the small footprint of the industry and the large average size of its facilities give it the potential for large unexpected swings related to factory openings or relocations. This will be particularly true as the United States moves toward greater trade protectionism and manufacturers strive to locate their operations around tariff barriers. Water Heater Manufacturing industry revenue is expected to expand at a CAGR of 1.3% to $3.3 billion over the five years to 2029.

The commercial water heater market in the United States has been quite stable over the years in terms of market share. AO Smith has taken up around 50 percent of the market, with Rheem and Bradford White as the second and third leading companies. Rheem accounted for a quarter of the market share in 2020, while Bradford White was responsible for 16 percent of commercial water heater shipments in the same year.

The North America Tankless Smart Water Heater Market size was USD 20.4 Mn in 2022 and is expected to reach USD 144.1 Mn in 2031, expanding at a CAGR of 24.2 % during 2023-2031. The market growth is attributed to the increasing preference for smart and advanced water heaters as these offer various services and applications.



A smart water heater uses water temperature measurements and pairs them with consumption data and preset options. A tankless smart water heater is a heating appliance that heats water using electricity or gas as an energy source. It is different from a traditional water heater, as it does not store and heat water while it flows through the heating unit for a short period of time. These heaters are also known as instantaneous water heaters or demand-type heaters and provide hot water only as it is needed.

A tankless water heater boils water instantly without using a hot water storage tank and aids in cost-cutting due to the lack of standby energy losses associated with hot water tanks. When the hot water faucet is turned on, the cold water starts flowing through a heat exchanger in the unit, where either an electric element or a natural gas burner heats the water which provides instant water heaters that supply hot water. Eliminating the waiting period for the tank to be filled with enough hot water. However, the capacity of the water heater limits the flow rate.

North America Tankless Smart Water Heater Market Dynamics

What drives North America Tankless Smart Water Heater Market

• Replacement of Traditional Water Heaters

Increasing the replacement of conventional water heaters with tankless smart water heaters can drive the tankless smart water heater market. Tankless smart water heaters are more energy efficient than conventional water heaters which are becoming more common in emerging markets. A tankless smart water heater provides continuous hot water when needed that aids in eliminating energy wastage and environmental impact and cutting down greenhouse emissions by over 40%.

The global water heater market is estimated to be valued at US$ 36.1 billion in 2024 and is forecasted to reach US$ 92 billion by the end of 2034, expanding at a CAGR of 9.8% between 2024 and 2034.

Report Attributes	Details
Water Heater Market Size (2024E)	US$ 36.1 Billion
Forecasted Market Value (2034F)	US$ 92 Billion
Global Market Growth Rate (2024 to 2034)	9.8% CAGR
North America Market Growth Rate (2024 to 2034)	10% CAGR
East Asia Market Value (2024E)	US$ 8 Billion
Solar Water Heater Sales (2034F)	US$ 9.8 Billion
Key Companies Profiled	A.O. Smith Bosch Haier American Water Heaters Ariston GE Appliances Whirlpool Corporation Rinnai Corporation

Country-wise Insights

Attribute	United States
Market Value (2024E)	US$ 7.2 Billion
Growth Rate (2024 to 2034)	10% CAGR
Projected Value (2034F)	US$ 18.8 Billion

Attribute	China
Market Value (2024E)	US$ 3.6 Billion
Growth Rate (2024 to 2034)	10.3% CAGR
Projected Value (2034F)	US$ 9.5 Billion

Category-wise Insights

Attribute	Electric Water Heaters
Market Value (2024E)	US$ 25 Billion
Growth Rate (2024 to 2034)	9.9% CAGR
Projected Value (2034F)	US$ 64.5 Billion

Attribute	Storage Water Heaters
Market Value (2024E)	US$ 17.8 Billion
Growth Rate (2024 to 2034)	10% CAGR
Projected Value (2034F)	US$ 46.3 Billion

Snapshot img

Water Heater Market Size 2024-2028

The water heater market size is forecast to increase by USD 8.05 billion at a CAGR of 5.97% between 2023 and 2028. The market is experiencing significant growth, driven by several key trends and factors. One major trend is the increasing preference for tankless water heaters, which offer energy efficiency and continuous hot water supply. Another trend is the integration of water heaters into smart and connected kitchens, enabling remote control and monitoring capabilities. However, high installation and maintenance costs remain challenges for the market, particularly for larger commercial applications. Additionally, stringent regulations regarding energy efficiency and safety standards continue to shape the market landscape. Overall, the market is expected to grow steadily, driven by these trends and factors, as well as increasing demand for reliable and efficient hot water solutions.

