Electric Tankless Water Heater

Electric Tankless Water Heater Market Outlook

The global electric tankless water heater market is projected to reach USD 2.5 billion by 2035, growing at a compound annual growth rate (CAGR) of 8.1% during the forecast period from 2025 to 2035. The increasing demand for energy-efficient water heating solutions, coupled with a growing awareness of environmental sustainability and rising energy costs, is anticipated to drive this market's growth. Additionally, the shift toward smart home technologies and the integration of advanced heating technologies in residential and commercial settings further contribute to the market's upward trajectory. The convenience of on-demand hot water supply without the need for bulky storage tanks also makes electric tankless water heaters an attractive choice for consumers. Furthermore, government initiatives promoting energy efficiency standards are expected to stimulate demand for electric tankless systems across various sectors.

Growth Factor of the Market

The growth of the electric tankless water heater market is primarily driven by the increasing focus on energy efficiency and sustainability in the heating sector. As individuals and businesses seek to reduce their carbon footprints, the preference for electric tankless water heaters, which only heat water as needed, is gaining momentum. Additionally, advancements in technology have led to the development of more efficient heating elements and smart controls, making these systems more attractive to consumers. The ongoing expansion of the construction and real estate sectors, particularly in developing regions, is also a significant factor contributing to market growth. The rising middle-class population with enhanced disposable income is likely to boost demand for residential installations of tankless water heaters, further driving the market. The increasing prevalence of water conservation measures and the need for space-efficient heating solutions will also enhance market prospects.

Key Highlights of the Market

• The market is anticipated to grow at a CAGR of 8.1% from 2025 to 2035.
• North America holds a major share of the market, driven by high demand in residential applications.
• Technological advancements in energy efficiency are propelling the market growth.
• Residential applications are the largest segment due to increasing investments in home improvement.
• The rise of smart home technologies is influencing consumer choices towards electric tankless systems.

By Product Type

Whole House Electric Tankless Water Heater:

Whole house electric tankless water heaters are designed to supply hot water to all fixtures throughout the home simultaneously. Their ability to provide a continuous flow of hot water makes them an ideal solution for larger households or residences with multiple bathrooms. This type of system is particularly popular among consumers looking for energy-efficient options that save space while eliminating the need for bulky storage tanks. With advancements in technology, modern whole house systems can deliver higher flow rates and are equipped with features such as smart thermostats that allow users to monitor and control water temperatures remotely. Additionally, these units have a longer lifespan than traditional water heaters, offering significant long-term savings on energy bills.

Point of Use Electric Tankless Water Heater:

Point of use electric tankless water heaters are compact units installed directly at the water outlet, providing hot water on demand for specific applications such as sinks, showers, and appliances. These systems are particularly advantageous for small spaces, as they require minimal installation effort and do not take up much room. They serve as an excellent solution for homes that experience occasional peaks in hot water demand, effectively reducing wait times and enhancing overall convenience. Point of use heaters can be installed at various locations throughout the home, allowing users to customize their hot water needs. The growing trend of renovations and home improvements, especially in urban areas, is further boosting the adoption of these point-of-use systems.

Portable Electric Tankless Water Heater:

Portable electric tankless water heaters are designed for easy transportation and can be used in various settings such as camping, outdoor events, or temporary installations. These units often operate on standard electrical outlets and are capable of producing hot water on demand wherever needed. Their versatility and convenience appeal to consumers looking for mobile hot water solutions, especially in recreational settings and during outdoor activities. The growing popularity of recreational vehicles (RVs) and camping is driving demand for portable tankless heaters, enabling users to enjoy hot water while traveling or enjoying nature. As consumer preferences shift towards more mobile and adaptable lifestyle choices, the market for portable electric tankless water heaters is expected to expand significantly.

Commercial Electric Tankless Water Heater:

Commercial electric tankless water heaters are designed to cater to the high demands of commercial establishments, offering robust performance and a constant supply of hot water for various applications. This type of unit is ideal for businesses such as restaurants, hotels, and healthcare facilities, where the need for hot water is continuous and significant. These systems often come with advanced features that allow for greater control over temperature and flow rates, ensuring operational efficiency in busy environments. With the increasing emphasis on energy efficiency and sustainability in commercial settings, many businesses are transitioning to electric tankless solutions as a means to lower operating costs while providing reliable service to their customers.

