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Tankless Water Heater Products Market Size, Share, & Trends Analysis Report (2023 – 2030)
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Report Overview
The global tankless water heater products market was valued at USD 5.8 billion in 2021 and is anticipated to expand at a CAGR of 5.6% from 2022 to 2029. A tankless water heater is a device that is used to heat water on demand, without the need to store it in a tank. This type of water heater helps to save energy, as it does not require a continuously running pilot light. Moreover, it does not require a large storage tank, making it an ideal choice for households with limited space. Additionally, tankless water heaters provide a continuous supply of hot water and are more efficient than traditional water heaters.
The increasing awareness among consumers regarding energy conservation is driving the demand for tankless water heaters across the globe. Furthermore, the growing trend of miniaturization is driving the demand for more compact and efficient water heaters. In line with this, the trend of smart homes is gaining traction, which is further propelling the demand for tankless water heaters. The emergence of advanced features such as remote access and control, along with Wi-Fi connectivity, is driving the growth of the market.
The emergence of advanced technologies such as electric tankless water heaters is expected to drive the market growth further. The electric tankless water heaters are available in different sizes and are known for their higher efficiency, low maintenance, and low operating costs. Furthermore, the increasing number of product launches is driving the demand for tankless water heaters. For instance, in October 2021, Rheem Manufacturing Co. launched its new tankless water heater, which is designed to incorporate the brand’s patented Intelli-Flo™ Technology. The new tankless water heater is designed to provide a continuous supply of hot water, while also reducing energy costs.
Furthermore, the increasing adoption of tankless water heaters in commercial establishments is driving the growth of the market. The need for energy-efficient and cost-effective water heating solutions is driving the demand for tankless water heaters in commercial establishments. For instance, in March 2021, Bosch Thermotechnology launched its new line of commercial tankless water heaters, which are designed to provide a continuous supply of hot water while also conserving energy.
The rising investments in the construction industry are boosting the growth of the market. Furthermore, the increasing disposable incomes in the developing countries are driving the demand for tankless water heaters. The increasing trend of renovation and remodeling of existing homes is also driving the demand for tankless water heaters. Moreover, the increasing demand for tankless water heaters in residential and commercial establishments is driving the growth of the market.
Product Insights
The electric segment dominated the market and accounted for a share of around 45.9% in 2020. Increasing demand for energy-efficient water heaters is one of the major factors driving the electric tankless water heater market. According to an article published by The Balance Small Business, in April 2020, electric tankless water heaters are 20% to 30% more energy efficient than standard electric water heaters. Furthermore, the availability of a wide range of digital and high-end features such as remote control, digital temperature display, and automatic shutoff are driving the electric tankless water heater market growth.
The gas segment is expected to expand at the fastest CAGR of 4.4% over the forecast period. Growing demand for gas tankless water heaters in commercial establishments such as hospitals and malls due to their higher efficiency is driving the gas tankless water heater market growth. According to an article published by Plumber Magazine, in April 2020, gas-fired tankless water heaters are up to 40% more efficient than traditional storage tank water heaters. In addition, the rising focus of government authorities towards the adoption of energy-saving products is another factor propelling the market growth.
Distribution Channel Insights
The major distribution channels for tankless water heater products are hardware stores and DIY stores. These stores accounted for over 50.0% share of the market in 2022. The consumers prefer to buy these products from such stores due to the availability of several brands and models under one roof. Additionally, the store sales personnel provide detailed information about the product, which helps consumers in the purchase decision-making process.
The online segment is anticipated to grow at the highest CAGR of 14.7% over the forecast period. The growth of this segment is attributed to the increasing prevalence of e-commerce websites and mobile apps. For instance, in March 2022, Lowe’s, a US-based home improvement retailer, launched its mobile app, which allows users to check the availability of products in their nearby stores, compare prices, and order products online. This app has enabled consumers to purchase tankless water heaters from their home and get them delivered at their doorstep.
Type Insights
The electric tankless water heater segment accounted for the largest revenue share of 68.2% in the year 2022. The increasing demand for energy-efficient water heaters is driving the market growth. Electric tankless water heaters are more efficient than traditional tank-style water heaters as they heat water on demand. Furthermore, the ease of installation and low maintenance cost of electric tankless water heaters has also increased their popularity in the market.
