Tankless Water Heater Market Size was estimated at 5.07 (USD Billion) in 2023.The Tankless Water Heater Market Industry is expected to grow from 5.44(USD Billion) in 2024 to 12 (USD Billion) by 2035. The Tankless Water Heater Market CAGR (growth rate) is expected to be around 7.45% during the forecast period (2025 - 2035).
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
A major trend in the Global Tankless Water Heater Market is the increasing move toward energy-efficient solutions as governments and consumers give sustainability a priority. Demand for environmentally friendly goods motivates tankless water heater innovation, which results in better efficiency and lower emissions. This fits with other worldwide projects meant to lower carbon footprints and encourage the use of renewable energy. Moreover, developments in technology have increased the popularity of electric tankless water heaters by providing more convenience and less running expenses. Growing knowledge of energy conservation and higher utility prices driving customers to look for substitutes offering long-term savings are important market factors.
Another motivating element is the adaptability of tankless water heaters, which may be easily incorporated into different business and residential environments. For restorations and new projects worldwide, where space constraints are prevalent, this adaptability makes them an attractive choice. Among the possibilities to investigate is growing into emerging countries, where plumbing infrastructure is becoming better, and demand for contemporary appliances is growing. Manufacturers may take advantage of this by launching reasonably priced versions catered to local demand. The inclusion of smart capabilities into tankless water heaters also offers a path for drawing tech-savvy consumers as digital technology shapes customer decisions more and more.
Trends in recent years reveal a growing emphasis on smart home integration; tankless water heaters are now fitted with Wi-Fi connections to let customers operate and monitor their systems from afar. This indicates a more general movement in the industry toward linked gadgets that improve user efficiency and convenience. Driven by customer tastes and worldwide technology innovation, the tankless water heater sector is changing quickly overall.
Growing Demand for Energy Efficiency
The rising need for energy-efficient goods is driving a notable boom in the Global Tankless Water Heater Market. Environmental issues and the quest for sustainability are motivating governments worldwide to promote energy-saving devices. Nearly 60% of worldwide greenhouse gas emissions come from energy usage, according to the United Nations Framework Convention on Climate Change. This has driven projects such as the Energy Star program in the United States, which encourages people to use energy-efficient equipment.
Consequently, tankless water heaters are becoming more widely used. Based on many industry evaluations, they may provide up to 30% greater efficiency than conventional water heaters, thereby driving significant market expansion.
Technological Advancements and Innovations
Constant technical developments and breakthroughs greatly help the Global Tankless Water Heater Market. To increase the performance and efficiency of tankless water heaters, manufacturers are spending more on Research and Development (R). According to the United States Department of Energy, these developments have produced models that provide hot water on demand without the standby losses related to conventional systems.
When customers are looking for alternatives that provide improved performance and cheaper running expenses, this invention is quite important as it helps propel market growth.
Rising Urbanization and Modernization
As more people relocate to urban areas where contemporary facilities are in demand, urbanization is a key engine for the Global Tankless Water Heater Market Industry. The United Nations estimates that by 2050, about 68% of the world's population will reside in urban areas, up from 55% in 2018. As new buildings increasingly choose space-saving and energy-efficient technologies like tankless water heaters, this demographic change generates a notable need for effective domestic heating solutions.
Modernizing infrastructure in developing countries is also rather important as it opens additional possibilities for manufacturers to serve metropolitan areas.
Growing Consumer Awareness About Sustainable Solutions
Consumers are becoming more conscious of sustainable solutions and items supporting environmental preservation. According to reports, 77% of customers would pay extra for sustainable items, as many polls show. Moreover, the Global Environmental Facility draws attention to the 21% of total greenhouse gas emissions caused by residential energy usage, hence encouraging customers toward tankless water heaters with less environmental effect than conventional choices.
This change in customer behavior offers a major opportunity for the Global Tankless Water Heater Market Industry by providing goods that comply with environmentally friendly practices.