Industrial Electric Tankless Water Heater:

Industrial electric tankless water heaters are high-capacity systems designed to meet the substantial hot water demands of industrial applications. These units can handle large volumes of water, making them suitable for factories, manufacturing plants, and other industrial facilities that require continuous hot water for processes such as cleaning, sterilization, and production. The ability to provide on-demand hot water without the need for storage tanks is a significant advantage, allowing industries to operate more efficiently and reduce waste. As industries increasingly adopt energy-efficient technologies to meet regulatory standards and reduce operational costs, the demand for industrial electric tankless water heaters is expected to rise significantly.

By Application

Residential:

In the residential sector, electric tankless water heaters are becoming increasingly popular due to their ability to provide an uninterrupted supply of hot water for household needs. Homeowners are drawn to these systems for their energy efficiency, as they only heat water when needed, resulting in lower energy bills compared to traditional water heaters. Additionally, the compact size of these units allows for more flexibility in installation, enabling homeowners to utilize available space more effectively. As more consumers prioritize sustainability and energy conservation in their homes, the demand for residential electric tankless water heaters is expected to grow significantly. The rise in home renovations and improvements further supports this trend, with more households opting for modern, efficient heating solutions.

Commercial:

Commercial applications of electric tankless water heaters are expanding as businesses seek efficient solutions for their hot water requirements. Restaurants, hotels, and other commercial establishments benefit from the continuous supply of hot water these systems provide, thus enhancing customer experience and operational efficiency. As regulations regarding energy consumption and sustainability become stricter, businesses are increasingly investing in electric tankless water heaters as a way to reduce energy costs and maintain compliance. The versatility of these systems allows for easy integration into existing infrastructures, making them an attractive option for businesses looking to upgrade their water heating solutions. Furthermore, the need for quick and reliable hot water in commercial settings is driving the adoption of electric tankless systems across various industries.

Industrial:

In industrial applications, electric tankless water heaters play a critical role in providing hot water for various processes, from manufacturing to cleaning and sterilization. The robustness and efficiency of these systems make them a practical choice for industries that require consistent and substantial hot water supply. As industries strive to optimize their operations and reduce energy consumption, electric tankless water heaters are increasingly viewed as a viable solution. The ability to deliver hot water on demand enhances productivity and minimizes waste, aligning with the broader goals of sustainability that many industries are embracing. The integration of advanced technologies in these systems is further enhancing their appeal, allowing for better control and monitoring of energy usage.

By Distribution Channel

Online Retail:

Online retail has emerged as a significant channel for the distribution of electric tankless water heaters, driven by the growing trend of e-commerce and consumer preference for convenience. Many customers now prefer to shop online for home appliances, including water heaters, due to the ease of comparing products, reading customer reviews, and accessing detailed specifications. E-commerce platforms often provide a wider selection of products at competitive prices, attracting price-sensitive consumers. Additionally, online retailers frequently offer promotions and discounts, further incentivizing purchases. The convenience of home delivery adds to the appeal, allowing customers to receive their purchases without the hassle of transporting bulky items from brick-and-mortar stores. As internet penetration continues to rise, the online retail segment is expected to grow rapidly.

Specialty Stores:

Specialty stores that focus on plumbing and home improvement products are essential distribution channels for electric tankless water heaters. These stores typically offer expert advice and knowledgeable staff who can guide consumers in selecting the right product for their specific needs. The hands-on experience of being able to view and even test the products in-store is a significant advantage that specialty stores have over online retailers. Additionally, these stores often carry a range of brands and models, providing consumers with numerous options to choose from. Many specialty retailers also offer installation services, making it convenient for purchasers to have their new heater installed professionally. As more consumers recognize the benefits of electric tankless systems, specialty stores are likely to remain a popular choice for both purchasing and installation.