The gas tankless water heater segment is anticipated to expand at the highest CAGR of 8.3% over the forecast period. The growing adoption of gas tankless water heaters for commercial purposes such as restaurants and hotels is propelling the demand for the segment. Also, the increasing penetration of natural gas in households is driving the demand for gas tankless water heaters. Moreover, the convenience of controlling the temperature of the water supplied in a gas tankless water heater is also fueling the market growth.
Regional Insights
Europe is expected to be the largest market for tankless water heaters during the forecast period, attributed to the presence of numerous manufacturers in the region. Moreover, the increasing adoption of energy-efficient solutions in the residential and commercial sectors to reduce carbon emissions is expected to drive the market in the region. For instance, in February 2021, Stiebel Eltron, a Germany-based manufacturer of water heaters, launched its first fully electric, tankless water heater for commercial buildings.
North America is expected to witness significant growth over the forecast period owing to the growing demand for energy-efficient solutions from the residential sector. The region is home to some of the leading manufacturers, such as Rheem and A. O. Smith, who focus on developing energy-efficient products. For instance, in April 2021, Rheem Manufacturing Company launched the Prestige Tankless Water Heater for residential usage, offering up to 94% energy efficiency.
Financial Projections
In this part of the tankless water heater products business plan, we will provide a detailed breakdown of all income and expense categories of the business. These forecasts include cash flow projections and capital requirements for your tankless water heater products business. Usually, these projections are drafted for a 5-year period.
Revenue Assumptions
The main source of revenues for a tankless water heater products business comes from the sale of the product itself. Other potential sources of revenue include installation fees, service fees, and warranty fees.
Projecting Expenses
In this section, all the regular expenses related to keeping the tankless water heater products business running will be described. The list of operating expenses includes wages, utilities, rent, marketing and advertising costs, research and development costs, website hosting costs, insurance policies, and other miscellaneous expenses.
Key companies & market share insights
Some of the key companies operating in the tankless water heater market are increasingly focusing on product launches and expansion of the distribution channel to gain prominent visibility among consumers. Some of the initiatives are:
– In October 2022, Rheem Manufacturing Co. launched the EcoNet Series of tankless water heaters, which are designed to provide more efficient and eco-friendly hot water for residential use.
– In August 2022, Bradford White Corp. launched the Ultra Series of tankless water heaters, which are designed to provide up to 50% more hot water than traditional tank-type heaters.
– In June 2022, A. O. Smith Corporation launched the ProLine Series of tankless water heaters, which are designed to provide up to 50% more efficient hot water than standard tank-type heaters.
Some of the prominent players in the tankless water heater market include:
– Rheem Manufacturing Co.
– Bradford White Corp.
– A. O. Smith Corporation
– Bosch Thermotechnology
– Noritz Corporation
– GE Appliances
– Rinnai Corporation
– Navien Inc.
– Eccotemp Systems LLC
– Viessmann Manufacturing Company Inc.
Global Tankless Water Heater Market Segmentation
This report forecasts growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global tankless water heater products market based on product, application, end-user, and region:
1. Product Outlook (Revenue, USD Million, 2017 – 2030)
– Electric Water Heaters
– Gas Water Heaters
– Solar Water Heaters
2. Application Outlook (Revenue, USD Million, 2017 – 2030)
– Residential
– Commercial
– Others
3. End-user Outlook (Revenue, USD Million, 2017 – 2030)
– Single-Family Homes
– Multifamily Homes
– Hotels & Hospitals
– Others
4. Regional Outlook (Revenue, USD Million, 2017 – 2030)
– North America
– Europe
– Asia Pacific
– Central & South America
– Middle East & Africa
Frequently Asked Questions
[Q]: What are the Key Drivers of the Tankless Water Heater Market?
[A]: The global tankless water heater market is driven by increasing demand for energy-efficiency, rising disposable incomes, and government initiatives to promote the adoption of renewable energy sources. Additionally, the rising adoption of smart thermostats in the home and the growing popularity of connected appliances are driving the growth of the tankless water heater market.
[Q]: Who are the Key Players in the Tankless Water Heater Market?
