Commercial Water Heater Market Expected to Reach $9.9 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Commercial Water Heater Market," The commercial water heater market was valued at $6.3 billion in 2022 and is estimated to reach $9.9 billion by 2032, growing at a CAGR of 4.6% from 2023 to 2032.

The growth of the global commercial water heater market is majorly driven by growing infrastructure, especially in public and commercial sectors. In addition, the demand for water heaters that are integrated with renewable sources which are both environmentally friendly as well as pocket-friendly has increased considerably owing to several subsidies provided by governments in many countries. Such water heaters help curb carbon emissions that contribute to the net-zero targets of many countries. Moreover, it is a great aid in reducing dependence on electricity derived from fossil fuels. Booming commercial sector and real estate sectors in the Asia-Pacific region and advancements in the current technology is the recent commercial water heater market trends.

The global commercial water heater market size is studied by type, storage capacity, rated capacity, and region. On the basis of type, the market is divided into electric, gas, oil, solar, hybrid, and others. The electric segment dominated the commercial water heater market share in 2022 owing to the higher operational efficiency offered by electric water heaters. Electric water heaters can effectively maintain their temperature and are easier to manage as compared to any other water heater, which fuels their demand across the hospitality sector. In addition, an electric water heater does not burn fuel, thus, it produces fewer emissions. Moreover, they have a prolonged service life as compared to other heaters. Thus, multiple benefits associated with electric heaters contribute toward market growth.

However, solar commercial water heaters are expected to grow at a higher CAGR during the projection period. Solar water heaters are available as active and passive systems. Active systems are available in direct circulation and indirect circulation. Maintenance is one disadvantage; however, most systems do not require a high degree of care. Scaling occurs when there are minerals suspended in the water, which build up as calcium deposits in the system. This can be prevented by adding mild water softeners of acid to the water. Solar water heaters utilize a renewable and green energy source. The solar panels convert almost up to 80% of radiation into heat energy without making use of any external fuels. Such advantages act as drivers of the commercial water heater market growth. Moreover, subsidies from the government to push solar water heaters are expected to offer growth opportunities for the market.

Bio-fueled water heaters have almost zero maintenance cost and prolonged service life, which is its key benefit. Using wood as solid fuel in place of fossil fuels helps to prevent long-term climate changes since the carbon dioxide released during the combustion was actually absorbed while the tree was growing, so they are essentially carbon neutral. Modern solid-fueled commercial water heaters are fuel efficient, much cleaner, and safer. They use wood, which is either freely available or at a cheap rate, thereby helping to cut down electricity bills. Thus, multiple benefits associated with bio-fueled waters boost their demand across the globe, thereby augmenting market growth.

Depending on the storage capacity, the market is classified into below 500 liters, 500–1,000 liters, 1,000–3,000 liters, 3,000–4,000 liters, and above 4,000 liters. The below 500 liters segment is anticipated to grow at a notable CAGR during the forecast period. This is attributed to the potential demand from small commercial buildings, especially with an increased focus on solar commercial water heaters that are being installed on a large scale. These water heaters are majorly used in small commercial places such as small offices, beauty salons, small restaurants, and small or individual health clinics.

By rated capacity, the market is divided into 0–10 kW, 10–50 kW, 50–100 kW, and above 100 kW. The 10-50 kW segment dominated the market share for 2022 and is expected to maintain its leading position during the projection period. This is attributed to the fact that heaters with 10–50 kW capacity are widely used in cafes, hotels, hostels, restaurants, and offices.

The commercial water heater market analysis is done across North America, Europe, Asia-Pacific, and LAMEA (Latin America, the Middle East, and Africa). North America dominated the market in 2022, however, Asia-Pacific is expected to grow at a higher CAGR during the projection period. This can be attributed to the surge in demand for commercial real estate in the region as well as infrastructural development in developing economies. The Asia-Pacific is expected to grow at a higher CAGR during the commercial water heater market forecast period owing to the presence of developing economies.

The major players operating in the commercial water heater industry are A.O. Smith Corporation, Danfoss A/S, Mitsubishi Electric Corporation, STIEBEL ELTRON GmbH and Co. KG, NIBE Industrier AB, Carrier Global Corporation, Robert Bosch GmbH, Rheem Manufacturing Company, Bajaj Electricals Ltd., and Bradford White Corporation. Other players in the industry are Racold, Venus, Nortiz Corporation, Daikin Industries, Valliant, and American Water Heaters.

Key findings of the study

• By type, the solar segment is projected to grow at the highest CAGR of approximately 5.0%, in terms of during the commercial water heater market forecast period
• By the storage capacity, the 500-1000 liters segment dominated the commercial water heater market share by over 30% in 2021
• By rated capacity, the 10-50 kW segment is projected to grow at the highest CAGR of approximately 4.7%, in terms of during the commercial water heater market forecast period.
• By region, North America dominated the commercial water heater market and is expected to grow at a CAGR of 4.6% during the forecast period