Global Tankless Water Heater Market Size, Share, and COVID-19 Impact Analysis, By Product (Electric and Gas), By Application (Residential and Commercial), By Region (North America, Europe, Asia-Pacific, Latin America, Middle East, and Africa), Analysis and Forecast 2025 - 2035

Global Tankless Water Heater Market Insights Forecasts to 2035

• The Global Tankless Water Heater Market Size Was Estimated at USD 4.10 Billion in 2024
• The Market Size is Expected to Grow at a CAGR of around 10.49% from 2025 to 2035
• The Worldwide Tankless Water Heater Market Size is Expected to Reach USD 12.29 Billion by 2035
• Asia Pacific is expected to grow the fastest during the forecast period.

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According to a research report published by Spherical Insights and Consulting, The Global Tankless Water Heater Market Size was valued at approximately USD 4.10 Billion in 2024 and is projected to grow from USD 4.53 Billion in 2025 to around USD 12.29 Billion by 2035 with a compound annual growth rate (CAGR) of 10.49% from 2025 to 2035. Growing awareness of energy efficiency, the need for continuous hot water, space-saving designs, technological improvements, and the expansion of residential and commercial building globally are the main factors propelling the tankless water heater market.

 

Global Tankless Water Heater Market Forecast and Revenue Outlook

• 2024 Market Size: USD 4.10 Billion
• 2035 Projected Market Size: USD 12.29 Billion
• CAGR (2025-2035): 10.49%
• North America: Largest market in 2024
• Asia Pacific: Fastest growing market        

 

Market Overview

The tankless water heater market includes the production and sale of on-demand water heating systems that deliver continuous hot water without the use of storage tanks, resulting in energy efficiency, compact design, and lower utility costs. The worldwide market for tankless water heaters is being driven by the increasing demand for on-demand, energy-efficient hot water systems that significantly reduce utility bills. Technological advancements are offering advances in temperature control, durability, and heating efficiency, and a focus on environmentally-conscious products increases consumer inclination towards eco-friendly items. Adoption is further being accelerated by government subsidies for energy-efficient products, compact designs made for urban dwellers, and smart home functionality. Demand is also accelerating as lifestyles shift, disposable income increases, and the hospitality industry requires a constant supply of hot water. In developing nations, additional demand is being generated by replacing outdated traditional water heaters, increasing residential infrastructure, and rapid urbanization. Tankless systems are becoming a more popular option worldwide as a result of the emphasis on water conservation, sustainable living, and affordable solutions, which are motivating both homes and businesses to make the move. With 2,242 smart homes for sale as of December 2021, Florida has the largest number of smart homes for sale in the United States. This pattern shows that consumers are becoming more interested in energy-efficient, networked technologies. The market is also expanding as a result of growing knowledge of tankless water heaters and their advantages, which include energy savings and on-demand hot water.

 

Key Market Insights

• North America is expected to account for the largest share in the Tankless Water Heater Market during the forecast period.
• In terms of product, the electric segment is projected to lead the Tankless Water Heater Market throughout the forecast period
• In terms of application, the residential segment captured the largest portion of the market

 

Tankless Water Heater Market Trends

• Growing need for on-demand, energy-efficient hot water systems.
• Growing use of remote-control and smart home integration features.
• Expansion of commercial building projects and home renovations.
• Improvements in technology that allow for improved temperature control and quicker heating.
• Growing environmental consciousness and a need for sustainable, eco-friendly water heating options.

 

Report Coverage

This research report categorizes the tankless water heater market based on various segments and regions, forecasts revenue growth, and analyses trends in each submarket. The report analyses the key growth drivers, opportunities, and challenges influencing the tankless water heater market. Recent market developments and competitive strategies, such as expansion, type launch, development, partnership, merger, and acquisition, have been included to draw the competitive landscape in the market. The report strategically identifies and profiles the key market players and analyses their core competencies in each sub-segment of the tankless water heater market.

 

Driving factors: The tankless water heater market is driven by growing energy efficiency demand, technological advancements, and rising urbanization and modernization.