Home Improvement Stores:

Home improvement stores serve as a key distribution channel for electric tankless water heaters, providing consumers with access to a wide variety of models and brands under one roof. These large retail formats cater to DIY homeowners and contractors alike, making them a popular destination for purchasing heating solutions. The advantage of home improvement stores lies in their ability to offer complementary products and services, such as plumbing supplies and installation tools, which can enhance the overall shopping experience. Additionally, many of these stores offer workshops and seminars, assisting customers in understanding the installation and maintenance of electric tankless systems. The growing trend of home renovation and improvement projects is likely to continue driving sales through this distribution channel.

Direct Sales:

Direct sales of electric tankless water heaters involve manufacturers or authorized dealers selling their products directly to consumers, often through in-home consultations or trade shows. This distribution method allows for personalized service, enabling sales representatives to assess the specific needs of consumers and recommend suitable products accordingly. Direct sales offer the advantage of providing detailed product information and addressing any concerns or questions consumers may have before making a purchase. Moreover, manufacturers can often provide competitive pricing when selling directly to consumers, reducing the markup typically seen in retail environments. As the importance of customer relationships continues to grow, the direct sales segment is expected to see increased attention from manufacturers and vendors in the electric tankless water heater market.

By Energy Source

Electricity:

The primary energy source for electric tankless water heaters is electricity, which allows for efficient and instantaneous heating of water. Electric tankless systems have gained popularity in both residential and commercial markets due to their energy-saving capabilities and reduced environmental impact compared to traditional gas-fired models. These systems operate using heating elements that quickly warm water as it passes through the unit, providing a continuous supply of hot water without the need for a storage tank. The increasing availability of renewable energy sources, such as solar and wind, aligns with the electric heater market's growth, as homeowners and businesses seek to adopt more sustainable energy practices. Furthermore, advancements in electrical technology, such as smart energy management systems, are enhancing the efficiency and control of electric tankless water heaters, solidifying their position as a preferred choice for modern hot water solutions.

By Region

The electric tankless water heater market is poised for significant growth across various regions, with North America emerging as a dominant player. In North America, the market is propelled by a strong demand for energy-efficient appliances, with the region expected to hold a substantial share due to high consumer awareness and adoption rates. The market in North America is anticipated to grow at a CAGR of 8.5% through 2035, driven by both residential and commercial sectors eager to transition to more sustainable solutions. Additionally, government incentives promoting energy efficiency are encouraging consumers to invest in tankless systems over traditional water heaters. The growing trend of smart homes in the region, along with advancements in technology, further enhances the market landscape.

In Europe, the electric tankless water heater market is also witnessing significant development, primarily driven by stringent regulations aimed at reducing energy consumption and promoting eco-friendly practices. Countries such as Germany, France, and the UK are at the forefront of adopting electric tankless systems, as consumers become increasingly conscious of their environmental impact. The European market is expected to experience a steady growth rate, benefiting from the rising trend of energy-efficient home improvements. Moreover, the integration of electric tankless water heaters into existing infrastructures in both residential and commercial settings is boosting their acceptance across the continent. The growing inclination toward renewable energy sources is a key factor influencing the European market's development, aligning with the region's sustainability goals.

Opportunities

The electric tankless water heater market presents numerous opportunities, particularly as consumer preferences shift towards energy-efficient and environmentally friendly products. The growing trend of smart home technologies is creating avenues for innovation, as manufacturers integrate advanced features such as smart thermostats and mobile app controls into their electric tankless systems. These technologies enhance user experience by allowing consumers to monitor and manage their hot water usage efficiently. Additionally, the increasing focus on sustainable solutions is pushing manufacturers to develop products that align with eco-friendly practices, creating opportunities for market differentiation and expansion. As energy costs continue to rise, consumers will increasingly seek cost-effective solutions to manage their energy consumption, making electric tankless water heaters an attractive choice.

Furthermore, the expansion of the construction and remodeling sectors, particularly in emerging economies, presents significant growth prospects for the electric tankless water heater market. As urbanization continues to drive demand for modern housing, the need for efficient hot water solutions will become more pronounced. New residential and commercial constructions will be more likely to incorporate electric tankless water heaters due to their efficiency, compact design, and modern appeal. Additionally, the rising middle-class population in developing regions is likely to increase overall demand for home appliances, including electric tankless systems. Manufacturers that position themselves strategically in these emerging markets can capitalize on the growing need for energy-efficient water heating solutions.

