Water Heater Market Report Scope & Overview:

The Water Heater Market size was valued at USD 30.65 Billion in 2024 and is expected to reach USD 44.10 Billion by 2032, growing at a CAGR of 4.70% over the forecast period of 2025-2032.

The water heater market is growing at a rapid pace due to the rising demand for energy-efficient and space-saving systems. Moreover, advanced technologies, including AI-enabled smart water heaters, and IoT-based control systems for continuous monitoring and predictive maintenance, are also expected to gain traction in the market. Fortification for better Conductivity and Output and increasing preference for hybrid water heaters for residential and commercial sectors is another factor expected to propel the growth of the market over the forecast period. The increase in importance of sustainable solutions that promote eco-friendliness has led to new opportunities and to the expansion of market footprint globally.

“In November 2024, Wondrwall introduces AI-controlled heat pump from revolutionary smart, energy-efficient water heater market segments. This innovation could save homeowners money while also being more sustainable.”

The U.S. water heater market size was valued at USD 7.72 Billion in 2024 and is expected to reach USD 7.08 Billion by 2032, growing at a CAGR of 5.68% over the forecast period of 2025-2032.

The U.S. water heater market is projected to grow substantially on account of growing inclination toward smart, energy-efficient systems. Due to the new energy regulations and sustainability, manufacturers are upgrading with better features. Replacement demand, increased consumer awareness also contribute to the positive growth of the market across residential and commercial applications.

Water Heater Market Dynamics:

Drivers:

• Rising Popularity of Smart and Connected Water Heaters Enhances User Convenience and Energy Savings

Demand in the water heater market is driven by the emergence of smart and connected water heaters. Modern systems integrate IoT and AI-based technologies to enable mobile app functionality and home smart systems that allow remote monitoring, control, and predictive maintenance. It ensures energy efficient, more convenient, and cost-effective for users. This market is being aided by increasing interest in home automation and the required heating methods that are both energy efficient and provide comfort for human occupancy. Manufacturers are tapping into this by providing advanced features leading to growth in residential and commercial sectors.

“For instance, In May 2022, Rinnai Public Relations Newly Available RE Series Tankless Water Heaters Feature Built-In Smart-Circ Intelligent RecirculationRinnai also establishes the first U.S. built tankless water heater, answering consumer demand for energy efficiency and reliability”

• Growing Demand for Eco-Friendly Products in Various Industries Boosts the Water Heater Market Growth

An increasing number of businesses and households are choosing water heaters with the use of renewables, like solar or heat pump technology. Such options cut down on carbon footprints and come with a high degree of energy savings in the long run. This transition is also being driven by regulatory support and green building initiatives. As a result, manufacturers are coming up with a variety of eco-friendly water heater options, thus creating competition, and innovation in the segment and further propelling the growth of the industry.

Restraints:

• High Initial Costs and Installation Challenges Pose Restraints for Water Heater Market Expansion

Modern water heaters require a lot of benefits, but their high initial cost and complex installation are expected to hinder the market growth. Smart and energy-responsive water heaters will likely still demand high large for an investment, which can turn off residential and small business users. Furthermore, installation of these systems, especially solar and heat pump types, can be labor and skills intensive. In addition, due to the adoption of secure currency being a relatively new concept, it becomes difficult for several sectors, specifically emerging economies, to accept it, thereby restricting the overall market growth in some parts.

Water Heater Market Segmentation Analysis:

By Product

In 2024, the electric segment led the water heater market, with a revenue share of approximately 51%. This prevalence is due to the availability of electricity infrastructure and increasing adoption of energy efficient appliances in residential and commercial applications. Among the greatest benefits of electric water heaters are simple installation, lower maintenance costs and high-quality reliability, making it the most practical option of all time by the consumers as well. With increasing demand for smart electric water heaters with programmability and remote control capability, this segment is further gaining traction globally.

Gas segment is projected to exhibit remarkable CAGR of approximately 4.81%. The growth is attributed to the rising deployment of gas-based water heating similar systems, particularly in gas-rich regions with low energy prices. Gas water heaters are faster to heat, cost-effective, and efficient. In addition to this, factors such as rising focus on electricity saving and maintaining government policies and regulations are also helping the growth of gas water heaters in residential and commercial applications.