What will be the Size of the Market During the Forecast Period?

To learn more about this report, View Report Sample

Market Dynamics and Customer Landscape

The market encompasses a range of innovative products and high-performance products, including electric product and solar water heating systems, tankless and storage water heater, and smart technology applications. These solutions are increasingly being adopted in residential establishments and smart city projects to reduce environmental impact and improve energy efficiency. Electric water and tankless water heaters are popular choices for their high energy savings and carbon footprint reduction. Solar products, such as solar water heating systems, further enhance the environmental benefits of these systems. In the context of residential applications, water heating systems play a crucial role in daily life, from cleaning and washing to cooking and patient hygiene. Hospitals also rely on water heating systems for essential services.

Further, green projects and smart city initiatives are driving the demand for water heating solutions that minimize carbon emissions and offer high-performance and innovative features. Aging water heaters, on the other hand, are being replaced with more energy-efficient and eco-friendly alternatives. Storage tanks and cleaning systems are essential components of water heating systems, ensuring consistent water temperature and maintaining system hygiene. Overall, the market is poised for growth as the world transitions towards more sustainable and energy-efficient solutions. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The increasing demand for tankless water heaters is a key factor driving the growth of the market. In the market, there is a growing trend towards energy-efficient models, particularly in residential establishments and smart city projects. With aging water heaters leading to increased maintenance and utility costs, the shift toward electric water heaters is gaining momentum. These advanced heating solutions offer high energy savings, making them an attractive option for both residential and commercial consumers. The Department of Defense and military facilities, hotels, shopping complexes, and commercial buildings are all exploring environmentally friendly products to reduce their carbon footprint.

However, tankless water heaters, which use heavy burners to quickly heat water through a heat exchanger, have been found to be 22% more energy-efficient than gas-powered storage water heaters. As consumer spending on heating technologies continues to rise, companies are differentiating their products by launching energy-efficient electric water heaters, providing instant hot water with lower utility costs and reduced environmental impact. Thus, the demand for energy-efficient models is expected to boost the growth of the market during the forecast period.

Significant Market Trend

Smart and connected kitchens are the primary trends in the market growth. The market is witnessing a significant trend towards the adoption of smart water heating solutions. In residential establishments and smart city projects, advanced water heaters equipped with monitoring systems are gaining popularity. These systems enable end-users to maintain their water heaters effectively, removing allergens, harmful particles, and contaminants that can cause wear and tear. The integration of smart technologies, such as smart thermostats and sensors, into electric water heaters and storage water heaters results in high energy savings and a reduced carbon footprint.

Further, institutions like the Department of Defense and military facilities, as well as commercial buildings, hotels, shopping complexes, and other large establishments, are increasingly investing in environ

Snapshot img

Heat Pump Water Heater Market Size 2024-2028

The heat pump water heater market size is forecast to increase by USD 11.58 billion at a CAGR of 29.08% between 2023 and 2028.

The Heat Pump Water Heater (HPWH) market presents a significant growth opportunity for energy-conscious consumers and businesses seeking to reduce their carbon footprint and lower utility costs. HPWHs utilize renewable energy from the ambient air to heat water, making them an eco-friendly alternative to traditional electric or gas water heaters. Key drivers propelling market expansion include increasing energy efficiency regulations, growing awareness of energy conservation, and the declining cost of renewable energy technologies. However, the market is not without challenges. One of the primary obstacles is the lack of awareness and understanding of HPWH technology among potential customers. Additionally, the upfront cost of HPWHs can be higher than conventional water heaters, which may deter some buyers. To capitalize on market opportunities and navigate these challenges effectively, companies can focus on education and marketing efforts to raise awareness of HPWH benefits, as well as explore financing options or incentives to help offset the initial investment. By addressing these issues, HPWH manufacturers and distributors can tap into the growing demand for energy-efficient and cost-effective water heating solutions.

What will be the Size of the Heat Pump Water Heater Market during the forecast period?