The Global Tankless Water Heater Market is expected to experience substantial growth driven by advancements in technology and increasing consumer demand for energy-efficient water heating solutions. In 2024, the market valuation is projected to reach approximately 5.44 USD Billion, which reflects the rising adoption of tankless water heaters worldwide. Within this market, the technology segment can be identified through three primary categories: Electric, Natural Gas, and Propane. The Electric segment, valued at around 2.0 USD Billion in 2024, is significant due to its convenience and installation flexibility, appealing to both residential and commercial consumers looking for efficient heating solutions.The Natural Gas category occupies a noteworthy position with a valuation of approximately 2.5 USD Billion in 2024, benefiting from its cost-effectiveness and widespread availability, thus becoming a favored choice for various settings. Conversely, the Propane segment, with a valuation of about 0.94 USD Billion in the same year, while smaller, still holds importance especially in rural areas where natural gas services may not be present; this sub-segment is expected to grow as it offers high energy efficiency and lower emissions compared to traditional systems.The overall Global Tankless Water Heater Market is projected to evolve significantly, catering to a diverse range of preferences and applications, which ultimately presents opportunities for innovation and expansion in the sector. As technology continues to improve, the market dynamics indicate a shift in consumer preferences towards sustainable and energy-efficient solutions, with the Electric and Natural Gas segments maintaining a majority holding in terms of market share due to the advantages they offer in terms of efficiency and lower operational costs.Additionally, the steady demand for eco-friendly heating solutions drives competition and technological advancements, setting the stage for a promising growth trajectory in this industry.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
The Global Tankless Water Heater Market exhibits notable segmentation by Fuel Type, encompassing Electricity, Gas, and Renewable Energy, which are crucial for meeting diverse consumer needs. In 2024, the market is projected to reach a valuation of 5.44 billion USD, with trends indicating an increasing shift towards energy-efficient solutions. Gas options typically dominate due to their effectiveness and faster heating capabilities, making them highly favored for residential applications. Electricity is also climbing in popularity, especially with advancements in heating technology that offer improved efficiency and lower operational costs.Furthermore, the renewable energy segment is gaining traction as consumers become more environmentally conscious, aligning with global sustainability goals. The growing focus on reducing carbon footprints and energy costs presents significant opportunities within this segment. Overall, the Global Tankless Water Heater Market data reflects the importance of these fuel types as key drivers of market growth and innovation in the industry, responding to the evolving preferences for sustainable and efficient heating solutions.
The Global Tankless Water Heater Market, particularly in the Installation Type segment, is experiencing significant growth driven by increasing demand for energy-efficient and space-saving solutions. In 2024, the market is expected to be valued at 5.44 USD Billion and is projected to grow due to the rising adoption of tankless systems across various applications. The market segmentation encompasses Indoor, Outdoor, and Point-of-Use installations, each playing a vital role in meeting consumer needs. Indoor installations dominate the landscape as they effectively utilize existing space while providing convenient access to hot water, suitable for residential units.Outdoor installations gain traction in regions with favorable climates, appealing to those seeking reduced indoor energy consumption and enhanced aesthetic appeal in exterior setups. Point-of-Use installations are noteworthy for their efficiency, offering instant hot water directly where it is needed, thereby minimizing water wastage and response time. The growing awareness of energy efficiency, coupled with technological advancements, is likely to propel these segments further, aligning with global initiatives for sustainable living. The future landscape of the Global Tankless Water Heater Market hints at a blend of innovative solutions catering to diverse installation preferences, paving the way for a more environmentally responsible consumer base.
