TANKLESS WATER HEATER MARKET ANALYSIS

Tankless water heater, also referred to as demand-type water heaters are instant water heaters that provide hot water instantly or on-demand. These water heaters can be installed in a closet or on exterior walls and can give an endless source of hot water, while saving money on energy by heating or reheating the same tank. Tankless water heater are widely used across residential as well as commercial spaces. Tankless water heater are highly durable and can last for many years. Moreover, they lower the energy bills by up to saving 40% energy as these heaters are highly efficient.

Global tankless water heater market was valued at US$ 21.66 Billion in 2021 in terms of revenue, exhibiting a CAGR of 5.4% during the forecast period (2022 to 2030).

Drivers

Rising construction industry around the globe coupled with the increasing investment by government in the construction industry especially in the Asia Pacific region is a prime factor fueling the market growth of tankless water heater. According to the report published by Globaldata in October 2018, the global construction output is forecasted to rise to US$ 12.9 trillion by 2022, up from US$ 10.8 trillion in 2017. Therefore, rising construction industry around the globe is projected to propel the market growth of tankless water heater.

Increasing disposable income of middle-class in urban population along with the rising trend of adopting a better lifestyle are some of the key factors projected to fuel demand for tankless water heater. Moreover, demand for continuous hot water coupled with the rising need for saving energy and money are further anticipated to foster demand for cost-effective tankless water heater. Also, growing population around the globe is estimated to propel the market growth over the forecast period.

The COVID- 19 outbreak had a considerable impact on the overall industry growth on account of the shutdown of various manufacturing & industrial facilities along with delays in several infrastructural development projects. However, government relaxations on imposed lockdowns, followed by the resumption of industries and operations have augmented the market growth. Moreover, storage water heater systems will experience a surge in demand owing to the expansion of infrastructural buildings and rising construction industry across residential & commercial establishments.

Among region, Europe dominated the global tankless water heaters market in 2021, reporting 35.6% market share in terms of revenue, followed by Asia Pacific and North America, respectively.

Figure 1. Global Tankless Water Heater Market Value Share (%), By Region, 2021

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Market Restraints

High cost of the tankless water heater compared to the traditional water heater is also expected to hinder the market growth over the forecast period. Moreover, other factors such as unavailability of suitable equipment and fluctuation in the supply of natural gas or Propane is also expected to restrain the market growth of tankless water heater over the forecast period.

The smaller units, which can only supply one faucet at a time, cannot create enough hot water for the entire home. There are larger units that provide adequate hot water for houses, but they are more expensive. This factor is expected to hinder the market growth of tankless water heater. Moreover, the large unit also utilizes high-powered burners and require special venting, a requirement which is further expected to restrict the market growth.

Market Opportunities

Rising replacement of existing water heaters with tankless water heater is anticipated to offer immense opportunities for global tankless water heater market over the forecast period. Government rebates and subsidize along with the changing perception of consumers towards advanced heaters are further promoting the replacement of traditional water heaters with tankless water heater. Hence, increasing replacement of existing water heaters across residential as well as commercial places are projected to propel the market growth.

Rising demand of hybrid-tankless water heater that have easy operation and installation is expected to propel the market growth over the forecast period. Moreover, the integration of regular features of conventional water heaters with energy and cost-effective tankless water heater is expected to offer immense growth opportunities for water heater manufacturers as well as the customer. Therefore, the rising adoption of hybrid tankless water heater is expected to foster market growth. .

Figure 2. Global Tankless Water Heater Market Value Share (%), By Energy Factor, 2021

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On the basis of energy factor, in 2021, 0.80 to 0.89 EF accounted the largest market share of 47.90% in terms of revenue, followed by 0.90 EF and above and 0 to 0.79 EF.

Recent Developments

• In January 2022, Bradford White Water Heaters, a manufacturer of residential and commercial water heating and storage products, introduced the KwickShot, a reliable and easily installed tankless electric water heater available in thermostatic and non-thermostatic models to meet a range of water temperature needs in a variety of everyday applications. This has enhanced the product portfolio of the company.
• In May 2019, Rheem’s Prestige Heat Pump powered by EcoNet Smart Thermostat, a manufacturer that produces residential and commercial water heaters and boilers launched water heaters and boilers which provide Wi-Fi connectivity and other advanced features, facilitating homeowners with improved system protection, control, monitoring, and one-touch alert capability. This has enhanced the product portfolio of the company.
• In August 2022, Rinnai, a manufacturer of tankless water heater launched New RE Series Tankless Water Heater with Smart-Circ Intelligent Recirculation. The RE Series is compatible with the Wi-Fi module controller, to achieve scheduled recirculation or on-demand operations.

Competitive Section

Major players operating in the global tankless water heater market include Rheem Manufacturing Company, Rinnai Corporation, A. O. Smith, Noritz America Corp., Ariston Thermo Group, Kyungdong Navien Co. Ltd., Stiebel Eltron GmbH & Co. KG, Bradford White Corp., Haier Electronics Group Co, Ltd., and Bajaj Electricals Ltd.