Tankless Electric Water Heater Market was valued at USD 6.5 Billion in 2022 and is projected to reach USD 10.5 Billion by 2030, growing at a CAGR of 7.0% from 2024 to 2030.
The global tankless electric water heater market is experiencing significant growth driven by technological advancements rising energy efficiency demands and increasing awareness of environmental sustainability. In 2023 the global market value was estimated at USD 5.6 billion and is projected to expand at a compound annual growth rate CAGR of approximately 8% from 2023 to 2030. By 2030 the market size is expected to surpass USD 11 billion.
The shift towards energy efficient solutions is one of the key drivers behind the market's expansion. As consumers and businesses look for ways to reduce energy consumption and lower utility bills tankless electric water heaters—known for their ability to heat water on demand without the need for a storage tank—offer a compelling alternative to traditional water heating systems. Furthermore the increasing global focus on reducing carbon emissions and reliance on fossil fuels has accelerated the demand for electric powered water heaters as an environmentally friendly option.
Technological advancements such as smart technology integration improved heating elements and better energy efficiency are expected to play a crucial role in shaping the future landscape of the tankless electric water heater market. The increasing trend toward digitalization particularly in residential and commercial applications is expected to enhance the overall user experience with features such as app controlled temperature adjustments and real time energy consumption monitoring.
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The tankless electric water heater market is being driven by several key factors:
Energy Efficiency: Tankless electric water heaters are more energy efficient than traditional water heaters. They only heat water when needed avoiding standby heat loss which is a significant cost saving advantage in both residential and commercial spaces.
Environmental Benefits: As countries focus on achieving carbon neutrality and minimizing environmental impact electric water heaters—being free from reliance on fossil fuels—offer a more sustainable solution compared to gas powered alternatives.
Consumer Awareness: Rising consumer awareness regarding the benefits of tankless systems such as their space saving design long term cost effectiveness and environmental benefits is contributing to growing market demand.
Technological Advancements: Innovation in product design integration with smart home technologies and enhanced durability are expected to propel market growth. New models with higher power ratings and faster heating capabilities are gaining popularity.
Despite its growth potential the tankless electric water heater market faces several challenges:
High Initial Cost: Tankless electric water heaters typically come with a higher upfront cost compared to traditional water heaters which can deter some consumers from making the switch.
Limited Availability in Remote Regions: In certain rural or remote areas the installation of electric water heaters may be difficult due to insufficient electricity supply or grid connectivity.
Inadequate Awareness in Developing Markets: While developed economies are embracing tankless technology awareness in developing regions remains low which could limit market penetration in these areas.
Several opportunities exist for market players to capitalize on:
Emerging Markets: Countries in Asia Pacific Latin America and Africa are expected to witness significant growth due to rising urbanization increased infrastructure development and a growing middle class that is willing to invest in energy efficient products.
Smart Water Heaters: The growing trend of smart homes offers a unique opportunity for tankless water heaters integrated with IoT Internet of Things technologies. These smart systems enable users to monitor and control water temperature remotely via mobile apps offering enhanced convenience and energy management.
Government Incentives: Several governments are offering incentives and rebates for consumers who install energy efficient water heating systems which could further drive demand for tankless electric water heaters.
Technological advancements play a crucial role in shaping the tankless electric water heater market. The integration of advanced heating elements better insulation and smart technology has significantly improved the product's energy efficiency and performance. Moreover the introduction of Wi Fi enabled features energy consumption tracking and automatic temperature regulation are becoming increasingly common in tankless models.
Regulatory standards also play a pivotal role in driving innovation and product development. Stricter building codes and energy efficiency standards in various regions are encouraging manufacturers to develop more sustainable and energy efficient products. For example the U.S. Department of Energy DOE enforces energy standards that encourage manufacturers to produce water heaters with higher energy efficiency ratings.
The tankless electric water heater market can be segmented based on application including:
Residential: In residential settings tankless electric water heaters are commonly used for heating water for showers baths and kitchen needs. The growing trend toward smaller more energy efficient homes drives demand in this segment.
Commercial: Commercial establishments such as hotels restaurants hospitals and offices use tankless electric water heaters for consistent hot water supply. These applications often require more powerful units capable of handling higher demand.
Industrial: In industrial settings tankless electric water heaters are used for a range of applications including manufacturing processes that require a steady supply of hot water. This segment is witnessing increasing adoption in industries like food processing pharmaceuticals and textiles.
The market can also be segmented by end users:
Residential Users: Homeowners looking for space saving energy efficient water heating solutions dominate this segment. The adoption of smart water heaters in homes is growing as consumers become more environmentally conscious.
