Water Heater Market Overview:
The global water heater market was valued at $32,603 million in 2017, and is projected to reach $48,519 million by 2025, growing at a CAGR of 5.1% from 2018 to 2025. A water heater, also known as geyser, is a heating device that utilizes energy from various external sources to heat water. Water heaters are available in various types such as instant water heaters, storage water heaters, gas-based water heaters, and solar water heaters. The selection of a proper water heater depends upon several important factors such as the type of building that it is to be installed into, requirements of the householder, availability of fuel types, fuel cost and efficiency of the system, installation and maintenance cost, storage and distribution temperature, and user safety.
Market Value Projections and Insights
- Based on type, the instant segment held the major share of the water heater market in 2017.
- Based on application, the residential segment held the largest share of the water heater market in 2017.
- As per distribution channel, specialty stores held the major share of the water heater market in 2017.
- Based on region, North America held the major share of the water heater market in 2017.
Energy efficiency is the utilization of energy in the most cost-effective manner to carry out a manufacturing process or provide a service, while minimizing energy wastage. The adoption of energy-efficient systems and technologies is majorly associated with costs (for investments and energy use) and reduced emissions of greenhouse gases. Moreover, energy-efficient water heaters minimize utility bills, and are environment friendly.
In South Africa, ripple control system is used to control electrical storage water heaters. It is a system which enables electricity consumption to be more evenly distributed across the grid to reduce costs. Ripple control, in South Africa, is used extensively to control domestic water heaters for demand side management. This is done by switching off the electrical water heaters for a short duration of time during maximum demand periods. Hence, all these factors together contribute toward the growth of the global water heater market.
In developing countries, such as India, electricity shortage and outages are common issues. Power outages may include long-term or short-term loss of electricity to a specific area. Such outages may adversely affect businesses, homes, and entire cities. This outage or shortage occurs majorly due to weather conditions such as hurricanes, floods, storms, cold weather, wildfires, and tornadoes. Moreover, equipment failures due to age, dust, and humid air impact the performance of machines. Growth in consumer awareness toward sustainable use of energy is expected to propel the water heater market growth of instant water heaters. Instant water heaters are gaining popularity among consumers due to their energy-saving attribute. It provides hot water on demand rather than storing heated water. It ensures a continuous supply of hot water by saving energy. Its higher efficiency and innovation in design is fueling water heater market growth.
By Type Infographic
Industry Highlights
- The water heater market has been experiencing steady growth due to rising demand for energy-efficient heating solutions across residential, commercial, and industrial sectors.
- Advances in water heater technology, including hybrid water heaters and tankless systems, are leading to increased production. Manufacturers are focusing on energy-efficient and smart water heaters that integrate IoT-based systems for better control and monitoring.
- The residential sector represents the largest consumer segment, with homeowners prioritizing spending on upgrading or replacing traditional water heaters with energy-efficient models.
- China, the U.S., and Germany are significant production hubs for water heaters.
The residential water heaters segment has the largest market size due to its extensive usage among households. Residential water heaters are enabled with smart technology, sleek designs, and are cost-effective. Several companies provide installation services, after-sales services, and free demos to attract users in the residential segment and to earn a competitive advantage in the water heater market.
Rapid urbanization, increase in disposable income, and innovative marketing strategies used by companies are boosting the residential water heater market. Also, growth in number of residential houses, and newly constructed buildings for residential use are driving the residential water heater market. Furthermore, improved and changed lifestyle of consumers in the developing countries such as China, India, and other countries, in Asia-Pacific is fueling the global water heater market.
By Application Infographics
Key Areas Covered in the Report
- The water heater market faces stiff competition from both established players and new entrants, leading to price wars and margin pressures, which challenge profitability for companies.
- Shifting consumer demand towards energy-efficient and smart water heating systems is pressuring manufacturers to innovate continuously, leading to increased R&D costs and operational complexity.
- Manufacturers are grappling with supply chain disruptions, high raw material costs, and logistics bottlenecks, impacting production timelines and product availability.
- Stricter environmental regulations around energy consumption and safety standards are adding compliance costs and complicating product development, especially in regions with evolving policy landscapes.
The water heater market is driven by key areas such as competition, consumer preferences, technological advancements, and regulatory compliance. Intense competition among major players is pushing manufacturers to differentiate through innovation, focusing on energy-efficient and smart water heaters. Consumer preferences are shifting towards eco-friendly, energy-saving solutions, leading to a growing demand for tankless and hybrid models. In response, companies are increasingly integrating IoT and AI technologies to offer connected, automated systems that enhance user convenience. The value chain faces challenges from fluctuating raw material prices and supply chain disruptions, further intensified by global geopolitical tensions. Additionally, stringent regulations promoting sustainability and energy efficiency are compelling manufacturers to invest heavily in R&D to meet compliance, especially in markets such as North America and Europe. The overall trend points to a growing emphasis on energy efficiency, technological integration, and sustainability as key drivers in the evolution of the water heater market.
