Water Heater Market - Forecast(2024 - 2030)

Water Heater Market size is estimated at $28.5 billion in 2020, projected to grow at a CAGR of 4.8% during the forecast period 2021-2026. Water Heater is an Electric Heater appliance that heats water for a variety of uses. Water heaters are available because of their energy efficiency and small scale. Electric Heater geysers have become very common for home use. Moreover, the Water Heater industry is growing, owing to the rising demand and widespread domestic applications such as hot water for cooking, bathing and cleaning. The Water Heater Market would benefit from rising demand for energy efficient systems and geysers, as well as favorable regulatory policies on carbon emissions. For instance, in 2016, the United Arab Emirates invested $3Million in the area to introduce green strategies. Besides this, the growing number of strategies adopted by key players such as partnership, acquisition and collaboration to expand their presence and innovation in water heating technology to gain the market traction is set to drive its water heater industry.

The report: “Water Heater Market Forecast (2021-2026)”, by Industry ARC, covers an in-depth analysis of the following segments of the Water Heater Market.

By Product Type: Solar Heater, Electric Heater and Solar Heater.

By Technology: Tankless, Hybrid and Storage Heater.

By Application: Residential, Industrial and Commercial.

By Geography: North America (U.S, Canada and Mexico), Europe (Germany, UK, France, Italy, Spain, Russia and Rest of Europe), Asia Pacific (China, Japan India, South Korea, Australia & New Zealand, and Rest of Asia Pacific), South America (Brazil, Argentina and Rest of South America) and RoW (Middle East and Africa).

Based on Product Type, Electric Heater Segment accounted for the largest revenue market share of around 75% in 2020 and is also anticipated to grow with the fastest CAGR. Electric Heater water heaters are becoming more popular as people become more concerned about energy efficiency and have huge growth in the number of pre-plumbed unvented systems in new constructions. To make Electric Heaters easier to use, manufacturers are incorporating smart heating controls. Electric Heaters are widely used in the commercial sector to help with production and for workers comfort. Water heaters are also being replaced more often as a result of energy efficiency laws variance in different countries. As a result, demand for highly efficient tankless Electric water heaters is growing and thus driving the Water Heater Industry. Solar Heater segment is anticipated to grow with the second fastest CAGR of 5.8% in the forecast period 2021-2026, attributed to the rising customer awareness of Solar water heaters and their cost-effective and environmentally friendly benefits in both the residential and commercial sectors. Furthermore, the government's initiatives to promote Solar Heater products in India, as well as increasing product technical advances and rapid urbanization, are expected to drive segment growth.

Based on Application, Commercial accounted for the largest revenue market share in 2020. The demand for water heaters is being driven by the expansion of commercial infrastructure in various countries. Water heaters are used by small to mid-sized businesses in their everyday operations. Companies are adopting highly effective water heaters in the meantime to reduce energy consumption and operating performance. Commercial water heaters must be upgraded owing to increased use. As a result, manufacturers are incorporating new innovations that can serve as a cue for commercial water heater upgrades. Tankless heaters & Electric Heaters are gaining popularity in the commercial sector, owing to their ability to supply a large amount of hot water for an extended period of time driving the Water Heater Industry. Residential is projected to witness the fastest CAGR of 5.3% during the forecast period 2021-2026. Continuous infrastructure growth, combined with an increase in the deployment of energy efficient heating systems, would propel the segment forward. According to the IBEF, India would need over USD 777 billion in infrastructure investment by 2022. The industry will benefit from the ongoing rollout of smart cities with strict building efficiency codes and standards.

Based on Geography, North America Water Heater Market accounted for the 38% revenue share in 2020. More than 9 million water heaters are sold in the United States per year, indicating that there is a strong demand for water heaters in North America, which accounts for a large portion of the industry. Tankless water heaters in the United States are compact, dependable, and long-lasting devices that provide high performance and much better energy efficiency than tank units. Due to the cold weather conditions in the area, demand for heating appliances is extremely high in most North American countries. In July 2017, Rinnai America has announced that it has expanded its North American headquarters by constructing a new two-story headquarters building and opening a North America Innovation and Training Center accelerating water heater expansion across the region. Asia-Pacific is predicted to be the fastest growing region during the forecast period 2021- 2026 owing towards economic growth in countries like China, Japan, Australia and India

By using hot water Storage Heater tanks, Storage Heater water heaters help to maximize heating ability. Manufacturers provide Storage Heater in a range of sizes to meet the needs of customers. Storage Heater are less costly to install than other types of water heaters, and they are also simple to maintain and repair. However, since Storage Heater have been known to burst, vendors are focusing on offering standard water heater services. Furthermore, Storage Heater necessitate space for the tank; as a result, manufacturers are concentrating on reducing the size of Storage Heater to alleviate the space problem driving the Water Heater Industry. 

Rising electricity prices are expected to restrict the growth of the water heater industry. Water heating systems, such as electric heaters, are the second largest consumer of electricity in the home, accounting for 18 percent of total electricity costs, according to the US Department of Energy. Furthermore, an average water heater operates for three hours every day, as per study thereby, hampering the industry development.

The Water Heater Market's main strategies include product launches, mergers and acquisitions, joint ventures, and regional expansion. Water Heater Market top 10 companies are State Industries, Ariston Thermo, Haier Electronics, Fast Water Heater, Neighbourly Company Viessmann, Rinnai, A.O Smith, Rheem Manufacturing, Whirlpool Corporation and American Residential Services.