Request Free SampleThe market is experiencing significant growth due to the increasing focus on energy efficiency in both the residential and commercial sectors. Air-source heat pumps, a type of heat pump water heater, are gaining popularity for their ability to provide energy-efficient solutions for residential energy consumption and commercial water heating. Geothermal heat pumps are also making strides in the market, offering renewable energy alternatives to traditional fossil fuel-based systems. Energy savings and environmental impact are key drivers for the adoption of heat pump water heaters. The global heating industry is embracing enhanced compressor technologies and heat exchanger designs to improve efficiency and reduce greenhouse gas emissions. Control systems are also becoming increasingly important, with smart technologies enabling better management of heating and cooling systems. Installation costs and climatic conditions are important factors influencing the market dynamics. Regulations, both environmental and energy efficiency, are also playing a significant role in the growth of the market. In the residential sector, energy efficiency standards are driving the demand for energy-efficient solutions, while in the commercial sector, environmental regulations are pushing companies to adopt greener alternatives to fossil fuel-based heating systems. The market is evolving, with a focus on innovation and sustainability. The integration of renewable energy sources and advanced control systems is expected to further boost the market's growth. Overall, the market is poised for continued expansion, offering opportunities for businesses in the HVAC equipment industry.

How is this Heat Pump Water Heater Industry segmented?

The heat pump water heater industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2024-2028, as well as historical data from 2018-2022 for the following segments. ApplicationResidentialCommercialTypeAir source heat pumpGeothermal heat pumpGeographyNorth AmericaUSEuropeFranceGermanyUKMiddle East and AfricaAPACChinaSouth AmericaRest of World (ROW)

By Application Insights

The residential segment is estimated to witness significant growth during the forecast period.The residential segment dominates the market for heat pump water heaters, with its large-scale adoption in residential buildings driven by the benefits of high energy efficiency and renewable energy alternatives to traditional heating systems. The construction industry's recovery from the financial crisis has further fueled demand for these energy-efficient solutions. Heat pump water heaters are increasingly being integrated into residential buildings, particularly in regions with harsh climatic conditions, to meet residential energy consumption needs for both water heating and space heating applications. Energy savings is a significant factor driving the market, as heat pump water heaters offer up to 60% energy savings compared to conventional electric water heaters. Renewable energy sources, such as solar and wind, are increasingly being used in conjunction with heat pump water heaters to further reduce carbon emissions and environmental impact. Installation costs, although initially higher than traditional water heaters, are offset by long-term energy savings. Advanced control system

The global tankless water heater market is calculated at US$ 4.9 billion for 2024, as per a new industry analysis published by Fact.MR. Worldwide sales of tankless water heaters are forecasted to rise at a CAGR of 4.9% and reach US$ 9.5 billion by the end of 2034.

Report Attributes	Details
Tankless Water Heater Market Size (2024E)	US$ 4.9 Billion
Forecasted Market Value (2034F)	US$ 9.5 Billion
Global Market Growth Rate (2024 to 2034)	4.9% CAGR
North America Market Value (2034F)	US$ 1.5 Billion
East Asia Market Value (2024E)	US$ 1.1 Billion
Sales of Electric Tankless Water Heaters (2034F)	US$ 7.3 Billion
Key Companies Profiled	A. O. Smith Rinnai Corporation Haier Smart Home Co Ltd. Rheem Manufacturing Company Bajaj Electricals Ltd. EcoSmart Green Energy Products, Inc. Atmor Noritz America Takagi StiebelEltron Inc. Navien Inc. Bradford White Corporation

Country-wise Insights

Attribute	China
Market Value (2024E)	US$ 500 Million
Growth Rate (2024 to 2034)	7.2% CAGR
Projected Value (2034F)	US$ 1.1 Billion

Attribute	United States
Market Value (2024E)	US$ 400 Million
Growth Rate (2024 to 2034)	7.1% CAGR
Projected Value (2034F)	US$ 900 Million

Category-wise Insights

Attribute	Electric Tankless Water Heaters
Market Value (2024E)	US$ 3.7 Billion
Growth Rate (2024 to 2034)	6.9% CAGR
Projected Value (2034F)	US$ 7.3 Billion

Attribute	Condensing Tankless Water Heaters
Market Value (2024E)	US$ 3.9 Billion
Growth Rate (2024 to 2034)	6.9% CAGR
Projected Value (2034F)	US$ 7.6 Billion

Snapshot img

Commercial Water Heaters Market Size 2024-2028

The commercial water heaters market size is forecast to increase by USD 2.62 billion at a CAGR of 4.36% between 2023 and 2028.

