Water Heater Market Size, Share & Trends Analysis Report By Product (Electric, Solar, Gas), By Technology, By Capacity, By Application (Residential), By Region, And Segment Forecasts, 2023 - 2030

Report Overview 

The global water heater market size was estimated at USD 28.12 billion in 2022 and is anticipated to expand at a compounded annual growth rate (CAGR) of 4.5% from 2023 to 2030. This growth is owing to the increasingly hot water demand from various residential applications, including washing, bathing, cleaning, and cooking. The company’s restructuring its operations and recovering from the COVID-19 impact, which had earlier resulted in restrictive containment measures involving remote working and the closure of commercial activities that resulted in operational challenges, are primarily responsible for the growth of the market.

The COVID-19 pandemic has had a slight effect on the US water heater industry owing to a steady drop in production facilities, as well as delays in different projects and restricted product rollout. Furthermore, continued government regulations and expenditures on the spread of renewable gadgets will drive industry demand. The increasing usage of a diverse range of these products in the commercial and industrial sectors such as the processing and chemical industries is expected to increase product demand. Rising hot water demand, mostly from hospitals and hotels, is expected to drive industry expansion.

Significant expenditures in product research and innovation are expected to drive demand for the electric segment. Key manufacturers such as A.O. Smith and NORITZ Corporation invest in the development of new goods and technology that improve the consumer experience while lowering operational costs. The development of goods with characteristics like corrosion resistance, water filtration, remote control, and monitoring is expected to drive industry expansion.

Favorable measures to improve air quality, as well as growing awareness about the use of renewable solutions, are projected to boost demand for the solar segment. Furthermore, the surging focus of various industry players on product aesthetics and design, coupled with ongoing industry rivalry, is anticipated to fuel industry growth.

Product Insights

The electric segment dominated the market for water heaters and accounted for 51.2% of the revenue share in 2022 owing to the rising electrification rate coupled with increased customer accessibility mainly across the Asia Pacific and African economies. The product demand is expected to be driven by energy efficiency, greater environmental sustainability, and temperature control during the forecast period. The solar segment is expected to witness a CAGR of 5.2% during the forecast period, owing to rising consumer demand for energy-efficient and environmentally friendly water heating systems. The increased attention of various product manufacturers on developing new systems and technologies that perform more efficiently is expected to boost industry expansion.

Stringent government rules to reduce greenhouse gas emissions, along with an increasing emphasis on reducing energy usage owing to the quick depletion of nonrenewable resources, are anticipated to boost demand for solar products. Furthermore, increased environmental consciousness in both developed and developing nations is expected to drive the demand. Over the projection period, the expansion of piped gas networks across various developing nations is expected to result in the widespread use of gas water heaters. Furthermore, a greater emphasis on product innovation and uniqueness is projected to boost demand for gas water heaters, benefiting overall industry growth.

Technology Insights

The storage segment dominated the market for water heaters and accounted for a 54.8% share of the global revenue in 2022 owing to the high energy conversion potential and low maintenance requirement of the product. Furthermore, rising installation in commercial and industrial applications in diverse cold locations across the world is driving product demand. The tankless segment is expected to witness a CAGR of 4.9% from 2023 to 2030, owing to product advantages such as rapid hot water supply and reduced standby heating losses. Furthermore, tankless products use less energy than storage water heaters, which will enhance their popularity in the next years.

Tankless products provide advantages such as more accurate temperature control, increased energy efficiency, and greater environmental sustainability. Surging product adoption across various business spaces due to enhanced operational benefits is expected to boost demand for these products over the projection period. The hybrid segment is expected to have rising demand owing to significant product attributes such as offering cooling and heating from a single unit. These products use electricity to transmit heat from one location to another rather than directly generating power, making them more energy-efficient than electric products.

Capacity Insights

The 30 - 100 liters capacity segment dominated the market for water heaters and accounted for 29.4% revenue share in 2022 owing to the high application aptness across residential as well as various commercial establishments including banks, healthcare, hotels, and government institutions, hotels, and shopping complexes. Rising urbanization, coupled with continuous migration to cities, is expected to boost demand for the 100-250-liter segment. The product's availability in numerous capacities addresses several client demands, such as its use in kitchens, swimming pools, and washrooms, thus boosting market expansion.

