TANKLESS WATER HEATER MARKET ANALYSIS

Higher installation cost than traditional tank heaters is one of the major factors restraining the growth of the tankless water heater market. Tankless water heaters require significant modification and renovation of the existing water supply and heating system in the house or building as compared to conventional tank heaters. The high additional costs associated with installing a tankless heater deter many potential customers. It requires installing new gas lines or electric circuits with higher capacity, flues or vents depending on fuel type, and mounting the unit itself which takes more time and efforts than a simple drop-in replacement of a tank heater. Some homes with older distribution systems may even require partial re-piping of the existing water lines to optimal gas pressure levels. All these factors contribute to nearly 4-5 times higher installation expenses for tankless systems. This significant premium that customers have to bear to switch from a tank to a tankless system poses a major adoption barrier, especially for replacing functioning tank heaters.

Market Opportunities: Product innovation

Product innovation has the potential to be a huge driver of growth in the tankless water heater market. As concerns over energy efficiency and environmental sustainability continue to rise globally, tankless water heaters are increasingly becoming the preferred choice over traditional tank water heaters. Tankless water heaters provide a significant reduction in energy usage as they heat water only as it flows through the system versus keeping a large tank continuously heated. As consumers become more educated on the cost and carbon footprint savings of tankless water heaters, product innovation that further improves their energy efficiency could help accelerate adoption rates.