Commercial Users: Businesses in sectors such as hospitality healthcare and retail are increasingly investing in tankless water heaters due to their efficiency and lower operating costs compared to traditional models.
Industrial Users: Industries requiring high volume hot water applications such as manufacturing plants are turning to tankless water heaters as part of their sustainability initiatives and to optimize energy use.
The tankless electric water heater market is geographically diverse with the following regions being key contributors:
North America: The North American market is the largest for tankless electric water heaters driven by high energy costs consumer awareness and favorable government incentives.
Europe: In Europe stringent energy efficiency standards and the adoption of green building initiatives are fueling growth in the market.
Asia Pacific: The Asia Pacific region is expected to witness the highest growth rate due to rapid urbanization increasing disposable income and rising demand for sustainable home appliances.
Latin America & Africa: These regions are seeing a steady increase in demand especially in urban areas where water heating needs are becoming more sophisticated.
Several prominent players dominate the tankless electric water heater market. Some of the leading companies include:
Rheem Manufacturing Company: Known for its comprehensive range of tankless water heaters Rheem is a market leader in both residential and commercial sectors. Their commitment to energy efficiency and advanced technologies has strengthened their market presence.
Stiebel Eltron: A key player in Europe and North America Stiebel Eltron specializes in high quality tankless water heaters with advanced features like remote temperature control and energy saving technology.
EcoSmart: EcoSmart is an innovator in the market offering energy efficient electric water heaters that are designed for both residential and commercial applications. Their units are compact easy to install and feature smart technology integration.
Bosch Thermotechnology: Bosch’s tankless water heaters are popular for their compact size efficient performance and reliability. The company focuses heavily on R&D to enhance product features and sustainability.
Noritz: A major player in the North American and Asian markets Noritz offers tankless electric water heaters that combine high performance with energy saving benefits. They also focus on eco friendly product development.
The tankless electric water heater market is witnessing several key trends and innovations:
Smart Technology: The integration of smart technology in tankless electric water heaters is a significant trend. Consumers are increasingly looking for devices that can be controlled remotely via smartphones allowing for greater convenience and energy savings.
Hybrid Systems: Hybrid tankless water heaters which combine both tankless and traditional water heating technology are gaining traction. These systems are designed to optimize energy use while ensuring a constant hot water supply.
Energy Storage Integration: Some manufacturers
Stiebel Eltron
Rheem
Bosch
Bradford White Corporation
Eemax
Hubbell
Atmor
Eccotemp Systems
Drakken
Midea Group
Stiebel Eltron
By the year 2030, the scale for growth in the market research industry is reported to be above 120 billion which further indicates its projected compound annual growth rate (CAGR), of more than 5.8% from 2023 to 2030. There have also been disruptions in the industry due to advancements in machine learning, artificial intelligence and data analytics There is predictive analysis and real time information about consumers which such technologies provide to the companies enabling them to make better and precise decisions. The Asia-Pacific region is expected to be a key driver of growth, accounting for more than 35% of total revenue growth. In addition, new innovative techniques such as mobile surveys, social listening, and online panels, which emphasize speed, precision, and customization, are also transforming this particular sector.
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Growing demand for below applications around the world has had a direct impact on the growth of the Global Tankless Electric Water Heater Market
Residential
Commercial
Based on Types the Market is categorized into Below types that held the largest Tankless Electric Water Heater market share In 2023.
Whole-House
Point-of-Use
Global (United States, Global and Mexico)
Europe (Germany, UK, France, Italy, Russia, Turkey, etc.)
Asia-Pacific (China, Japan, Korea, India, Australia, Indonesia, Thailand, Philippines, Malaysia and Vietnam)
South America (Brazil, Argentina, Columbia, etc.)
Middle East and Africa (Saudi Arabia, UAE, Egypt, Nigeria and South Africa)
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1. Introduction of the Global Tankless Electric Water Heater Market
Overview of the Market
Scope of Report
Assumptions
2. Executive Summary
3. Research Methodology of Verified Market Reports
Data Mining
Validation
Primary Interviews
List of Data Sources
4. Global Tankless Electric Water Heater Market Outlook
Overview
Market Dynamics
Drivers
Restraints
Opportunities
Porters Five Force Model
Value Chain Analysis
5. Global Tankless Electric Water Heater Market, By Type
6. Global Tankless Electric Water Heater Market, By Application
7. Global Tankless Electric Water Heater Market, By Geography
Global
Europe
Asia Pacific
Rest of the World
8. Global Tankless Electric Water Heater Market Competitive Landscape
Overview
Company Market Ranking
Key Development Strategies
9. Company Profiles
10. Appendix
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