The Global Tankless Water Heater Market is projected to reach a valuation of 5.44 USD Billion in 2024, driven by an increasing demand across various applications including Residential, Commercial, and Industrial sectors. The growth within the residential segment is particularly notable, as homeowners increasingly prioritize energy efficiency and space-saving solutions, making tankless systems a favorable choice. The commercial sector is also leveraging tankless water heaters for their ability to provide continuous hot water, which is essential in restaurants, hotels, and other businesses that require large volumes of hot water.Furthermore, the industrial application benefits significantly from tankless technology, as it ensures high efficiency and reduced energy costs, appealing to sectors aiming for operational sustainability. As the Global Tankless Water Heater Market data suggests, the market shows tremendous growth potential fueled by trends towards energy-efficient appliances, regulatory shifts favoring greener technologies, and consumer awareness regarding water conservation. As the market expands, challenges such as installation costs and scaling issues must be addressed, creating opportunities for innovation and enhanced product offerings in the Global Tankless Water Heater Market industry.The overall market growth reflects a significant shift towards sustainable solutions globally, positioning it as a key area of interest for both manufacturers and consumers.
The Global Tankless Water Heater Market demonstrates a robust presence across various regions, significantly driven by rising energy efficiency awareness and growing consumer preference for on-demand hot water solutions. In this market, North America holds a majority, valued at 2.2 USD Billion in 2024, which is projected to rise to 5.0 USD Billion by 2035, making it a dominant player due to its advanced infrastructure and increasing renovation projects. Europe follows, with a valuation of 1.5 USD Billion in 2024 projected to grow to 3.5 USD Billion by 2035, reflecting a significant market segment focused on eco-friendly technologies.APAC, valued at 1.3 USD Billion in 2024, with an expected growth to 2.8 USD Billion by 2035, benefits from rapid urbanization and rising disposable income, contributing to the demand for efficient heating solutions across densely populated areas. South America, while smaller, holds potential with a valuation of 0.4 USD Billion in 2024, anticipated to grow to 0.9 USD Billion by 2035, as modernization efforts and infrastructural improvements progress. Lastly, the MEA region, though currently the smallest at 0.1 USD Billion in 2024, is projected to expand to 0.3 USD Billion by 2035, as awareness around energy conservation grows, offering future opportunities in the tankless water heater market.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
The Global Tankless Water Heater Market is a dynamic sector characterized by its rapid development and innovative technologies aimed at improving energy efficiency and consumer convenience. As the demand for energy-efficient and space-saving solutions continues to rise globally, numerous players are vying for market share, adopting diverse strategies to enhance their offerings. Key competitive insights reveal that companies are focusing on the integration of advanced features such as smart technology, which allows users to monitor and control their water heating systems remotely. Environmental concerns have also propelled manufacturers to develop products that minimize carbon footprints, thus making sustainability a more central tenet of market competition. Furthermore, regional preferences and regulatory standards significantly influence market dynamics, prompting firms to tailor their products to meet local requirements and consumer expectations, enhancing their competitive edge.Bosch has established a strong presence in the Global Tankless Water Heater Market, building a reputation for the reliability and efficiency of its products. With a diverse range of tankless water heaters that cater to both residential and commercial applications, Bosch has effectively captured the attention of a wide customer base. The company's strengths lie in its commitment to quality and technological advancements, which enable it to offer products that not only perform efficiently but also comply with stringent environmental regulations. Furthermore, Bosch has leveraged its extensive distribution network to ensure that its tankless water heaters are accessible across numerous global markets, thus solidifying its competitive stance. Continuous improvements and the adoption of smart technology in their product line position Bosch strategically to meet emerging consumer demands.Liberator has also made significant inroads in the Global Tankless Water Heater Market, focusing on innovative solutions that address contemporary heating needs. The company's key products include various models of energy-efficient tankless water heaters designed for both home and industrial use. Liberator prides itself on its technological prowess and commitment to sustainability, showcasing products that reduce energy consumption while maintaining high performance. Alongside product innovation, Liberator's market presence has been bolstered by strategic mergers and acquisitions, highlighting its aggressive growth strategy. By integrating complementary brands and technologies, Liberator enhances its product offerings and expands its reach within the global marketplace. The company’s focus on customer-centric solutions and its ability to adapt to changing market conditions further strengthen its position as a key player in the tankless water heater segment.
