Press release
Canada Electric Water Heater Market to Expand at a CAGR of 5.9% by 2032
Canada Electric Water Heater Market
The report provides market value for the base year 2024 and a yearly forecast till 2032 in terms of revenue (USD Million) and volume in (Units). The market for each segment has been provided on a regional basis for the above-mentioned forecast period.
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Market Size & Insights
The Canada electric water heater market garnered a revenue of USD 1,298.88 million in the year 2024 globally and is forecast to yield USD 2039.8 million by the year 2032 at a CAGR of 5.9% over the forecast period from 2025 to 2032. Also in terms of volume the market was estimated as 1,501,388 Units in 2024.
The market for electric water heaters in Canada continues to gain momentum due to evolving energy standards, sustainability mandates, and rising consumer awareness of operational efficiency. While electric water heaters have historically been more prominent in regions without extensive natural gas pipelines, recent technological improvements - such as higher energy factors, thermal storage, and smart grid compatibility - have widened their adoption scope. Replacement cycles across older single- and multi-family homes are contributing significantly to market expansion, especially in provinces seeing rapid housing development.
Additionally, commercial properties including hotels, educational facilities, health clinics, and multifamily rental complexes are increasingly deploying high-capacity electric units to lower operational emissions and achieve compliance targets. A growing number of manufacturers are integrating digital performance diagnostics, leak-detection sensors, and remote thermostatic controls into product designs, enhancing reliability and maintenance cycles. As consumer expectations evolve, feature-rich systems are gaining preference over low-end traditional tank models.
Heat pump electric water heaters are emerging as the fastest-growing category, boasting high efficiency and reduced power consumption. The Canadian government's continued focus on decarbonization is projected to increasingly incentivize these products, strengthening the long-term outlook. Overall, the market is expected to remain dynamic through 2033, supported by a combination of regulatory initiatives, innovation, and housing-driven demand.
Canada Electric Water Heater Segment Analysis
By Product Type:
In 2024, the tankless electric water heater segment generated a revenue of USD 964.68 million with 1,269,313 units in volume, reflecting strong adoption due to benefits such as energy efficiency, space-saving designs, and lower standby heat loss. This segment is growing at a healthy CAGR of 6.04%, supported by increasing consumer preference for on-demand hot water systems and government incentives for energy-efficient appliances. Storage tank heaters accounted for 18.12% of the total revenue in 2024, maintaining relevance owing to wide availability, low installation cost, and suitability for multi-point usage. Meanwhile, hybrid electric water heaters are projected to expand at a notable CAGR of 7.55%, driven by heightened demand for high-efficiency, environmentally conscious solutions that reduce operational costs.
By Capacity:
The 40-gallon capacity segment generated USD 373.04 million in 2024, indicating high adoption within average-sized Canadian households, where balanced capacity and cost-efficiency remain key purchasing criteria. The 50-gallon segment is expected to experience strong growth with a CAGR of 7.51%, supported by rising consumption needs in larger households and commercial retrofits, along with improvements in energy efficiency and storage optimization.
By Application:
The residential segment dominated the market in 2024, generating USD 1,057.94 million, underpinned by ongoing housing developments, replacement demand, and rising consumer awareness of energy savings. Conversely, the commercial segment is anticipated to grow at a robust CAGR of 6.87%, influenced by expansion in hospitality, healthcare, and institutional infrastructure where continuous access to hot water is critical.
By Distribution Channel:
The online distribution channel is forecast to grow at the highest rate, with a CAGR of 7.92%, as digital retail adoption accelerates. Competitive pricing, broader product availability, transparent reviews, and convenient delivery options are boosting consumer confidence in e-commerce platforms when purchasing major appliances.
Important Points
• Replacement of aging electric water heaters is creating a recurring demand cycle across key residential markets.
• Heat pump-based electric water heaters are gaining traction due to exceptional energy-saving performance.
• Smart connectivity features are allowing remote troubleshooting, predictive maintenance, and safety monitoring.
• Sustainability programs are pushing consumers toward low-carbon water heating solutions.
• Rising construction of rental apartments and condominium units supports demand for compact, tank-type electric heaters.
