The global tankless water heater market size is anticipated to reach USD 4.6 billion by 2025, according to a new report by Grand View Research, Inc., expanding at a CAGR of 7.5% over the forecast period. Launch of innovative products with improved design is a main factor driving demand for tankless water heater over the forecast period. For instance, in 2019, companies including Rinnai and Raheem have launched energy efficient water heaters for the residential sector. Their products are equipped with Wi-Fi and voice recognition, which allow the users to remotely monitor temperature and water circulation when required through smartphone.
Electric products held a leading market share in 2018 and is anticipated to witness the fastest growth in the coming years. Rapid increase in adoption of these heaters among the residential and commercial sectors is expected to boost market growth over the forecast period. Many homeowners are increasingly adopting electric tankless water heaters due to their energy efficiency and low maintenance and operating costs associated with them. In addition, these products are generally less expensive and have longer warranties as compared to gas counterparts.
The residential application segment held a leading share of 72.4% in 2018. Shifting consumer inclination towards energy efficient and eco-friendly products is a main factor driving the demand for these products in the residential sector. Moreover, increasing adoption of smart products and growing urbanization are expected to have a positive impact on the market growth in the upcoming years. For instance, Rheem’s Prestige models have EcoNet Smart Technology that provides Wi-Fi connectivity and added features, which offer system protection, control, and monetary savings. Furthermore, improving standard of living, coupled with introduction of innovative products, is expected to have a positive impact on market growth.
The commercial application segment is anticipated to expand at the fastest CAGR of 7.8% from 2019 to 2025. Introduction of innovative products is a main factor driving the demand for tankless water heater. Increasing number of commercial buildings including restaurants, hotels, and hospitals owing to growing tourism industry will fuel demand for hot water, which, in turn, is expected to increase adoption of the product.
Europe held a leading market share in 2018 owing to high production of these products and shifting consumer preference for energy efficient and economical products. North America is anticipated to expand at the fastest CAGR of 10.7% from 2019 to 2025. Growing awareness related to ecological products, coupled with increasing product visibility, is a main factor driving the market demand. Moreover, presence of prominent players in the region such as A. O. Smith and Rheem is expected to propel demand for tankless water heater in the upcoming years.
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Further key findings from the report suggest:
- North America for tankless water heater market is anticipated to expand at the fastest CAGR of 10.7% from 2019 to 2025 due to shifting consumer preference towards ecological products including tankless water heater
- Europe is expected to reach USD 1.5 billion by 2025 due to surging number of residential buildings, especially in Germany, U.K, and France, thus promoting sales of tankless water heater in the region
- Asia Pacific is anticipated to expand at a CAGR of 7.9% from 2019 to 2025 owing to high product availability, especially in Japan and China
- In 2018, U.S. held a significant share in the North America market on account of rising popularity of electric tankless water heaters among buyers in the residential sector
- Some of the key manufacturers are A. O. Smith; Rheem Manufacturing Company; Rinnai Corporation; Bradford White Corporation; Robert Bosch LLC; EcoSmart Green Energy Products, Inc.; Stiebel Eltron Inc.; Takagi; Noritz America; and Navien Inc.