Tankless Water Heater Market Size, Share, and Growth Analysis, By Product Type (Electric, Gas), By Installation (Indoor, Outdoor), By Technology, By Feature, By Application, By Flow Rate, By Region - Industry Forecast 2025-2032

Global Tankless Water Heater Market size was valued at USD 4.3 billion in 2023 and is poised to grow from USD 4.7 billion in 2024 to USD 9.49 billion by 2032, growing at a CAGR of 9.2% during the forecast period (2025-2032).

The demand for tankless water heaters is surging as consumers increasingly prioritize energy efficiency and sustainability. These innovative systems consume up to 34% less energy than traditional storage water heaters, positioning them as an attractive choice for environmentally conscious buyers. Their compact design makes them ideal for smaller homes, as they eliminate the need for bulky storage tanks by heating water on demand. Although they come with a higher initial cost, tankless models offer long-term savings, estimated at $100 to $200 annually on electricity bills, along with extended warranties and life spans. As consumers shift towards these eco-friendly solutions, the market for tankless water heaters is poised for significant growth in the coming years.

Top-down and bottom-up approaches were used to estimate and validate the size of the Global Tankless Water Heater market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Global Tankless Water Heater Market Segments Analysis

Global Tankless Water Heater Market is segmented by Product Type, Installation, Technology, Feature, Application, Flow Rate and region. Based on Product Type, the market is segmented into Electric and Gas. Based on Installation, the market is segmented into Indoor and Outdoor. Based on Technology, the market is segmented into Condensing Technology and Non-condensing Technology. Based on Feature, the market is segmented into Manual and Remote Control. Based on Application, the market is segmented into Residential and Commercial. Based on Flow Rate, the market is segmented into High and Low. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.

Driver of the Global Tankless Water Heater Market

The Global Tankless Water Heater market is largely propelled by the remarkable energy efficiency these units offer. Unlike traditional tank heaters, tankless models heat water on demand, resulting in energy savings of approximately 24% to 34%. This efficiency appeals significantly to environmentally conscious consumers aiming to lower their utility bills, as it provides substantial long-term cost advantages. As a result, the increasing preference for energy-efficient solutions continues to stimulate market demand, reflecting a broader trend of prioritizing sustainable practices and cost-effective innovations among homeowners and businesses alike. This growing awareness is pivotal in shaping the future landscape of the tankless water heater industry.

Restraints in the Global Tankless Water Heater Market

The primary constraint in the Global Tankless Water Heater market is the higher installation costs associated with these systems compared to traditional water heaters. Though tankless models may offer long-term savings, their initial price tag can be substantially higher. Additionally, the installation process often necessitates alterations to existing electrical and plumbing systems, further increasing overall expenses. This elevated upfront investment may deter some consumers from choosing tankless options, ultimately hindering the potential for market expansion. Consequently, the financial implications of adopting tankless water heaters pose a significant challenge to wider acceptance and growth within the industry.

Market Trends of the Global Tankless Water Heater Market

The Global Tankless Water Heater market is witnessing a significant trend toward the incorporation of smart features, driven by the growing adoption of smart home technologies. Consumers are increasingly prioritizing convenience and energy efficiency, prompting a surge in demand for water heaters equipped with advanced functionalities such as temperature monitoring, smartphone controls, and Wi-Fi connectivity. This shift is indicative of a broader market transformation, where energy management and remote access to household appliances are becoming essential features. As smart technology gains traction, the popularity of tankless water heaters with these innovative capabilities is expected to continue rising, reshaping consumer preferences and industry standards.