By Technology

In 2024, storage tank segment accounted for the largest revenue share for water heater market. The primary cause of this supremacy is the faithfulness and ease of use of storage tank water heaters have always been the common option for decades. That makes these systems ideal for a busy home where a steady flow of hot water is needed. They are fairly inexpensive and require relatively little maintenance, and they have become extremely popular, especially in residential applications, where endless hot water is a high priority.

Over the forecast period of 2025-2032, the hybrid segment is anticipated to witness the fastest CAGR growth. The growth is driven by the growing acceptance of advanced hybrid water heating systems that utilize an effective heat pump technology combined with traditional heating. Compared to your average traditional model, hybrid water heaters save both energy and operating costs. The increasing focus on the environment and preference for low-carbon choices are also playing important roles in the growth of hybrid water heaters, which are the fastest-growing type of water heater on the market.

By Application

In 2024, the largest share of revenue in the water heater market was held by the residential segment. This is because the water heating solution is one of the most required household needs for an easy and comfortable life. Increasing urbanization and disposable incomes, and a rising emphasis on home energy efficiency, are expected to drive residential adoption of water heaters at a relatively high level. Availability a wide variety of water heater options and technologies solid the segment hold on market.

During the forecast period 2025-2032, industrial segment is also expected to have largest CAGR. The increasing demand for hot water in several industrial applications including manufacturing, food processing, and chemical industries is driving the growth of this segment. Industrial water heaters are vital to enhance operational efficiency and achieve consistent production results. As various industries become more determined to minimize energy use and apply green measures, the demand for smarter water heating products is spurred, making the industrial segment the fastest-growing sector of the market.

By Capacity

30 – 100 liters segment held lucrative revenue share in the water heater market. This category is a range of prices between capacity and efficiency that is favored by small to medium sized homes and light commercial application. These types of water heaters are perfect for the average household, as they provide plenty of hot water for your daily needs without billing up unnecessary energy costs. Moreover, the availability of good options and competitive pricing has supported this segment's leadership in the market.

The below 30 liters segment is predicted to develop at a substantial CAGR. This growth is due to an increasing adoption of smaller units to be used in kitchens, bathrooms and mobile homes because of their compact size and energy efficiency. These units are convenient for urban and space-limited dwelling, heating low volumes of hot water very quickly. Increasing acceptance of portable/point-of-use water heaters in the emerging economies is also an important factor contributing toward the growth of the segment.

Water Heater Market Regional Outlook:

In 2024, the Water Heater Market revenue in Asia-Pacific accounted for the largest share at 35.49%. The supremacy of this region is determined by its population base, fast urbanization and the high per capital or disposable incomes are further increasing the demand for hot water solutions in residential and commercial sectors. Furthermore, the increase in thriving population in addition to the growth of the construction sector and government initiatives to promote energy efficiency has stimulated the demand for modern water heaters for the sake of water heating needs in the region of Asia-Pacific. It also leads its competitors from the price front as well due to the presence of key market players and the price of heating pads as well.

North America is forecasted to register approximately 6.01% CAGR. Driving this growth are the increasing number of energy efficiency-centric initiatives coupled with eco-friendly water heater solutions and the rising demand for smart home adoption. Also, the constant replacement demand for old infrastructure and rapid adoption of efficient hybrid and tankless water heaters drive the market growth in North America.

The European water heater market is projected to grow at a steady CAGR during the forecast period. Germany is the strongest market thanks to its continued emphasis on sustainability and growing energy efficiency focus. Their mixer models released in the not-so-distant past also include novel hybrid water heaters that provide optimum performance at lower carbon footprints.

Key Players in the Water Heater Market are:

The major players operating in the market are A.O. Smith, Robert Bosch LLC, Ariston Thermo SpA, Rheem Manufacturing Company, Rinnai Corporation, Bradford White Corporation, NORITZ Corporation, Whirlpool Corporation, Westinghouse Electric Corporation, and Bajaj Electricals Ltd.

Recent Developments

• October 2024 - Noritz Corporation unveiled its new condensing gas water heater, the N-3020DVC, featuring advanced heat exchanger technology and eco-friendly performance, expanding its product lineup for global residential and commercial applications.

• March 2025 - Nexol Photovolthermic launched an innovative PV water heater combining solar photovoltaic and thermal tech, enhancing energy efficiency and reducing costs in the water heater market.