The commercial water heater market is experiencing significant growth, driven by increasing demand from the hospitality sector, particularly in regions with a high tourist population. Additionally, there is a rising trend towards energy efficiency in commercial buildings, leading to increased initiatives for the installation of energy-efficient water heating systems.
However, the high installation and maintenance costs associated with commercial water heaters can be a challenge for market growth. To mitigate this, manufacturers are focusing on developing cost-effective and energy-efficient solutions, such as tankless water heaters and heat pump water heaters. Furthermore, government regulations and incentives are also driving the adoption of energy-efficient water heating systems in commercial buildings. Overall, the commercial water heater market is expected to continue growing, driven by these trends and the increasing demand for hot water in various industries.

What will be the Commercial Water Heaters Market Size During the Forecast Period?

Request Free Sample

The market is driven by the increasing demand for hot water in various industries, including healthcare, hotels, restaurants, and manufacturing facilities. The market is segmented based on energy sources, with oil, electricity, solar, and renewable sources being the major categories. Corporate places are increasingly adopting energy-efficient and sustainable solutions to reduce their carbon footprint and mitigate the impact of energy crises. Renewable water sources, such as solar and heat pumps, are gaining popularity due to their ability to reduce CO2 emissions.
Additionally, technologically advanced solutions, such as heat recovery systems and smart water heaters, are also gaining traction due to their energy efficiency and cost savings. Incentives from governments and regulatory bodies are further boosting the market growth. The market is expected to grow at a significant rate, with Massachusetts being a key market due to its stringent energy efficiency regulations. The market is expected to remain competitive, with key players focusing on product innovation and energy efficiency to gain a competitive edge.

How is this market segmented and which is the largest segment?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

Type

  Electric water heater
  Gas water heater
  Solar water heater


Distribution Channel

  Offline
  Online


Geography

  APAC

    China
    India
    Japan


  Europe

    Germany


  North America

    US


  South America



  Middle East and Africa

By Type Insights

The electric water heater segment is estimated to witness significant growth during the forecast period.

Commercial water heating systems play a crucial role in various industries, including healthcare, hotels, restaurants, and corporate places. The energy source for these systems has been traditionally derived from oil and electricity. However, there is a growing trend towards the adoption of renewable sources such as solar, heat pumps, and biofuels to reduce reliance on fossil fuels and mitigate the energy crisis. Rinnai Corporation, among others, offers dual fuel heaters that use both electricity and gas, providing flexibility in fuel type and enhancing energy efficiency. Moreover, energy-efficient heaters, such as condensing and heat pump heaters, have gained popularity due to their high heat recovery factor and low CO2 emission.

Additionally, institutes, offices, salons, SPAs, cafes, schools, and colleges are increasingly investing in energy-efficient water heating solutions to improve building energy performance and reduce energy consumption. The Massachusetts legislature, for instance, mandates that all new commercial buildings must meet certain energy efficiency standards. Heat pumps, a type of renewable energy technology, are gaining traction as an alternative to traditional water heating systems. These systems use electricity to transfer heat from the ambient air or water to the water in the tank, making them an eco-friendly and cost-effective option for commercial establishments. The energy performance of these systems is influenced by factors such as insulation, power capacity, and storage capacity.

In conclusion, the commercial water heater market is witnessing significant growth due to the increasing demand for energy-efficient and renewable energy-based heating solutions. companies are focusing on developing innovative products that cater to the diverse needs of various industries

The global residential gas water heater market is experiencing robust growth, projected to reach a market size of $865.7 million in 2025, exhibiting a Compound Annual Growth Rate (CAGR) of 7.0% from 2019 to 2033. This expansion is driven by several factors. Increasing urbanization and rising disposable incomes in developing economies fuel demand for improved home amenities, including efficient and reliable hot water systems. Growing awareness of energy efficiency and the environmental benefits of gas water heaters, compared to electric alternatives, is also significantly contributing to market growth. Furthermore, technological advancements leading to the development of tankless and high-efficiency models are attracting consumers seeking both cost savings and improved performance. The market is segmented by type (tank and tankless) and application (household and commercial), with the household segment dominating due to widespread residential adoption. Major players such as AO Smith, Rheem, and Rinnai are vying for market share through product innovation, strategic partnerships, and expansion into new markets. While the overall market trend is positive, certain restraints could potentially impact growth. Fluctuations in natural gas prices and government regulations regarding emissions and energy efficiency standards could present challenges. However, the ongoing demand for reliable and efficient hot water solutions, coupled with continuous technological improvements and increasing consumer awareness, suggests that the residential gas water heater market will maintain a strong trajectory throughout the forecast period. The dominance of North America and Asia Pacific in the market is expected to continue, however, emerging economies in other regions also offer significant growth opportunities for manufacturers. The market's diverse product offerings and expanding geographical reach suggest continued expansion and competitiveness within the industry. This in-depth report provides a comprehensive analysis of the global residential gas water heater market, projected to reach $15 billion by 2028. We delve into market segmentation, key players, emerging trends, and growth drivers, offering invaluable insights for businesses and investors alike. Keywords: gas water heater, tankless water heater, tank water heater, residential water heater, water heating system, energy-efficient water heater, Rheem, AO Smith, Rinnai, Noritz.