Growing consumer demand for energy-efficient products, bolstered by government programs like the Energy Star program, is driving the global tankless water heater market. Modernisation and urbanisation raise the need for space-efficient systems, while technological developments improve performance and lower standby losses. As families and companies look for affordable, environmentally friendly alternatives to conventional water heaters, growing consumer awareness of sustainable, eco-friendly solutions further encourages adoption and opens up enormous potential opportunities for manufacturers globally.

 

Restraining Factor: The tankless water heater market is restrained by higher upfront costs and limited hot water output capacity during simultaneous high-demand usage.

Higher upfront prices are a barrier to the tankless water heater industry since improved technology and installation come with a higher upfront cost, which turns off budget-conscious buyers. Further raising costs is the possibility of dissatisfaction due to inadequate hot water output capacity during concurrent high-demand consumption, such as many showers or appliances.

 

Market Segmentation 

The global Tankless Water Heater market is divided into product and application.

 

Global Tankless Water Heater Market, By Product:

Why is the electric segment expected to generate the highest revenue in 2024 for the global Tankless Water Heater market during the forecast period?

The electric segment in the tankless water heater market is expected to grow at the highest CAGR over the forecast period. The increasing trend toward cleaner energy sources and the reduction of gas systems in many areas is driving the electric tankless water heater market. The market is increasing as more people in rural and developing areas have access to power and use electric tankless water heaters instead of traditional gas models. Additionally, consumers like them because they require less maintenance and are more affordable to install than gas water heaters. Government programs designed to support electrification and improve energy efficiency are also fueling adoption. Likewise, advances in digital controls and smart thermostats enhance consumers’ convenience and facilitate the market’s expansion. Electric tankless water heaters are offered for residential and commercial applications by manufacturers such as Bosch and A. O. Smith.

 

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The gas segment in the tankless water heater market is expected to grow at the fastest CAGR over the forecast period. Larger homes and commercial uses are attracted to gas tankless water heaters as they provide superior heating efficiency and higher flows than electric units. Households with low natural gas prices will find these systems to be a more cost-effective approach to electric units. Because they last longer than electric units, gas units are becoming increasingly common as a long-term solution. Expanding infrastructure development in colder climates, where high-capacity heating is needed, also supports the demand. Additionally, due to low-NOx and condensing technology, more petrol versions comply with stricter emissions standards, making them more environmentally friendly.

 

Global Tankless Water Heater Market, By Application:

What factors make the residential segment dominate in terms of market share during the forecast period in the global Tankless Water Heater market?

The residential segment held the largest market share in the tankless water heater market. The increasing trend of space-saving appliances in current residences and apartments is bolstering the tankless water heater segment in residential applications. Homeowners are increasingly valuing the continuous supply of hot water for multiple bathrooms or kitchens to use at the same time, and this is strongly influencing purchase decisions. Furthermore, homeowners’ increasing understanding of long-term energy savings is having an influence on their purchase decisions. The demand for new, improved water-heating systems is also compounded by the emphasis on renovation and improvement activities and installations. The desire for aesthetic appeal in modern residential settings also plays into the general trend toward wall-mounted appliances that are consistent with modern sensibilities.

 

The epiretinal membrane segment in the tankless water heater market is expected to grow at the fastest CAGR over the forecast period. The requirement for dependable, high-volume hot water in industries like food service, healthcare, and hospitality is what propels the tankless water heater market's commercial use. Systems that minimise downtime and guarantee steady performance during periods of high usage are given priority by businesses. Tankless systems' scalability enables tailored solutions to meet certain operational requirements. The move away from conventional heaters is also being encouraged by stricter restrictions on energy efficiency in business buildings.

 

Regional Segment Analysis of the Global Tankless Water Heater Market

• North America (U.S., Canada, Mexico) 
• Europe (Germany, France, U.K., Italy, Spain, Rest of Europe)
• Asia-Pacific (China, Japan, India, Rest of APAC)
• South America (Brazil and the Rest of South America) 
• The Middle East and Africa (UAE, South Africa, Rest of MEA)

 

North America Tankless Water Heater Market Trends

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What factors contribute to the North America region holding the largest share of the global Tankless Water Heater market during the forecast period?

