The global market for water heaters is significantly growing and evolving owing to the rising demand for hot water for residential applications such as bathing, washing, and cooking. In addition to residential water heaters, the need for hot water in sectors including hospitality, healthcare, and food service is driving market expansion for commercial water heaters. Global Water Heater Market size was valued at USD 25.29 billion in 2022 which is expected to reach USD 35.92 billion in 2030.  Additionally, the market is expected to grow at a CAGR of 4.48% for the forecast period between 2023 and 2030 due to factors including rising need for energy-efficient water heaters and emerging advanced technologies that have benefitted the expansion of the water heater market on a global level.

Furthermore, an increase in the number of residences, hotels, hospitals, and other buildings, as well as population growth and better infrastructure in rural regions, are some of the reasons that are fueling the growth of the worldwide water heater market.  Also, in order to cut down on energy use and carbon emissions, several nations have enacted energy efficiency requirements and guidelines for equipment, including water heaters. Regions with a strong emphasis on energy efficiency and sustainability, such as Scandinavia, Germany, and certain states in the U.S. like California, have witnessed a growing demand for high-efficiency water heaters. Consumers in these areas prioritize eco-friendly options and often seek out water heaters that meet stringent energy efficiency standards, such as Energy Star certification. However, the expansion of the worldwide water heater market is anticipated to be hampered by rising power prices, high operating expenses, and technical problems related to water heaters.

Integration of Smart and Advanced Technology

The global water heater market is expanding because of technical improvements which provide customers with more convenience, and energy-efficiency alternatives. The integration of smart technology in water heaters is gaining momentum. Manufacturers are incorporating features such as Wi-Fi connectivity, mobile app controls, and smart home integration into their water heater models. In the upcoming years, manufacturers are expected to continue to thrive if they make investments in R&D to enhance their products and integrate them with cutting-edge technology.

For instance, Noritz specializes in producing a range of high-quality yet affordable tankless water heaters that represent great value for money. The company focuses on providing efficient and effective products to its customers. Its latest models are also compatible with the Noritz Wi-Fi Adapter, which can send data readouts directly to the customer’s smartphone and is marketed as the only such device that can be mounted both indoors and outside.

Increased Application in Commercial Settings

The demand for water heaters in the commercial industry is predicted to rise exponentially due to increasing government expenditure on the development of tourism and healthcare facilities, which would in turn considerably boost the number of water heater installations. Increased consumption of hot water in hospitals, hotels, spas, salons, restaurants and laundry setups drives the market growth. Moreover, the market is also predicted to expand because of the growing popularity of tankless systems in commercial settings. The total number of hotels worldwide is more than 7,00,000 and growing even higher with new inventory plans by international hospitality groups including Accor, IHG and Marriott. In December 2022, Marriott International Inc. announced its plan to introduce 35 new luxury hotels across the globe in 2023. Saudi Arabia is planning to increase the number of cafes from 258 per million of population to 1000 cafes as part of its Vision 2030 program. Booming real estate sector in India where the developers are going providing fully furnished units and growing number of washrooms and restrooms in residential spaces are leading to a higher demand for water heaters.

Government Regulations

Government regulations often focus on energy efficiency, safety standards, and environmental considerations. Labels or certifications, such as the CE mark in Europe, indicate that the product meets specific criteria and can help consumers make informed purchasing decisions. Furthermore, In India, Energy Efficiency and Renewable Energy Management Centre of Delhi introduced a Rs 6,000 rebate on the purchase of solar water heaters (SWH) for domestic consumers. SWHs cost roughly Rs 18,000 but save money in the long term because they do not require power. Moreover, the United States Department of Energy (DOE) has established energy efficiency standards for different types of water heaters. These standards are aimed at promoting the use of more efficient water heating technologies and reducing energy consumption. For storage tank water heaters, the DOE has set Energy Factor (EF) standards.

Rising Popularity of Tankless Water Heaters

Tankless water heaters have gained traction due to their energy efficiency and continuous hot water supply. With cost savings, space-saving design, and longer lifespans, many people are opting for environmentally friendly units. The majority of tankless water heaters have a lifespan of more than 20 years. They also contain easily replaceable parts, which allow them to last for many more years. Storage water heaters, on the other hand, have a lifespan of 10-15 years. According to the U.S. Department of Energy, tankless water heaters can be up to 24-34% more energy-efficient than storage tank models, leading to lower utility bills and reduced environmental impact. Whereas, in developing countries such as India, tankless water heater penetration is currently quite low. Acceptance and uptake will rise when the accompanying advantages reach end users. Growth over the next year is expected to be spectacular (51.7%), owing to low penetration and huge market size.

Increasing Demand for Solar Water Heaters in Sunbelt Regions

Sunbelt regions with ample sunshine, such as Southern U.S. states, parts of Europe, and Australia, have seen a rise in the adoption of solar water heaters. These systems utilize solar thermal collectors to harness solar energy for heating water. The availability of abundant sunlight makes solar water heaters a viable and eco-friendly option in these regions. Many companies offer solar water heaters to sunbelt regions. Rheem is a global manufacturer that offers a wide range of solar water heaters. Their products include both solar thermal collectors and complete solar water heating systems. Rheem provides solutions for residential, commercial, and industrial applications in various countries.

Impact of COVID-19

The COVID-19 outbreak had a conflicting effect on the global water heater market. The market was positively impacted by the rising demand for residential water heaters as per the stay-at-home orders and remote work. Moreover, the growth of water heaters is influenced by increased usage of water for showering and cleaning to prevent the spread of the virus.  On the other hand, market expansion has been limited due to supply chain disruptions and diminished production capacity. Supply chain of main components used in manufacturing of water heaters like stainless steel and other casing components took an impact due to lockdown restriction which impacted overall market development.

Furthermore, reduced demand from the commercial sector as many commercial setups including hotels, restaurants, and offices were either closed or were operating at reduced capacity. Hence, Covid-19 had a considerable impact on Global Water Heater Market, nevertheless the market showed dramatic recovery as restrictions were lifted during the fall of 2020.

Impact of Russia-Ukraine War

The conflict between Russia and Ukraine has a variety of effects on the global water heater market. Russia provides a significant amount of the raw materials which is required to make water heaters, including steel and copper. Interruptions in the flow of these supplies from Russia to other nations have resulted in a scarcity of such raw resources and a rise in their cost, thereby limiting the supply and market expansion of water heaters.

Report Scope

Global Water Heater Market Assessment, Opportunities and Forecast, 2016-2030F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative & quantitative assessment of the current state of the Water Heater market globally, industry dynamics and challenges. The report includes market size, segmental shares, growth trends, COVID-19 and Russia-Ukraine war impact, opportunities and forecast between 2023 and 2030. Additionally, the report profiles the leading players in the industry mentioning their respective market share, business model, competitive intelligence, etc.

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