The global residential water heater market, valued at $18,367.44 million in 2025, is projected to experience robust growth, driven by a Compound Annual Growth Rate (CAGR) of 6.1% from 2025 to 2033. This expansion is fueled by several key factors. Rising urbanization and increasing disposable incomes in developing economies like those in APAC are boosting demand for improved home amenities, including efficient and reliable water heating systems. Furthermore, growing environmental awareness and stringent regulations promoting energy efficiency are driving the adoption of electric and solar water heaters. The shift towards sustainable energy solutions is particularly evident in developed markets like North America and Europe, where government incentives and consumer preference for eco-friendly products are contributing to market growth. Competition within the market is intense, with leading companies employing diverse strategies to gain market share, including product innovation, strategic partnerships, and expansion into new geographical regions. The market is segmented by water heater type (electric, gas, solar) and distribution channel (specialty stores, department stores & supermarkets, online retailers, and others), reflecting consumer preferences and purchasing habits. The dominance of specific segments will likely vary across regions due to factors such as energy infrastructure, climate, and consumer purchasing power. The market's growth trajectory is expected to be influenced by several factors. Continued technological advancements leading to improved energy efficiency and smart features in water heaters will continue to drive demand. However, fluctuations in raw material prices, particularly for gas-powered models, and economic downturns could pose challenges. The market will also need to address concerns around the environmental impact of certain water heater types, particularly regarding greenhouse gas emissions. Regional variations in growth will be influenced by specific market conditions, including infrastructure development, government policies, and consumer preferences. The forecast period will likely witness a gradual shift towards more sustainable options like solar and electric water heaters, particularly in regions with supportive government policies and increasing consumer environmental awareness. Competition will remain fierce, with companies constantly innovating to offer superior products and services.

This statistic shows the tankless water heater sales in North America in 2016 and 2017. In 2017, tankless water heater sales in the United States amonted to 451 million U.S. dollars.

Snapshot img

Residential Water Heater Market Size 2025-2029

The residential water heater market size is forecast to increase by USD6.33 billion at a CAGR of 6.1% between 2024 and 2029.

The market is experiencing significant growth due to several key factors. One major trend is the increasing adoption of alternative water heating solutions, such as solar products and hybrid water heaters. These innovative technologies offer energy efficiency and cost savings for homeowners. Additionally, the market is witnessing an uptick in funding for research and development of advanced water heating technologies, including tankless products and high-efficiency storage tanks. However, the high initial cost of these technologies remains a challenge for some consumers, limiting their widespread adoption. Overall, the market is poised for continued growth as consumers seek sustainable and cost-effective water heating solutions for their homes.

What will be the Size of the Market During the Forecast Period?

Request Free Sample

This market encompasses various types of water heating systems, including electric, gas, solar, and tankless products, designed to meet the hot water needs of households. Energy efficiency and environmental concerns have emerged as key drivers in the market. Consumers are increasingly seeking energy-efficient solutions to reduce their carbon footprint and save on utility bills. Consequently, there is a growing demand for water heating systems that comply with stringent energy efficiency standards and offer reduced greenhouse gas (GHG) emissions. One trend gaining traction in the market is the integration of wi-fi connectivity.
This feature enables remote monitoring and control of water heating systems using smartphone apps, offering convenience and energy savings. Additionally, smart grids and rural electrification projects are expected to further boost the adoption of wi-fi-enabled water heaters in the US. Another trend is the growing popularity of hybrid water heating systems. These systems combine various energy sources, such as electric, gas, and solar, to provide hot water efficiently and cost-effectively. Hybrid water heaters offer the benefits of multiple energy sources while minimizing the reliance on a single fuel source, making them an attractive option for consumers. The construction industry plays a crucial role in the market.