• Improved insulation foams and digital thermostats are lowering standby heat losses and boosting efficiency.
Key Factors Driving the Future Growth of the Canada Electric Water Heater Market
• Decarbonization push: Regulatory frameworks are encouraging a transition away from fossil-fuel-based heating.
• Urban residential expansion: Rapid growth of multifamily housing directly increases installation rates for electric water heaters.
• Advances in smart appliances: IoT-enabled controls make electric systems more attractive for tech-savvy buyers.
• Utility-led incentive programs: Rebates are improving affordability and accelerating upgrades.
• High-efficiency standards: Consumers are increasingly aware of operating cost savings over the lifecycle.
• Flexible installation: Electric models require fewer venting modifications, reducing installation costs in dense housing environments.
Top 10 Market Companies
• Rheem Canada
• Rinnai Canada
• O. Smith Corporation
• Bradford White Corporation
• Vaughn Thermal Corporation
• Whirlpool Canada
• Bosch Thermotechnology
• Stiebel Eltron
• EcoSmart
• Haier
Market Segments
By Product Type:
• Tankless
• Storage Tank
• Hybrid
By Capacity:
• < 30 Gallons
• 30 Gallons
• 40 Gallons
• 50 Gallons
• 60-75 Gallons
• > 75 Gallons
By Application:
• Residential
• Commercial
• Industrial
By Distribution Channel:
• Online
• Offline
Recent Developments
• Manufacturers have introduced smart electric heaters with wireless leak-notification systems to enhance residential safety.
• Heat pump units are experiencing increased investment due to government-backed energy-saving policies.
• OEMs have expanded modular commercial heater offerings for large apartment buildings and hospitality spaces.
• Digital monitoring platforms are improving maintenance efficiency with predictive analytics.
• Several brands are focusing on high-insulation storage tanks to minimize heat loss in colder climates.
• Partnerships between appliance manufacturers and utility providers aim to bundle energy-efficiency incentives for homeowners.
Regional Insights
Demand for electric water heaters in Canada varies based on infrastructure, climate conditions, and provincial energy initiatives. Atlantic provinces and coastal territories with limited natural gas accessibility continue to rely heavily on electric systems, fostering consistent demand. Ontario and British Columbia are witnessing growth, fueled by condominium developments and high-rise construction. In colder northern territories, electric heaters designed for rapid recovery and high-efficiency insulation perform well, offering cost-effective heating solutions. Overall, regions prioritizing carbon neutrality are increasingly adopting electric solutions, especially in modern building projects and retrofit initiatives.
Market Outlook
The Canada electric water heater market is anticipated to remain on a strong upward trajectory through 2033. Sustainability remains a key differentiating factor, with electric and heat pump systems expected to displace older fossil-fuel-based appliances. As smart home penetration increases, integrations such as remote diagnostics, energy-consumption reporting, and customizable scheduling will further boost product desirability. Manufacturers investing in R&D to enhance thermal storage capacity, insulation methods, and overall efficiency will be better positioned to capture market share.
Commercial adoption is set to rise as building operators aim to minimize operational carbon footprints and comply with evolving environmental codes. Moreover, increasing municipal by-laws limiting the installation of new gas infrastructure in urban areas will push developers toward electric solutions. The rise of energy-efficient rebates and zero-interest upgrade financing is also influencing consumer behavior, particularly in retrofit markets.
Looking ahead, electric water heaters are expected to play a central role in Canada's electrification strategy, supported by renewable-energy grid integrations and advanced appliance interoperability. As competition intensifies, value-added services such as extended warranties, subscription-based maintenance, and performance monitoring are likely to become key differentiators. With favorable policy, technological advancements, and shifting consumer attitudes, the market outlook through 2033 remains robust, resilient, and innovation-driven.
Contact:
Ajay N
Ph: +1-970-633-3460
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DataHorizzon is a market research and advisory company that assists organizations across the globe in formulating growth strategies for changing business dynamics. Its offerings include consulting services across enterprises and business insights to make actionable decisions. DHR's comprehensive research methodology for predicting long-term and sustainable trends in the market facilitates complex decisions for organizations.
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