PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1661655
PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1661655
The global market for water heaters is significantly growing and evolving owing to the rising demand for hot water for residential applications such as bathing, washing, and cooking. In addition to residential water heaters, the need for hot water in sectors including hospitality, healthcare, and food service is driving market expansion for commercial water heaters. Global Water Heater Market size was valued at USD 27.61 billion in 2024 which is expected to reach USD 39.20 billion in 2032. Additionally, the market is expected to grow at a CAGR of 4.48% for the forecast period between 2025 and 2032 due to factors including rising need for energy-efficient water heaters and emerging advanced technologies that have benefitted the expansion of the water heater market on a global level.
Furthermore, an increase in the number of residences, hotels, hospitals, and other buildings, as well as population growth and better infrastructure in rural regions, are some of the reasons that are fueling the growth of the worldwide water heater market. Also, in order to cut down on energy use and carbon emissions, several nations have enacted energy efficiency requirements and guidelines for equipment, including water heaters. Regions with a strong emphasis on energy efficiency and sustainability, such as Scandinavia, Germany, and certain states in the U.S. like California, have witnessed a growing demand for high-efficiency water heaters. Consumers in these areas prioritize eco-friendly options and often seek out water heaters that meet stringent energy efficiency standards, such as Energy Star certification. However, the expansion of the worldwide water heater market is anticipated to be hampered by rising power prices, high operating expenses, and technical problems related to water heaters.
Integration of Smart and Advanced Technology
The global water heater market is expanding because of technical improvements which provide customers with more convenience, and energy-efficiency alternatives. The integration of smart technology in water heaters is gaining momentum. Manufacturers are incorporating features such as Wi-Fi connectivity, mobile app controls, and smart home integration into their water heater models. In the upcoming years, manufacturers are expected to continue to thrive if they make investments in R&D to enhance their products and integrate them with cutting-edge technology.
For instance, Noritz specializes in producing a range of high-quality yet affordable tankless water heaters that represent great value for money. The company focuses on providing efficient and effective products to its customers. Its latest models are also compatible with the Noritz Wi-Fi Adapter, which can send data readouts directly to the customer's smartphone and is marketed as the only such device that can be mounted both indoors and outside.
Strategic Divestitures Reshaping the Market Landscape
In the evolving global water heater market, companies are increasingly engaging in strategic divestitures to streamline operations and concentrate on core business areas. This trend allows firms to reallocate resources towards high-growth segments and enhance overall competitiveness. Divestitures often involve selling non-core assets to other industry players or investors who can leverage these assets more effectively. Such strategic moves can lead to increased market consolidation and the emergence of specialized entities focusing on specific aspects of the water heating industry.
In July 2024, Electrolux Group announced an agreement to divest its South African water heater business, including the Kwikot brand and production facilities in Johannesburg, to Haier Smart Home for approximately ZAR 2.4 billion (around $132.69 million). This strategic move aligns with Electrolux's focus on core business areas and is expected to be completed in the fourth quarter of 2024, pending regulatory approvals. The company anticipates a negative earnings impact of about SEK 600 million in the second half of 2024 due to this divestment.
Novel Product Launches Driving Market Growth
Novel product launches are significantly driving the growth of the global water heater market. Manufacturers are introducing innovative products that cater to diverse applications, such as solar water heaters, tankless water heaters, and smart water heaters with IoT integration. These advancements address consumer demands for energy efficiency, sustainability, and convenience. As a result, the market is experiencing rapid expansion, with a growing preference for eco-friendly and technologically advanced water heating solutions.
For instance, in October 2023, Racold released new Altro and Omnis ranges of water heaters to cater to the evolving and diverse requirements of their customers. These innovative water heaters are designed to deliver superior energy efficiency, catering to the increasing consumer demand for sustainable solutions that lower energy costs. The incorporation of smart technology allows users to control their water heating systems remotely, aligning with the trend towards smart home integration. By addressing evolving consumer needs and promoting energy-efficient solutions, Racold's new offerings contribute significantly to market expansion.
Increased Application in Commercial Settings
The demand for water heaters in the commercial industry is predicted to rise exponentially due to increasing government expenditure on the development of tourism and healthcare facilities, which would in turn considerably boost the number of water heater installations. Increased consumption of hot water in hospitals, hotels, spas, salons, restaurants and laundry setups drives the market growth. Moreover, the market is also predicted to expand because of the growing popularity of tankless systems in commercial settings. The total number of hotels worldwide is more than 7,00,000 and growing even higher with new inventory plans by international hospitality groups including Accor, IHG and Marriott. In December 2022, Marriott International Inc. announced its plan to introduce 35 new luxury hotels across the globe in 2023. Saudi Arabia is planning to increase the number of cafes from 258 per million of population to 1000 cafes as part of its Vision 2030 program. Booming real estate sector in India where the developers are going providing fully furnished units and growing number of washrooms and restrooms in residential spaces are leading to a higher demand for water heaters.
Government Regulations
Government regulations often focus on energy efficiency, safety standards, and environmental considerations. Labels or certifications, such as the CE mark in Europe, indicate that the product meets specific criteria and can help consumers make informed purchasing decisions. Furthermore, In India, Energy Efficiency and Renewable Energy Management Centre of Delhi introduced a Rs 6,000 rebate on the purchase of solar water heaters (SWH) for domestic consumers. SWHs cost roughly Rs 18,000 but save money in the long term because they do not require power. Moreover, the United States Department of Energy (DOE) has established energy efficiency standards for different types of water heaters. These standards are aimed at promoting the use of more efficient water heating technologies and reducing energy consumption. For storage tank water heaters, the DOE has set Energy Factor (EF) standards.
Rising Popularity of Tankless Water Heaters