How is this market segmented and which is the largest segment?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Type

  Electric
  Gas
  Solar


Distribution Channel

  Specialty stores
  Department stores and supermarkets
  Online retailers
  Others


Geography

  APAC

    China
    India
    Japan
    South Korea


  North America

    Canada
    US


  Europe

    Germany
    UK
    France
    Italy


  South America



  Middle East and Africa

By Type Insights

The electric segment is estimated to witness significant growth during the forecast period.

The market in the United States is divided into various types, with electric water heaters holding a substantial share. The growth of this segment can be attributed to technological advancements and the rising preference for energy-efficient and eco-friendly alternatives. Notably, integrated systems that merge heating, cooling, and water heating into a solitary, all-electric solution are gaining popularity. For instance, Villara Corporation's AquaThermAire system, which received the 2024 Sacramento Inno Award on November 2024, is a prime example. This system overcomes the constraints of conventional heat pumps by providing a comprehensive solution that aligns with California's ambitious 2050 carbon-free objectives. Raw materials and aftermarket services are essential components of the residential water heater industry.

Manufacturers focus on utilizing high-quality materials to ensure product durability and efficiency. Additionally, aftermarket services, including maintenance, repairs, and upgrades, are crucial for retaining customers and expanding market reach. GE Appliances, a leading home appliance company, offers various water heater solutions, including electric models, that cater to diverse consumer needs. In conclusion, the market in the United States is driven by the increasing demand for energy-efficient and eco-friendly solutions. Electric water heaters, with their technological advancements and comprehensive integrated systems, are leading the market's growth. Companies like GE Appliances are capitalizing on this trend by offering high-quality products and aftermarket services to cater to the evolving needs of consumers.

Get a glance at the market report of share of various segments Request Free Sample

The Electric segment was va

The global commercial water heater market, valued at $11.02 billion in 2025, is projected to experience robust growth, driven by the increasing demand for hot water in commercial establishments like hotels, restaurants, and industrial facilities. A compound annual growth rate (CAGR) of 4.36% from 2025 to 2033 indicates a significant expansion, reaching approximately $16 billion by 2033. This growth is fueled by several key factors. The rising adoption of energy-efficient technologies, such as heat pump water heaters and solar water heaters, is reducing operational costs and boosting environmental sustainability, attracting businesses seeking to minimize their carbon footprint. Furthermore, stringent government regulations promoting energy conservation and stricter building codes mandating efficient water heating systems are stimulating market growth. The market is segmented by heater type (electric, gas, solar) and distribution channel (offline, online), with the online segment experiencing faster growth due to increased accessibility and e-commerce penetration. While rising raw material prices and potential supply chain disruptions represent challenges, the overall market outlook remains positive, particularly in regions like APAC, driven by rapid urbanization and industrialization in countries such as China and India. Growth within the commercial water heater market is regionally diverse. North America, particularly the US, maintains a strong market presence due to established infrastructure and high consumer spending. However, the Asia-Pacific region is expected to witness the fastest growth, propelled by expanding economies and rising infrastructure development. Europe displays steady growth, influenced by government initiatives focused on energy efficiency. Competition among leading companies is intense, with companies employing strategies focused on innovation, technological advancements, and strategic partnerships to maintain market share. The increasing focus on sustainable solutions and smart technologies within water heaters is expected to further shape market dynamics in the coming years, presenting opportunities for companies that can effectively meet evolving consumer demands and environmental regulations.

North America Residential Water Heater Market size was valued at USD 3.8 Billion in 2024 and is projected to reach USD 6.15 Billion by 2032, growing at a CAGR of 6.2% from 2026 to 2032. The North America residential water heater market is driven by increasing demand for energy-efficient and eco-friendly heating solutions, supported by government incentives and regulations promoting energy conservation. The growing adoption of tankless and hybrid water heaters, along with advancements in smart technologies, further accelerates market growth. Rising urbanization, population growth, and extreme climatic conditions boost the demand for reliable hot water solutions. Additionally, the replacement of aging water heaters and consumer preference for cost-effective, high-performance units contribute to market expansion.

Snapshot img

The Tankless Water Heater Market study is a comprehensive report with in-depth qualitative and quantitative research evaluating the current scenario and analysing the growth of -5.45% and CAGR of 4% with USD 1.07 billion during the forecast period 2019 to 2024.