[A]: Key players in the global tankless water heater market include A.O. Smith Corporation, Rinnai Corporation, Noritz Corporation, Bosch Thermotechnology, Bradford White Corporation, Rheem Manufacturing Company, Eemax, Inc., Eccotemp Systems, LLC, and Stiebel Eltron, Inc.
[Q]: What is the Potential of Product Innovation?
[A]: Product innovations such as the introduction of Wi-Fi-enabled tankless water heaters and smart thermostats are expected to drive market growth over the forecast period. Additionally, the increasing focus on energy-efficiency is expected to drive the demand for tankless water heaters over the forecast period.
[Q]: Which Region Offers the Largest Opportunity for Sales of Tankless Water Heaters?
[A]: Asia Pacific is expected to be the largest tankless water heater market, with an absolute dollar opportunity of $2.1 billion (USD) during the forecast period. This is attributed to the growing demand for energy-efficient appliances in countries such as India, China, and Japan.
[Q]: What are the factors restraining the tankless water heater market?
[A]: The high cost of installation and maintenance is a major restraint for the tankless water heater market. Additionally, the need for significant energy for the efficient operation of tankless water heaters is expected to restrain the growth of the market.
Research Methodology
Impact Analytix employs a comprehensive and iterative research methodology focused on minimizing deviance in order to provide the most accurate estimates and forecasts possible. The company utilizes a combination of bottom-up and top-down approaches for segmenting and estimating quantitative aspects of the market. In Addition, a recurring theme prevalent across all our research reports is data triangulation which looks market from three different perspectives. Critical elements of the methodology employed for all our studies include:
Preliminary data mining
Raw market data is obtained and collated on a broad front. Data is continuously filtered to ensure that only validated and authenticated sources are considered. In addition, data is also mined from a host of reports in our repository, as well as a number of reputed paid databases. For a comprehensive understanding of the market, it is essential to understand the complete value chain and in order to facilitate this; we collect data from raw material suppliers, distributors as well as buyers.
Technical issues and trends are obtained from surveys, technical symposia, and trade journals. Technical data is also gathered from an intellectual property perspective, focusing on white space and freedom of movement. Industry dynamics with respect to drivers, restraints, and pricing trends are also gathered. As a result, the material developed contains a wide range of original data that is then further cross-validated and authenticated with published sources.
Statistical model
Our market estimates and forecasts are derived through simulation models. A unique model is created and customized for each study. Gathered information for market dynamics, technology landscape, application development, and pricing trends are fed into the model and analyzed simultaneously. These factors are studied on a comparative basis, and their impact over the forecast period is quantified with the help of correlation, regression, and time series analysis. Market forecasting is performed via a combination of economic tools, technological analysis, industry experience, and domain expertise.
Econometric models are generally used for short-term forecasting, while technological market models are used for long-term forecasting. These are based on an amalgamation of the technology landscape, regulatory frameworks, economic outlook, and business principles. A bottom-up approach to market estimation is preferred, with key regional markets analyzed as separate entities and integration of data to obtain global estimates. This is critical for a deep understanding of the industry as well as ensuring minimal errors. Some of the parameters considered for forecasting include:
Market drivers and restraints, along with their current and expected impact
Raw material scenario and supply v/s price trends
Regulatory scenario and expected developments
Current capacity and expected capacity additions up to 2030
We assign weights to these parameters and quantify their market impact using weighted average analysis, to derive an expected market growth rate.
Primary validation
This is the final step in estimating and forecasting our reports. Exhaustive primary interviews are conducted, face to face as well as over the phone to validate our findings and assumptions used to obtain them. Interviewees are approached from leading companies across the value chain including suppliers, technology providers, domain experts, and buyers so as to ensure a holistic and unbiased picture of the market. These interviews are conducted across the globe, with language barriers overcome with the aid of local staff and interpreters. Primary interviews not only help in data validation but also provide critical insights into the market, current business scenario, and future expectations and enhance the quality of our reports. All our estimates and forecast are verified through exhaustive primary research with Key Industry Participants (KIPs) which typically include:
Market-leading companies
Raw material suppliers
Product distributors
Buyers
The key objectives of primary research are as follows:
To validate our data in terms of accuracy and acceptability
To gain an insight into the current market and future expectations
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