Tankless Water Heater Market Set to Reach US$ 7.38 Bn by 2032, Expanding at 6.3% CAGR

The global market for tankless water heaters is witnessing robust growth, with the market size projected to expand from approximately US $ 4 billion in 2022 to about US $ 7.38 billion by the end of 2032, registering a compound annual growth rate (CAGR) of 6.3 % over the forecast period.

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Key Growth Drivers

Energy efficiency and sustainability demands: Rising awareness about energy conservation and environmental sustainability is driving the demand for tankless water heaters. Unlike traditional water heaters, tankless models heat water on demand, reducing energy wastage and offering long-term cost savings.

Residential segment dominance: The residential sector remains the largest consumer of tankless water heaters, accounting for over 70 % of the market share. Growing disposable income levels, urbanization, and modernization of housing infrastructure are further boosting adoption in this segment.

Technological advancements: The growing popularity of condensing-type tankless water heaters-known for higher thermal efficiency-is shaping market trends. At the same time, electric tankless heaters are gaining traction in regions with limited gas infrastructure, offering convenience and ease of installation.

Commercial expansion: Businesses in hospitality, healthcare, and foodservice sectors are increasingly replacing conventional storage systems with tankless models to save space and improve operational efficiency.

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Regional Trends & Opportunities

• North America: The U.S. is a key market, with strong adoption of energy-efficient and smart-connected tankless systems.
• Europe: The U.K. and Germany are focusing on green building codes and energy efficiency, supporting market expansion.
• Asia-Pacific: Rapid urbanization, expanding middle-class populations, and government incentives for energy-efficient appliances are fueling demand in countries like China, India, and Japan.
• Emerging markets: Growing awareness and infrastructure development are creating opportunities for electric tankless systems in Latin America and Africa.

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Segmentation of Tankless Water Heater Industry Research

Tankless Water Heater Market by Technology Type:
• Condensing Tankless Water Heaters
• Non-Condensing Tankless Water Heaters
Tankless Water Heater Market by Energy Factor:
• 0 to 0.79 EF
• 0.80 to 0.89 EF
• 0.90 EF and Above
Tankless Water Heater Market by Energy Source:
• Electric Tankless Water Heaters
• Gas Tankless Water Heaters
Tankless Water Heater Market by Application:
• Indoor Tankless Water Heaters
• Outdoor Tankless Water Heaters
Tankless Water Heater Market by End User:
• Residential Tankless Water Heaters
• Commercial Tankless Water Heaters
Tankless Water Heater Market by Sales Channel:
• Hypermarkets/ Supermarkets
• Specialty Stores
• Consumer Electronic Stores
• Online Retailers
• Direct Sales
• Other Sales Channels
Tankless Water Heater Market by Region:
• North America Tankless Water Heater Market
• Latin America Tankless Water Heater Market
• Europe Tankless Water Heater Market
• East Asia Tankless Water Heater Market
• South Asia Tankless Water Heater Market
• Oceania Tankless Water Heater Market
• MEA Tankless Water Heater Market

Competitive Landscape

Leading manufacturers such as Rinnai Corporation, A. O. Smith Corporation, and Robert Bosch GmbH dominate the market through continuous innovation and expansion of product portfolios. Companies are focusing on:
• Developing smart water heating systems integrated with IoT and home automation technologies.
• Strengthening online sales channels to reach tech-savvy consumers.
• Forming strategic partnerships and acquisitions to expand global reach and technical capabilities.

Companies Covered in Tankless Water Heater Market

• A. O. Smith Corp.
• Ariston Thermo Spa
• Bradford White Corporation
• Haier Smart Home Co Ltd.
• NORITZ Corp.
• Rheem Manufacturing Co.
• Rinnai Corporation
• Robert Bosch GmbH
• Bradford White Corporation
• Bajaj Electricals Ltd.
• Kyungdong Navien Co. Ltd.
• Whirlpool Corporation
• Atmor
• Hubbell Electric Heater Company
• Stiebel Eltron Inc.
• EcoSmart Green Energy Products, Inc.
• Others (As per request)

Challenges

Despite strong prospects, the market faces several challenges:

• High initial cost compared to conventional water heaters.
• Installation complexity in regions with limited electricity or gas networks.
• Limited awareness in developing economies regarding long-term energy and cost benefits.
Outlook & Future Opportunities
With the market projected to reach US $ 7.38 billion by 2032, stakeholders should focus on:
• Innovation and affordability: Developing cost-effective, compact, and energy-efficient models for wider consumer adoption.
• Regional customization: Offering both electric and gas variants suited to local infrastructure conditions.
• Digital transformation: Strengthening e-commerce channels and online marketing efforts.
• After-sales service: Building strong maintenance and support systems to improve consumer trust and satisfaction.

Conclusion

The global Tankless Water Heater Market is poised for steady growth, driven by the rising demand for energy efficiency, modern home upgrades, and sustainability goals. With a CAGR of 6.3 % from 2022 to 2032, the industry presents vast opportunities for manufacturers and investors alike. Innovation, consumer education, and smart technology integration will remain at the forefront of future market expansion.

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