This market research report provides valuable insights into the post-COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers market segmentation by product (electric and gas), geography (Europe, APAC, North America, South America, and MEA), and end-user (residential and commercial). The tankless water heater market report also offers information on several market vendors, including A. O. Smith Corp., Ariston Thermo Spa, Bradford White Corp., Dometic Group AB, Haier Smart Home Co. Ltd., NORITZ Corp., Rheem Manufacturing Co., Rinnai Corp., Robert Bosch GmbH, and Westinghouse Electric Corp. among others.

What will the Tankless Water Heater Market Size be During the Forecast Period?

Download the Report Sample to Unlock the Tankless Water Heater Market Size for the Forecast Period and Other Important Statistics

Parent Market Analysis

Our Technavio Research categorizes the global tankless water heater market belonging to the household appliances industry. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the market during the forecast period.

Tankless Water Heater Market: Key Drivers, Trends, and Challenges

The research studied the historical data considered for years, with 2019 as the base year, and 2020 as the estimated year.

Key Tankless Water Heater Market Driver

One of the key factors driving growth in the market is the technological innovations in design and higher efficiency. The increase in the global demand for water heating systems has led to the introduction of tankless water heaters that are innovative in terms of design and efficiency. The increased sales of tankless water heaters in residential and commercial establishments have influenced vendors to launch products that meet the evolved design choices of customers. The demand for a specific design depends on the place and ambience of the installation. For instance, tankless water heaters used in residential establishments are designed for mild use for both indoor and outdoor installation. Tankless water heaters used in commercial establishments must be classy, modern, and innovative with higher efficiency. Many players in the global market, such as A. O. Smith, and NORITZ AMERICA, offer heavy-duty, square-shaped, cylindrical, and rack system tankless water heaters that are specifically designed for high-volume use. Vendors are incorporating technological advances in tankless water heaters, especially in terms of efficiency; for example, the incorporation of new features for easy installation, operation, and maintenance. The rising competency among manufacturers in the global market will lead to increased innovation and product offerings, consecutively leading to the increased use of the product during the forecast period.

Key Tankless Water Heater Market Challenge

The high operational and installation cost will be a major challenge for the market during the forecast period. The adoption of tankless water heaters has several costs associated with it apart from the cost of the water heater. The average cost of installing a single unit of tankless water heater is approximately USD 1,700. Homeowners need to spend between USD 900 and USD 2,700 on installation, depending on the model and other factors like labour cost, which are influential. For instance, the average hourly rate of a professional plumber in the US ranges between USD 40 and USD 160 which can yield a total labour cost of USD 100- USD 460. Some of the other costs related to the installation of tankless water heaters include certain necessary parts, such as a gas connector kit, termination vent kit, mounting hardware, and two-piece lead-free brass valve set, along with fittings. The installation cost of tankless water heaters also depends on the cost of the heating unit. For instance, the single point electric heating unit costs around USD 200 each, while the high-end gas models that are installed for the entire house can cost around USD 1,000. This high installation cost of tankless water heaters discourages users from investing heavily and restricts the demand for tankless water heaters.

This market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2020-2024.

Who are the Major Tankless Water Heater Market Vendors?

The report analyze

The commercial water heater market is estimated to be valued at US$ 8.2 billion in 2024. The commercial water heater is predicted to rise at a CAGR of 6.9% from 2024 to 2034. The global commercial water heater market is anticipated to reach US$ 16 billion by 2034.

Attributes	Key Insights
Estimated Market Size in 2024	US$ 8.2 billion
Projected Market Value in 2034	US$ 16 billion
Value-based CAGR from 2024 to 2034	6.9%

2019 to 2023 Historical Analysis vs. 2024 to 2034 Market Forecast Projections

Historical CAGR from 2019 to 2023	8.6%
Forecast CAGR from 2024 to 2034	6.9%

Country-wise Analysis

Countries	The Forecast CAGRs from 2024 to 2034
United States	7.2%
United Kingdom	8.1%
China	7.7%
Japan	8.0%
South Korea	9.0%