Topics discussed in the report
- Diverse type of water heater
- Challenges for manufacturers
- Urbanization and Infrastructure Development
- Smart Home Integration
- Differentiation between residential and commercial water heaters
- Climate Dependency for Solar Systems
Segment Overview
The water heater market is segmented based on type, application, and distribution channel. Based on type, the water heater market is divided into gas, instant, storage, and solar water heaters. Based on application, it is classified into commercial, residential, and industrial. As per distribution channel, the market is categorized into supermarkets and hypermarkets, specialty stores, e-commerce, and others. By region, the water heater market is divided into North America (the U.S., Canada, and Mexico), Europe (UK, Germany, France, Spain, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, Australia, South Korea, Rest of Asia-Pacific), and LAMEA (Latin America, Middle East, Africa).
e-commerce segment held is the fastest growing segment of the water heater market in 2017, driven by increasing consumer preference for online shopping due to convenience, a wide range of product options, and competitive pricing. The rise of e-commerce platforms such as Amazon, Alibaba, and other specialized online retailers has allowed consumers to easily compare different water heater models, read reviews, and access detailed product information. Moreover, online retailers often offer exclusive discounts, free delivery, and easy installation services, making the overall buying experience more attractive. The increasing penetration of smartphones, better internet connectivity, and advancements in digital payment methods have also contributed to the growth of e-commerce. Additionally, manufacturers are leveraging online channels to directly engage with consumers and provide customized offers, further boosting the dominance of the e-commerce distribution channel.
Comparative Matrix of Key Segments
Parameters | Gas Water Heaters | Instant (Tankless) Water Heaters | Storage Water Heaters | Solar Water Heaters |
Market Share | Moderate (Popular in regions with gas supply) | Growing rapidly (High adoption in urban areas) | Largest (Most common in households) | Small but increasing (Driven by eco-conscious users) |
Distribution Channels | Retail (Home improvement stores), E-commerce | E-commerce, Specialty Stores | Supermarkets, Hypermarkets, E-commerce | E-commerce, Specialty Stores |
Challenges | Fuel price fluctuations, Environmental concerns | High upfront cost, Complex installation | Energy inefficiency, Standby heat loss | High initial setup cost, Dependent on weather conditions |
Key Players | A.O. Smith, Rheem, Bosch | Rinnai, Navien, Noritz | Bradford White, Whirlpool, GE | Rheem, SunEarth, Chromagen |
Regional Dynamics and Competition
Regional opportunities in the water heater market are influenced by varying energy needs and environmental regulations across different areas. In North America and Europe, there is a strong push towards energy-efficient and eco-friendly solutions, such as solar and tankless water heaters, driven by stringent environmental regulations and consumer demand for sustainability. Conversely, in emerging markets like Asia-Pacific and Latin America, the growing middle class and increasing urbanization are boosting demand for affordable and reliable storage and gas water heaters. The expansion of infrastructure and rising standards of living in these regions create opportunities for water heater market growth. Additionally, advancements in technology and the increasing adoption of smart home systems present significant opportunities in developed markets. Regional trends reflect a balance between the push for energy efficiency and the need for cost-effective solutions, with each region responding to its unique market dynamics and regulatory environments.
Regional Infographics
Some of the major players analyzed in this report are A. O. Smith Corporation, Ariston Thermo Spa, Bajaj Electricals Limited, Bradford White Corporation, Haier Electronics Group Co. Ltd, Noritz Corp, Rheem Manufacturing Company, Rinnai Corporation, Robert Bosch Gmbh, Venus Home Appliances P Ltd.
Water Heater Market News Release
- In 2023, Rheem announced its expansion into renewable energy solutions by enhancing its solar water heater product line. The company introduced advanced photovoltaic technology integrated into their solar systems, aiming to improve energy efficiency and align with global sustainability trends. This move is part of Rheem's broader strategy to offer more eco-friendly and innovative water heating solutions.
- A.O. Smith made headlines in 2023 with the launch of its new smart water heater series. These models feature AI-driven technology, including real-time monitoring and predictive maintenance capabilities accessible through a mobile app. This innovation reflects the growing demand for smart home integration and advanced energy management solutions.
- In 2022, Bosch announced a strategic expansion into emerging markets, specifically targeting Southeast Asia and Latin America. The company introduced a range of affordable and energy-efficient water heaters designed to meet the needs of rapidly urbanizing regions. This expansion highlights Bosch's efforts to tap into growing markets with tailored product offerings.
Key Benefits for Stakeholders
- This report provides a quantitative analysis of the water heater market segments, current trends, estimations, and dynamics of the water heater market analysis from 2017 to 2025 to identify the prevailing water heater market opportunities.
- water heater market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders to make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the water heater market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global water heater market.
- Water heater market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global water heater market trends, key players, market segments, application areas, and market growth strategies.
Water Heater Market Report Highlights
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 By Application |
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 By Distribution channel |
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Analyst Review
A water heater, also known as geyser, is a heating device that uses energy from various external sources and transfers it to the water to heat it up. Water heater comes in various types such as gas-based water heater, instant water heaters, storage water heaters, and solar water heater. The growth of the water heater market is driven by factors such as inclination of consumer toward adoption of energy-efficient systems, favorable government subsidies encouraging the use of solar water heaters, rising numbers of hospitals and hotels, and rise in population and improved infrastructure in rural areas.
The instant water heater segment accounted for maximum share in 2017, owing to its energy-saving attribute, and growth in consumer awareness toward sustainable use of energy.
The specialty stores segment dominated the global water heater market in 2017, accounting for almost half the share, and is expected to dominate the market during the forecast period. The e-commerce segment is expected to witness the highest growth rate during the forecast period.
The residential segment accounted for the maximum share and is anticipated to grow with a significant growth rate during the forecast period, owing to rapid urbanization, rise in income level of the consumers.
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