The water heater category with a capacity of below 30 liters is expected to witness a CAGR of 4.3% during the forecast period, owing to the increased deployment of low-capacity heating systems, mostly in residential settings. Furthermore, the increasing use of storage tanks is expected to enhance the installation of water heaters with capacities of less than 30 liters in the coming years. The demand for water heaters with a capacity above 400 liters witnessed a CAGR of 5.3% over the forecast period owing to various industrial applications stand-alone or in combination with heat exchangers. The ability of water heaters with more than 400 liters capacity to combine heat pumps with thermal solar systems is expected to boost segment growth.

Application Insights

The residential segment led the market for water heaters and accounted for 54.8% of the revenue share in 2022 owing to the rapid residential infrastructural development, rising disposable incomes, expanding piped gas network, and increasing electrification rate across various developing countries are expected to drive the demand for water heaters in the residential sector. The growing need for dependable, eco-friendly, and inexpensive water heating technologies, particularly in the industrial and residential sectors, is expected to drive market expansion. In addition, the capacity of water heaters to function at reduced costs, up to 75% cheaper in summer and 30% to 40% lower in winter, is expected to boost product demand during the forecast period.

Water heaters are used in various industrial applications such as construction, food and beverage, pharmaceutical, power, and agriculture, which is anticipated to propel the industry’s growth. In the construction industry, water heaters are useful for steam generation, freeze protection, and water heating. The product demand in the commercial sector is expected to expand at a CAGR of 4.6% during the forecast period owing to better government spending towards the development of healthcare centers, which in turn, will significantly augment the water heater installations. Furthermore, increased deployment of tankless products in commercial workplaces is expected to drive market expansion.

Regional Insights

Asia Pacific dominated the global water heater market and accounted for a 37.1% share, in terms of revenue, in 2022. The demand for water heaters in the Asia Pacific region is driven by the increasing availability of gas and electricity across the rural areas and increasing investments in infrastructure, positive momentum in the construction industry, and industrial development in South Asian and South East Asian economies. In addition, the emphasis on carbon neutrality and energy-efficiency standards is expected to boost the market growth.

The demand for water heaters in China is mainly driven by increasing investment and innovation in the construction sector and supporting research & development and implementation of obligatory CO2 emission reduction measures, augmenting the demand for water heaters over the forecast period.

The growth of water heaters in the European region is driven by surging demand for superior and reliable water heaters from various commercial and industrial end-users. Furthermore, the need for hot water to meet the required environmental conditions owing to extreme cold weather in the region is likely to fuel the product demand.

Legislations such as the Ecodesign Directive that emphasized energy efficiency and NOx emissions of water heaters, boilers, and space heaters have driven the market for heating equipment. In addition, the EU directive on energy labeling has created consumer awareness, which is expected to boost the growth of the water heater market over the coming years.

Key Companies & Market Share Insights

The market is extremely fragmented with various global and regional product manufacturers releasing innovative systems and technologies. Various industry participants' strategies typically involve new product development, product upgrades, and expansions to boost market penetration and respond to the changing technical needs of the application industries. The major players form technical partnerships to innovate and develop novel product lines, therefore expanding their consumer base. In addition, evolving consumer preferences along with quality requirements, as well as energy efficiency, are projected to offer new opportunities for key participants in the coming years. Some of the prominent players in the water heater market include:

• A.O. Smith

• Robert Bosch LLC

• Ariston Thermo SpA

• Rheem Manufacturing Company

• Rinnai Corporation

• Bradford White Corporation

• NORITZ Corporation

• Whirlpool Corporation

• Westinghouse Electric Corporation

• Bajaj Electricals Ltd

• Haier Inc.

• Havells India Ltd

• Lennox International Inc.

• FERROLI S.p.A

• Kenmore

Water Heater Market Report Scope

Global Water Heater Market Report Segmentation

This report forecasts revenue growth at global, regional & country levels and provides an analysis on the industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the water heater market on the basis of product, technology, capacity, application, and region:

• Product Outlook (Revenue, USD Million; 2018 - 2030)

  • Electric

  • Solar

  • Gas

• Technology Outlook (Revenue, USD Million; 2018 - 2030)

  • Tankless

  • Storage

  • Hybrid

• Capacity Outlook (Revenue, USD Million; 2018 - 2030)

  • Below 30 Liters

  • 30 - 100 Liters

  • 100 - 250 Liters

  • 250 - 400 Liters

  • Above 400 Liters

• Application Outlook (Revenue, USD Million; 2018 - 2030)

  • Residential

  • Commercial

  • Industrial

• Regional Outlook (Revenue, USD Million; 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • France

    • Italy

    • UK

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

  • Central & South America

    • Brazil

    • Argentina

  • Middle East & Africa

    • Saudi Arabia

    • UAE