Category-wise Insights

Category	CAGR
Below 500 L	6.6%
0 to 10 kW	6.3%

Report Scope

Attributes	Details
Estimated Market Size in 2024	US$ 8.2 billion
Projected Market Valuation in 2034	US$ 16 billion
Value-based CAGR 2024 to 2034	6.9%
Forecast Period	2024 to 2034
Historical Data Available for	2019 to 2023
Market Analysis	Value in US$ billion
Key Regions Covered	North America Latin America Western Europe Eastern Europe South Asia and Pacific East Asia Middle East and Africa
Key Market Segments Covered	Storage Capacity Power Rating Fuel Type Application Region
Key Countries Profiled	The United States Canada Brazil Mexico Germany The United Kingdom France Spain Italy Russia Poland Czech Republic Romania India Bangladesh Australia New Zealand China Japan South Korea GCC countries South Africa Israel
Key Companies Profiled	A.O. Smith Rinnai Corporation Rheem Manufacturing Ariston Thermo S.p.A Racold Midea Group Nibe Corporation Nortiz Corporation Hubbell Valliant Lowe’s Bradford White Corporation Flexiheat UK Ltd Daikin Industries

Snapshot img

Instant Water Heater Market Size 2025-2029

The instant water heater market size is forecast to increase by USD 1.89 billion at a CAGR of 5.1% between 2024 and 2029.

The market is experiencing significant growth, driven primarily by the expansion of the hospitality sector and the increasing preference for electric water heaters due to their energy efficiency and convenience. The global hospitality industry's expansion, particularly in developing economies, is fueling the demand for instant water heaters, as these systems enable hotels and resorts to offer their guests a continuous supply of hot water. Furthermore, the market is witnessing significant growth due to the integration of advanced technologies such as smart home systems, filtration, and purification in compact water heaters. Tankless water heaters, with their smart controls and programmable settings, are becoming the preferred choice for energy-conscious consumers. The HVAC industry is also embracing instant water heaters as part of a comprehensive energy strategy. Limited space is another factor driving the growth of the market. 
These challenges may hinder market growth, particularly in regions with limited infrastructure and resources. To capitalize on market opportunities and navigate these challenges effectively, companies must focus on innovation, cost reduction, and improving after-sales services. By addressing these issues, market players can differentiate themselves from competitors and tap into the significant potential of the market.

What will be the Size of the Instant Water Heater Market during the forecast period?

Request Free Sample

The market encompasses a range of solutions designed to provide hot water on-demand for various applications, including commercial and industrial buildings. Gas storage and condensing technology are prominent in this sector, offering energy-efficient solutions that align with comprehensive energy strategies. The market is witnessing significant growth due to the increasing adoption of smart homes and networked ecosystems, where instant water heaters contribute to overall system efficiency. Hybrid water heaters, which combine multiple heating technologies, offer configurable solutions that cater to diverse requirements.
The environmental agenda is driving demand for eco-friendly, low-emission solutions, with instant water heaters becoming an integral part of the HVAC industry. Power plants and industrial units also leverage instant water heaters for their high-performance capabilities. Overall, the market is poised for continued expansion, offering innovative, energy-efficient, and cost-effective hot water solutions.

How is this Instant Water Heater Industry segmented?

The instant water heater industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. End-userCommercialResidentialProduct TypeSingle-PointMulti-PointDistribution ChannelOfflineOnlineGeographyEuropeFranceGermanyItalyThe NetherlandsUKNorth AmericaUSCanadaAPACChinaIndiaJapanSouth AmericaMiddle East and Africa

By End-user Insights

The commercial segment is estimated to witness significant growth during the forecast period. Instant water heaters are increasingly adopted in commercial facilities due to the high demand for continuous hot water supply. The hospitality industry's growing preference for energy-efficient heating solutions, technological advancements in instant water heaters, and expanding government initiatives are key market drivers. However, the commercial segment faces challenges such as high installation costs, market competition, and stringent regulatory standards. Despite these obstacles, the market will continue expanding due to the increasing adoption of IoT technology, the promotion of energy-efficient commercial buildings, and the introduction of smart and connected devices. Instant water heaters offer energy savings through the elimination of standby losses and the ability to heat water on-demand.

Energy efficiency is a significant concern for commercial buildings, with many implementing comprehensive energy strategies that include renewable energy solutions, such as solar panels and hybrid water heaters. Energy source flexibility, configurable solutions, and personalization are essential features for commercial users. Instant water heaters come in various designs, including compact and visually attractive options, and offer intelligent algorithms and smart controls for optimized energy usage. The market is expected to grow due to the increasing focus on eco-friendly appliances and energy-efficient heating options. The market's expansion is further driven by the integration of renewable energy sources, networking capabilities, and voice-activated assistants, as well as the growing popul