Tankless Water Heater Market Size, Share, Industry Trend Report, 2025 (Includes Business Impact of COVID-19)

                                          
Industry Insights, Market Size, CAGR, High-Level Analysis: Tankless Water Heater Market


The global tankless water heater market size was valued at USD 2.8 billion in 2018 and expanding at a CAGR of 7.5% over the forecast period. Increasing consumer concerns over sustainable use of energy is a main factor fueling the demand for tankless water heater. For instance, according to Energy.gov, the tankless water heater can be 24% to 34% more energy efficient as compared to the traditional product.

Companies are introducing technologically advanced tankless water heaters, which is expected to increase adoption of these heaters in the upcoming years. For instance, in April 2019, Intellihot Inc., which is a clean technology IoT company and one of the leading manufacturers of commercial tankless water heaters, launched Neuron Series of water heaters. These models are equipped with cellular Wi-Fi connectivity for remote monitoring flow and water temperature.

Moreover, these models are designed for school, restaurants, and hotels and can fit in existing water connections, thereby eliminating re-piping and cutting installation time by half. Additionally, majority of the companies manufacturing these types of heaters have special features available in some of their models. For instance, Stiebel Eltron has a patent on their Advanced Flow Control technology, which automatically decreases flow rate when demand is high.

Rapid increase in adoption of these heaters among residential and commercial sectors as they are capable of saving space and energy is expected to boost the tankless water heater market growth over the forecast period. Moreover, various tankless water heaters are equipped with energy star ratings, which make them eco-friendly and economical for the buyers. Furthermore, these products generally cost more than conventional 40 gallon water heater but usually have longer warranties and they last longer as compared to the traditional hot water heaters. In addition, tankless water heater can save USD 100 - USD 200 electric bill per year.

Product Insights of Tankless Water Heater Market

Electric heaters held a leading market share in 2018 and is anticipated to witness the fastest growth in the coming years. These types of heaters are easy to install and require less installation cost. In addition, electric products usually last long and have low operating cost. Moreover, innovative design of these heaters make them feasible to install in small space and do not require any ventilation as compared to gas counterparts. Furthermore, electric products require fewer or no maintenance, whereas gas products require periodic maintenance by trained professionals. Such factors are expected to promote the utility of electric products as compared to their gas counterparts.

Application Insights of Tankless Water Heater Market

The residential application segment held a leading share of 72.4% in 2018. Increasing adoption of energy efficient and eco-friendly products including tankless water heater is a main factor driving the demand for these products in the residential sector. Additionally, increasing number of residential units as a result of growing middle-class population, especially in emerging economies such as India and China, is expected to promote the adoption of these solutions over the forecast period.

Moreover, improving standard of living, coupled with shifting consumer preference towards energy efficient products including tankless water heater, is projected to remain a favorable factor for the industry growth. In addition, introduction of innovative products is expected to open new avenues. For instance, Rheems Prestige models have EcoNet Smart Technology that provides Wi-Fi connectivity and add-on features, which offer system protection, control, and monetary savings.

The commercial application segment is anticipated to expand at the fastest CAGR of 7.8% from 2019 to 2025. Increasing product visibility of innovative products is expected to a key factor driving the demand for tankless water heater over the forecast period. For instance, Intellihots tankless water heater provides continuous hot water when needed, thereby eliminating energy wastage and environmental impact as well as cutting down greenhouse emissions by over 40%.

Moreover, the tankless system comes with two years of 24/7 remote monitoring with serviceable parts shipped onsite proactively, thereby fueling the adoption of these systems in the commercial sector. Increasing number of commercial building owing to growing tourism industry, coupled with surging demand of hot water across restaurants, hotels, and resorts, will fuel the demand for tankless water heater. Increasing awareness and stringent government regulations on the adoption of energy efficient and eco-friendly water heaters across government buildings and hospitals, thereby fueling demand over the forecast period.

Regional Insights of Tankless Water Heater Market

Europe held a leading market share in 2018 owing to higher production adoption and shifting consumer preference for energy efficient and economical products. Moreover, surging demand from the commercial sector including restaurants, hotels, and hospitals is expected to have a positive impact on the market growth. In addition, increasing adoption of tankless water heater in countries such as Switzerland, Germany, and U.K, thereby propelling demand in the region.

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 key factor driving demand for tankless water heater over the forecast period. Moreover, presence of prominent players in the region is expected to propel demand for tankless water heater in the upcoming years.

Market Share Insights of Tankless Water Heater Market

The global market is highly competitive in nature. The market is identified by several strategic activities such as expansions, mergers and acquisitions, and product innovations, attempted by key manufacturers in the industry. For instance, Rinnai, one of the leading players in the market, offers Amazons Alexa integration with its products, which allows users to ask Alexa to start circulation, thereby allowing tankless water heater to spring into action.

Moreover, its products are integrated with Google Home, thereby allowing users to monitor their tankless systems temperature and recirculation. Some of the prominent manufacturing firms 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.

Segmentations, Sub Segmentations, CAGR, & High-Level Analysis overview of Tankless Water Heater Market Research Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, this market research report has segmented the global tankless water heater market report on the basis of product, application, and region:

Product Outlook (Revenue, USD Million, 2019 - 2030)

  
Electric
  
Gas

Application Outlook (Revenue, USD Million, 2019 - 2030)

  
Residential
  
Commercial