Solar Water Heater Market to Reach $6.7 Billion by 2027 Driven by Rising Demand for Sustainable Heating Solutions

According to a new report published by Allied Market Research, the global solar water heater market was valued at $4.7 billion in 2019 and is projected to reach $6.7 billion by 2027, growing at a CAGR of 6.1% from 2020 to 2027. The increasing focus on renewable energy adoption, rising energy costs, and growing demand for energy-efficient water heating systems are key factors driving the growth of the solar water heater market globally.

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A solar water heater is an eco-friendly device that captures sunlight and converts it into heat energy to warm water. It uses solar collectors to absorb solar radiation, which is then transferred to a storage tank through a circulating pump. Unlike conventional heating systems that rely on fossil fuels or electricity, solar water heaters significantly reduce energy consumption and operating costs, making them an attractive solution for residential, commercial, and industrial applications.

Growing Demand in Rural and Isolated Areas Accelerating Market Growth

The rising demand for affordable and energy-efficient water heating systems in rural and isolated regions is a major factor fueling the expansion of the solar water heater market. Small-scale solar water heaters are widely adopted in rural areas due to their low installation cost, minimal maintenance requirements, and high efficiency across diverse climatic conditions.

For instance, countries with large rural populations are increasingly adopting solar water heating systems to reduce dependency on conventional energy sources such as natural gas and fossil fuels. In regions with limited access to grid electricity, solar water heaters provide a reliable and sustainable alternative for daily water heating needs. This trend is expected to significantly contribute to the growth of the solar water heater market during the forecast period.

Government Incentives and Energy Schemes Supporting Market Expansion

Substantial government support in the form of rebates, subsidies, and renewable energy schemes is further encouraging the adoption of solar heating technologies. Many governments across the globe are promoting solar-powered appliances to reduce carbon emissions and achieve long-term sustainability goals.

These favorable policies are attracting new consumers and boosting investments in renewable energy infrastructure. In addition, growing awareness regarding environmental conservation and energy savings is motivating households and businesses to install solar water heating systems, thereby strengthening the overall solar water heater market outlook.

Glazed Segment Leads the Solar Water Heater Market by Type

Based on type, the glazed segment emerged as the market leader and is expected to maintain its dominance throughout the forecast period. Glazed solar collectors offer higher absorption efficiency compared to unglazed collectors, which enhances their performance in various climatic conditions.

The superior thermal efficiency and durability of glazed collectors make them suitable for both residential and commercial applications. However, the relatively high cost of glazed collectors may limit their adoption in small-scale or low-budget installations. Despite this limitation, the glazed segment is projected to grow at the highest CAGR of approximately 6.2%, reinforcing its strong position in the solar water heater market.

100 Liter Capacity Segment Gains Strong Traction in Residential Sector

On the basis of capacity, the 100 liter segment accounted for a significant share of the solar water heater market in 2019. This growth is primarily attributed to the increasing demand from the residential sector. A 100 liter solar water heater is considered sufficient for a family of two to three members, making it a cost-effective and practical solution for households.

The affordability and suitability of this capacity segment for small residential buildings have contributed to its widespread adoption. Furthermore, the increasing construction of residential complexes and housing projects is expected to drive the demand for solar water heaters with standard capacity systems in the coming years.

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Residential Segment Dominates Application Landscape

The residential segment accounted for a major share of the solar water heater market, driven by robust investments in the construction sector and the refurbishment of existing buildings. Many newly constructed residential buildings are increasingly integrating rooftop solar collectors connected to water tanks through circulating pumps, enabling efficient water heating with minimal energy consumption.

Moreover, rising electricity tariffs and growing environmental awareness among homeowners are encouraging the installation of solar water heating systems. This shift toward sustainable living solutions is expected to create long-term growth opportunities for the solar water heater market.

Regional Insights: Asia-Pacific Dominates While North America Shows Strong Adoption

Region-wise, the solar water heater market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific dominated the market in 2019, accounting for nearly 55% of the total revenue share. The dominance of this region is attributed to the presence of a large consumer base, rapid urbanization, and strong manufacturing capabilities.

Countries such as China and India have witnessed significant adoption of solar water heaters, particularly in rural and semi-urban areas. The availability of numerous small and medium-scale manufacturers and supportive government initiatives have further accelerated market growth in the Asia-Pacific region.

North America also accounted for a significant market share, owing to favorable government policies promoting solar technologies for residential and commercial applications. Increasing investments in renewable energy infrastructure and rising awareness regarding energy efficiency are expected to drive the demand for solar water heating systems in the region.

Impact of COVID-19 on the Solar Water Heater Market

The COVID-19 pandemic had a limited impact on the solar water heater market compared to conventional electric and gas water heaters. However, the installation of new solar collectors and water tanks experienced delays due to labor shortages and social distancing norms across various countries.

In addition, lockdown restrictions disrupted global supply chains, particularly affecting the export and import of solar components. The high dependency on Chinese exports for solar cells and modules negatively impacted production capacity during the pandemic period. As several manufacturing plants in China operated at limited capacity, the overall production of solar water heaters witnessed a temporary slowdown.

Despite these challenges, the long-term demand for solar water heating solutions remains strong due to increasing environmental concerns and the global transition toward renewable energy sources.

Competitive Landscape and Key Players

The global solar water heater market is highly competitive, with key players focusing on product launches, acquisitions, and business expansion strategies to strengthen their market presence. Major companies profiled in the report include Himin Solar Energy Group, V-Guard Industries Ltd, Ariston Thermo SpA, KODSAN Company, Solav Energy, Zhejiang JiaDeLe Solar Co., Ltd., SunPower Corporation, A.O. Smith, and Alternate Energy Technologies.

These industry participants are investing in advanced solar collector technologies and expanding their distribution networks to cater to the growing demand for sustainable water heating systems.

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Conclusion

In conclusion, the solar water heater market is poised for steady growth, driven by rising demand for energy-efficient heating systems, strong government incentives, and increasing adoption in residential and rural areas. The dominance of glazed collectors, growing preference for 100 liter capacity systems, and expanding construction activities are expected to further propel market growth. Although the COVID-19 pandemic caused temporary supply chain disruptions and project delays, the overall impact remained moderate compared to conventional heating systems. With the global shift toward renewable energy and sustainable living, the solar water heater market is expected to witness consistent expansion and play a vital role in reducing energy consumption and carbon emissions in the coming years.

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