Tankless Water Heater Market

Tankless Water Heater Market Study by Condensing and Non-Condensing Technology for Indoor and Outdoor Spaces from 2024 to 2034

Analysis of Tankless Water Heater Market Covering 30+ Countries Including Analysis of US, Canada, UK, Germany, France, Nordics, GCC countries, Japan, Korea and many more

Tankless Water Heater Market Outlook (2024 to 2034)

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 forecast to rise at a CAGR of 4.9% and reach US$ 9.5 billion by the end of 2034.

With technology progressing continuously and client expectations increasing for more energy-efficient and space-saving solutions, tankless water heaters have emerged as an appealing option for both residential and commercial applications. Consumers are increasingly purchasing tankless water heaters as they provide hot water quickly, improve energy efficiency, and have a longer lifespan than typical storage tank water heaters.

Furthermore, increasing environmental concerns and strict energy efficiency regulations are driving the installation of tankless water heating systems. To meet the different needs of consumers, tankless water heater manufacturers are coming out with more features, such as smart home integration, improved scalability, and increased durability. With growing awareness of the long-term cost savings and environmental benefits of tankless water heaters, the market is projected to grow steadily over the coming years.

Key Market Growth Drivers

  • Tankless water heaters are popular for their higher energy efficiency as compared to typical storage tank water heaters.
  • Consumers and businesses are becoming more concerned about their energy consumption, and tankless models are appealing due to their capacity to lower energy expenditures over time.
  • Ongoing advancements in technology have led to the development of more efficient and intelligent tankless water heater systems. Features such as smart controls, Wi-Fi connectivity, and remote monitoring are enhancing the user experience and efficiency.
  • Tankless water heaters offer hot water on demand, removing the requirement for preheating and lowering the energy losses associated with storage tank water heaters.
  • The tankless water heater market share is rising due to increased consumer knowledge of its benefits, such as energy savings, environmental impact, and long-term cost-effectiveness.
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

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How are Manufacturers Responding to Evolving Tankless Water Heater Market Trends?

“Innovation & Product Development in Tankless Water Heaters”

Tankless water heater manufacturers are actively investing in research and development to bring in a new era of innovation in the industry. They look to meet changing consumer demands for convenience and sustainability by focusing on improving energy efficiency, increasing durability, incorporating smart home capabilities, and providing enhanced control options. Manufacturers are aiming to develop advanced technologies that not only optimize energy consumption but also extend the tankless water heater's lifespan.

By embracing smart home integration, companies are providing consumers with increased control and accessibility, allowing them to manage their hot water systems more easily and efficiently. Finally, this drive for innovation demonstrates the industry's dedication to offering high-performance, environment-friendly solutions that meet the diversified needs of modern consumers.

“Compliance with Regulations and Standards”

Tankless water heater manufacturers prioritize complying with regulations and industry standards, assuring adherence to norms controlling energy efficiency, safety, and environmental sustainability. By meeting these criteria, producers are demonstrating their commitment to providing high-quality products that promote consumer safety and environmental sustainability.

This kind of dedication not only strengthens market credibility with some of the best tankless water heaters but also increases competitiveness by establishing trust in consumers and stakeholders. By prioritizing compliance, manufacturers are contributing to the industry's overall integrity and sustainability while satisfying the changing demands and expectations of customers in an increasingly conscious market environment. These key factors are driving global tankless water heater market growth.

What are the Primary Challenges Hindering Widespread Adoption of Tankless Water Heaters?

“Higher Initial Cost and Installation Complexity”

Tankless water heaters provide long-term energy savings and other benefits; however, the initial cost is expensive for budget-conscious consumers. This high tankless water heater cost covers not just the unit's purchase but also any prospective costs associated with plumbing and electrical system upgrades during installation.

The installation process is also more complicated compared to traditional water heaters, driving the need for professional assistance to ensure appropriate configuration. This pushes up labor costs and requires changes to the current infrastructure. As a result, these financial and logistical constraints are hindering the expansion of the tankless water heater market size by limiting its overall penetration and adoption.

“Insufficient Water Pressure from Simultaneous Hot Water Demand”

Tankless water heaters are intended to supply hot water on demand, which means they must heat water quickly as it flows through the device. However, this rapid heating process can result in a low flow rate, particularly when several fixtures or appliances want hot water at the same time. In larger households or commercial settings with significant hot water demand, this limitation results in insufficient water pressure and temperature changes, reducing user experience and satisfaction.

To overcome this issue, users are considering investing in larger tankless units or adding supplemental solutions such as point-of-use heaters to ensure a continuous and sufficient supply of hot water throughout the residence. Furthermore, developments in tankless water heater technology are resulting in higher flow rates, providing more dependable and efficient hot water delivery for a variety of applications.

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Country-wise Insights

Why is China a Lucrative Market for Tankless Water Heater Manufacturers?

“Huge Market Potential and Production Capability”

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

Huge population of China and rapid urbanization have increased the demand for household and commercial water heating systems. As living standards rise and consumers seek more convenient and energy-efficient equipment, tankless water heaters are increasingly preferred over traditional storage tank models. Furthermore, production capabilities and cost efficiencies established in China's industrial infrastructure allow manufacturers to build tankless water heaters at reasonable rates, appealing to both domestic and international markets.