Threats

• 1 Appendix

  • 1.1 List of Tables
  • 1.2 List of Figures

• 2 Introduction

  • 2.1 Market Definition
  • 2.2 Scope of the Report
  • 2.3 Study Assumptions
  • 2.4 Base Currency & Forecast Periods

• 3 Market Dynamics

  • 3.1 Market Growth Factors
  • 3.2 Economic & Global Events
  • 3.3 Innovation Trends
  • 3.4 Supply Chain Analysis

• 4 Consumer Behavior

  • 4.1 Market Trends
  • 4.2 Pricing Analysis
  • 4.3 Buyer Insights

• 5 Key Player Profiles

  • 5.1 Atmor
    • 5.1.1 Business Overview
    • 5.1.2 Products & Services
    • 5.1.3 Financials
    • 5.1.4 Recent Developments
    • 5.1.5 SWOT Analysis
  • 5.2 Noritz
    • 5.2.1 Business Overview
    • 5.2.2 Products & Services
    • 5.2.3 Financials
    • 5.2.4 Recent Developments
    • 5.2.5 SWOT Analysis
  • 5.3 Raypak
    • 5.3.1 Business Overview
    • 5.3.2 Products & Services
    • 5.3.3 Financials
    • 5.3.4 Recent Developments
    • 5.3.5 SWOT Analysis
  • 5.4 Takagi
    • 5.4.1 Business Overview
    • 5.4.2 Products & Services
    • 5.4.3 Financials
    • 5.4.4 Recent Developments
    • 5.4.5 SWOT Analysis
  • 5.5 Uponor
    • 5.5.1 Business Overview
    • 5.5.2 Products & Services
    • 5.5.3 Financials
    • 5.5.4 Recent Developments
    • 5.5.5 SWOT Analysis
  • 5.6 Ferroli
    • 5.6.1 Business Overview
    • 5.6.2 Products & Services
    • 5.6.3 Financials
    • 5.6.4 Recent Developments
    • 5.6.5 SWOT Analysis
  • 5.7 EcoSmart
    • 5.7.1 Business Overview
    • 5.7.2 Products & Services
    • 5.7.3 Financials
    • 5.7.4 Recent Developments
    • 5.7.5 SWOT Analysis
  • 5.8 Ariston Thermo
    • 5.8.1 Business Overview
    • 5.8.2 Products & Services
    • 5.8.3 Financials
    • 5.8.4 Recent Developments
    • 5.8.5 SWOT Analysis
  • 5.9 GROVE Products
    • 5.9.1 Business Overview
    • 5.9.2 Products & Services
    • 5.9.3 Financials
    • 5.9.4 Recent Developments
    • 5.9.5 SWOT Analysis
  • 5.10 Stiebel Eltron
    • 5.10.1 Business Overview
    • 5.10.2 Products & Services
    • 5.10.3 Financials
    • 5.10.4 Recent Developments
    • 5.10.5 SWOT Analysis
  • 5.11 Paloma Industries
    • 5.11.1 Business Overview
    • 5.11.2 Products & Services
    • 5.11.3 Financials
    • 5.11.4 Recent Developments
    • 5.11.5 SWOT Analysis
  • 5.12 American Water Heaters
    • 5.12.1 Business Overview
    • 5.12.2 Products & Services
    • 5.12.3 Financials
    • 5.12.4 Recent Developments
    • 5.12.5 SWOT Analysis
  • 5.13 Bosch Thermotechnology
    • 5.13.1 Business Overview
    • 5.13.2 Products & Services
    • 5.13.3 Financials
    • 5.13.4 Recent Developments
    • 5.13.5 SWOT Analysis
  • 5.14 Bradford White Corporation
    • 5.14.1 Business Overview
    • 5.14.2 Products & Services
    • 5.14.3 Financials
    • 5.14.4 Recent Developments
    • 5.14.5 SWOT Analysis
  • 5.15 Rheem Manufacturing Company
    • 5.15.1 Business Overview
    • 5.15.2 Products & Services
    • 5.15.3 Financials
    • 5.15.4 Recent Developments
    • 5.15.5 SWOT Analysis