Tankless Water Heater Market Industry Developments
Significant developments have emerged in the Global Tankless Water Heater Market recently, with increased demand driven by energy efficiency and environmental concerns. Major players such as Bosch, A. O. Smith, and Rinnai are focusing on technological advancements to enhance product performance and customer experience. In March 2023, Bosch launched a new line of eco-friendly tankless water heaters aimed at reducing carbon emissions, highlighting the trend towards sustainability in the sector. Furthermore, the market has seen robust growth in its valuation, with forecasts estimating substantial expansion through 2025, largely attributed to rising consumer awareness regarding energy-efficient heating solutions. In terms of mergers and acquisitions, Takagi completed its acquisition of a smaller competitor in January 2023, aiming to consolidate its market position and accelerate innovation. Additionally, Noritz announced a partnership with Ecosmart in July 2022 to co-develop advanced tankless technologies, reflecting ongoing efforts for collaborative advances in the field. Recent insights indicate that the shift toward smart home integrations will continue to reshape consumer preferences, influencing market dynamics significantly. As the Global Tankless Water Heater Market matures, these developments illustrate a clear trajectory towards enhanced efficiency and technological innovation.
| Report Attribute/Metric Source | Details |
| MARKET SIZE 2023 | 5.07(USD Billion) |
| MARKET SIZE 2024 | 5.44(USD Billion) |
| MARKET SIZE 2035 | 12.0(USD Billion) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) | 7.45% (2025 - 2035) |
| REPORT COVERAGE | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR | 2024 |
| MARKET FORECAST PERIOD | 2025 - 2035 |
| HISTORICAL DATA | 2019 - 2024 |
| MARKET FORECAST UNITS | USD Billion |
| KEY COMPANIES PROFILED | Bosch, Liberator, Takagi, Paloma, Vaillant, Bradford White, Noritz, Stiebel Eltron, GROVE, Rinnai, Sierra, Ecosmart, A. O. Smith, Atmor |
| SEGMENTS COVERED | Technology, Fuel Type, Installation Type, Application, Regional |
| KEY MARKET OPPORTUNITIES | Rising demand for energy efficiency, Increasing adoption in residential applications, Expansion in developing regions, Technological advancements in smart water heaters, Growing environmental awareness among consumers |
| KEY MARKET DYNAMICS | rising energy efficiency awareness, increasing residential construction, technological advancements in heating, government incentives for energy savings, growing demand for space-saving solutions |
| COUNTRIES COVERED | North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Global Tankless Water Heater Market is expected to be valued at 5.44 USD Billion in 2024.
By 2035, the Global Tankless Water Heater Market is expected to reach a valuation of 12.0 USD Billion.
The market is anticipated to grow at a CAGR of 7.45% during the forecast period from 2025 to 2035.
North America is projected to have the largest market share, with an expected valuation of 5.0 USD Billion by 2035.
The Electric Tankless Water Heater segment is expected to be valued at 2.0 USD Billion in 2024 and 4.5 USD Billion in 2035.
The Natural Gas Tankless Water Heater segment is projected to reach a value of 5.5 USD Billion by 2035.
Key players include Bosch, Rinnai, A. O. Smith, and Noritz, among others.
The Propane Tankless Water Heater segment is expected to be valued at 0.94 USD Billion in 2024.
Europe is expected to reach a market size of 3.5 USD Billion by 2035.
Challenges such as installation costs and competition from traditional water heaters may impact market growth.
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Senior Research Analyst I have a bachelor's degree in mechanical engineering and an mba. i have more than two years of expertise in the retail, food, and beverage, chemical, and material industries, and hence have developed a sound cross-domain expertise. a firm believer in lifelong learning and sharing of knowledge. having a proclivity for hatching ideas and trying to absorb as much information as possible in a short amount of time. introducing corporates to the data and insight, which enables them to move from probability to possibility, has been my key areas of interest.Â
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