Overall, the combination of high market demand, legislative backing, substantial manufacturing ability, and a large distribution network makes China an appealing and prospective market for tankless water heater manufacturers looking for growth opportunities.

How Fast is Demand for Tankless Water Heaters Rising in the United States?

“Favorable Government Initiatives Driving Tankless Water Heater Sales”

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

Government initiatives in the United States are increasing tankless water heater sales through a variety of approaches targeted at encouraging energy efficiency and lowering carbon emissions. An important program is the granting of tax credits, rebates, and incentives to homeowners and companies that invest in energy-efficient products, such as tankless water heaters. These financial incentives serve to reduce the initial cost of purchasing and installing tankless systems, making them more affordable and appealing to consumers.

Furthermore, federal and state energy efficiency programs promote the use of environment friendly technologies by providing grants and money for research, development, and deployment of energy-efficient appliances. Manufacturers and merchants of tankless water heaters frequently use these programs to broaden their market reach and encourage consumers to upgrade to more efficient units.

Category-wise Insights

Why are Sales of Electric Tankless Water Heaters Higher than Gas Tankless Water Heaters?

“Electric Variants Require Low Installation Cost Compares to Gas Tankless Water Heaters”

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

Electric tankless water heaters typically come with cheaper initial costs than their gas counterparts. This initial affordability makes them more appealing to a wider range of users, particularly those who are put off by the higher initial expenditure required for gas models. Furthermore, because electric tankless water heaters do not require venting or gas line connections, they are easier and less expensive to install, which contributes to their appeal among households and businesses.

Why Do Condensing Tankless Water Heaters Account for a larger Market Share?

“Energy Efficiency and Low Greenhouse Gas Emissions”

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

Condensing tankless water heaters are extremely energy efficient. They use innovative technology to catch and use heat from exhaust gases that would otherwise be squandered in non-condensing models. This higher efficiency results in decreased energy expenditures for consumers, making condensing tankless water heaters a more appealing choice.

Additionally, condensing tankless water heaters have less greenhouse gas emissions as compared to non-condensing variants. Condensing units are cleaner and contribute to environmental sustainability by extracting more heat from combustion emissions. Condensing tankless water heaters also have higher flow rates and can deliver a continuous supply of hot water compared to non-condensing ones. This makes them better suited for larger houses and commercial spaces that require more quantities of hot water.

Know thy Competitors

Competitive landscape highlights only certain players
Complete list available upon request

Competitive Landscape

Key players in the tankless water heater industry are A. O. Smith, Rinnai Corporation, Fofatti Inc., Haier Smart Home Co Ltd., Rheem Manufacturing Company, Bajaj Electricals Ltd., EcoSmart Green Energy Products, Inc., Atmor, Noritz America, Takagi, Stiebel Eltron Inc., Navien Inc., and Bradford White Corporation.

  • In September 2023, A.O. Smith launched its Concentric Vent Non-condensing Tankless Water Heater range, which includes X3 Scale Prevention Technology.
  • In March 2023, On the 20th anniversary of its parent company, Fogatti launched its new RV Tankless Water Heater, 8pro (55000 BTU RV), with advanced features such as high altitude suitability mode, instant hot water (2.9 gallons per minute), energy efficiency, and technology solely focused on consumer safety.

Segmentation of Tankless Water Heater Market Research

  • By Technology :

    • Condensing Tankless Water Heaters
    • Non-Condensing Tankless Water Heaters
  • By Energy Source :

    • Electric Tankless Water Heaters
    • Gas Tankless Water Heaters
  • By Energy Factor :

    • 0 to 0.79 EF
    • 0.80 to 0.89 EF
    • 0.90 & Above
  • By Application :

    • Indoor Tankless Water Heaters
    • Outdoor Tankless Water Heaters
  • By End User :

    • Residential
    • Commercial
  • By Sales Channel :

    • Hypermarkets/ Supermarkets
    • Specialty Stores
    • Consumer Electronic Stores
    • Online Retailers
    • Direct Sales
  • By Region :

    • North America
    • Europe
    • Latin America
    • East Asia
    • South Asia & Oceania
    • Middle East & Africa

- FAQs -

What is the market size for tankless water heaters in 2024?

The global tankless water heater market size is estimated at US$ 4.9 billion in 2024.

What is the demand growth projection for tankless water heaters?

Worldwide demand for tankless water heaters is forecasted to rise at a CAGR of 4.9% from 2024 to 2034.

At what rate is the market in Japan forecasted to expand?

The market in Japan is projected to expand at a CAGR of 7.4% through 2034.

Which product type holds a significant market share of tankless water heaters?

Electric tankless water heaters are projected to occupy a market share of 76.2% in 2024.

Who are the key producers of tankless water heaters?

Key players in the market are A. O. Smith, Rinnai Corporation, Haier Smart Home Co Ltd., and Bajaj Electricals Ltd.

- Also of Interest -

Water Heater Market

Water Heater Market Study by Storage Water Heaters, Tankless Water Heaters, and Hybrid Water Heaters from 2024 to 2024

Heat Pump Water Heater Market

Heat Pump Water Heater Market Analysis by Split Systems and Integrated Units for Industrial, Residential, and Commercial Use from 2023 to 2033

Tankless Water Heater Market

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