• 6 Market Segmentation

  • 6.1 Electric Tankless Water Heater Market, By Application
    • 6.1.1 Residential
    • 6.1.2 Commercial
    • 6.1.3 Industrial
  • 6.2 Electric Tankless Water Heater Market, By Product Type
    • 6.2.1 Whole House Electric Tankless Water Heater
    • 6.2.2 Point of Use Electric Tankless Water Heater
    • 6.2.3 Portable Electric Tankless Water Heater
    • 6.2.4 Commercial Electric Tankless Water Heater
    • 6.2.5 Industrial Electric Tankless Water Heater
  • 6.3 Electric Tankless Water Heater Market, By Energy Source
    • 6.3.1 Electricity
  • 6.4 Electric Tankless Water Heater Market, By Distribution Channel
    • 6.4.1 Online Retail
    • 6.4.2 Specialty Stores
    • 6.4.3 Home Improvement Stores
    • 6.4.4 Direct Sales

• 7 Competitive Analysis

  • 7.1 Key Player Comparison
  • 7.2 Market Share Analysis
  • 7.3 Investment Trends
  • 7.4 SWOT Analysis

• 8 Research Methodology

  • 8.1 Analysis Design
  • 8.2 Research Phases
  • 8.3 Study Timeline

• 9 Future Market Outlook

  • 9.1 Growth Forecast
  • 9.2 Market Evolution

• 10 Geographical Overview

  • 10.1 Europe - Market Analysis
    • 10.1.1 By Country
      • 10.1.1.1 UK
      • 10.1.1.2 France
      • 10.1.1.3 Germany
      • 10.1.1.4 Spain
      • 10.1.1.5 Italy
  • 10.2 Asia Pacific - Market Analysis
    • 10.2.1 By Country
      • 10.2.1.1 India
      • 10.2.1.2 China
      • 10.2.1.3 Japan
      • 10.2.1.4 South Korea
  • 10.3 Latin America - Market Analysis
    • 10.3.1 By Country
      • 10.3.1.1 Brazil
      • 10.3.1.2 Argentina
      • 10.3.1.3 Mexico
  • 10.4 North America - Market Analysis
    • 10.4.1 By Country
      • 10.4.1.1 USA
      • 10.4.1.2 Canada
  • 10.5 Middle East & Africa - Market Analysis
    • 10.5.1 By Country
      • 10.5.1.1 Middle East
      • 10.5.1.2 Africa
  • 10.6 Electric Tankless Water Heater Market by Region

• 11 Global Economic Factors

  • 11.1 Inflation Impact
  • 11.2 Trade Policies

• 12 Technology & Innovation

  • 12.1 Emerging Technologies
  • 12.2 AI & Digital Trends
  • 12.3 Patent Research

• 13 Investment & Market Growth

  • 13.1 Funding Trends
  • 13.2 Future Market Projections

• 14 Market Overview & Key Insights

  • 14.1 Executive Summary
  • 14.2 Key Trends
  • 14.3 Market Challenges
  • 14.4 Regulatory Landscape

Segments Analyzed in the Report

The global Electric Tankless Water Heater market is categorized based on

By Product Type

• Whole House Electric Tankless Water Heater
• Point of Use Electric Tankless Water Heater
• Portable Electric Tankless Water Heater
• Commercial Electric Tankless Water Heater
• Industrial Electric Tankless Water Heater

By Application

• Residential
• Commercial
• Industrial

By Distribution Channel

• Online Retail
• Specialty Stores
• Home Improvement Stores
• Direct Sales

By Energy Source

• Electricity

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Key Players

• Rheem Manufacturing Company
• Stiebel Eltron
• EcoSmart
• Bosch Thermotechnology
• Noritz
• Uponor
• Takagi
• Bradford White Corporation
• American Water Heaters
• Paloma Industries
• Raypak
• Atmor
• Ferroli
• Ariston Thermo
• GROVE Products