The adoption of tankless water heaters in North America is largely supported through growing investment in energy management systems, as well as smart grid infrastructure. Increasingly, customers are purchasing app-controlled and Wi-Fi-compatible models with real-time usage tracking. The size of the apartment upgrade market for water heating represents an opportunity, given the age of the housing stock. Interestingly, consumer preferences across the region are being increasingly dictated by eco-labelling and environmental certifications. Additionally, the transition to electrified alternatives, consistent with decarbonisation objectives, is also stimulating innovation by manufacturers.

 

Why does the United States lead the North American Tankless Water Heater market?

The advantages of tankless systems are becoming more widely known in the US thanks to intensive marketing campaigns by manufacturers and utility companies. Efficiency guidelines that support tankless systems are being progressively included in regional building codes. In many states, utility rebates and tax incentives are greatly increasing customer adoption. Compact, simple-to-install systems are also becoming more popular due to a growing do-it-yourself mentality. Additionally, the market for high-capacity versions is robust due to the increasing demand for hot water in large suburban homes.

 

Asia Pacific Tankless Water Heater Market Trends

How is the Asia Pacific region expected to be the fastest-growing Tankless Water Heater market with the fastest growth rate? 

In the Asia Pacific region, tankless water heaters and other modern home appliances are increasingly in demand. Because of high population density and small living spaces, compact heating systems are favoured in the region. Government initiatives promoting energy-efficient housing in countries such as China, South Korea, and Japan are some of the key market drivers. Consumers' awareness concerning hygiene and the availability of hot water has changed in the aftermath of COVID-19. Finally, local manufacturing development is lowering costs and increasing the availability of tankless devices.

 

Why is the Tankless Water Heater market growing in Europe?

Strict EU regulations focused on cutting emissions and saving energy are also leading the tankless water heater market in Europe. Decentralised heating systems in multi-family housing are typical, leading to decentralised tankless solutions. The cultural focus on sustainability is driving the increase in low-use water heating appliances. Since green measures are now priorities in many markets, replacing traditional boilers is leading to tankless solutions as a higher priority. In European countries, the growing cost of electricity is also leading to increasingly efficient methods of heating water.

 

Competitive Analysis:

The report offers the appropriate analysis of the key organizations/companies involved within the global tankless water heater market, along with a comparative evaluation primarily based on their type of offering, business overviews, geographic presence, enterprise strategies, segment market share, and SWOT analysis. The report also provides an elaborate analysis focusing on the current news and developments of the companies, which includes type development, innovations, joint ventures, partnerships, mergers & acquisitions, strategic alliances, and others. This allows for the evaluation of the overall competition within the market.

 

Worldwide Top Key Players in The Tankless Water Heater Market Include

• Rheem Manufacturing Company
• Rinnai Corporation
• Bradford White Corporation
• Robert Bosch LLC
• EcoSmart Green Energy Products, Inc.
• Stiebel Eltron Inc.
• Takagi
• Noritz America Corp.
• Navien Inc.
• A. O. Smith
• Others

 

Key Target Audience

• Market Players
• Investors
• End-users
• Government Authorities 
• Consulting and Research Firm
• Venture capitalists
• Value-Added Resellers (VARs)

 

Recent development

• In September 2024, in light business and residential settings, A.O. Smith unveiled a new Point-Of-Use (POU) electric tankless water heater that is easy to install. In order to improve durability and performance, this little device has features like integrated scale detection, leak detection with audible alerts, and dry fire prevention. It also doesn't require venting.

• In January 2024, the AHR Expo, a major gathering for HVACR specialists, was recently attended by the Midea Kitchen and Water Heater Appliances Business Division (Midea KWHA) in Chicago. Manufacturers and suppliers of all sizes and specialities come together at the AHR Expo to showcase the upcoming HVACR technologies and foster idea sharing.

 

Market Segment

This study forecasts revenue at the global, regional, and country levels from 2020 to 2035. Spherical Insights has segmented the tankless water heater market based on the following segments:

 

Global Tankless Water Heater Market, By Product

• Electric
• Gas

 

Global Tankless Water Heater Market, By Application

• Residential
• Commercial

 

Global Tankless Water Heater Market, By Regional Analysis

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Rest of Asia Pacific
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Middle East & Africa
  • UAE
  • Saudi Arabia
  • Qatar
  • South Africa
  • Rest of the Middle East & Africa