TANKLESS WATER HEATER MARKET ANALYSIS

Tankless Water Heater Market Size and Trends

The tankless water heater market is estimated to be valued at USD 4.11 Bn in 2024 and is expected to reach USD 7.27 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 8.5% from 2024 to 2031.

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The adoption of energy efficient products along with growing construction of green buildings are the major factors driving the demand for tankless water heaters globally. The market is witnessing rising demand for energy efficient and space saving water heating solutions among consumers. Growing environmental consciousness and need for conservation of resources are further boosting the popularity of tankless water heaters. Various government regulations regarding energy efficiency are also fostering the replacement of conventional water heaters with advanced tankless variants.

Drivers of the Market:

Growing energy efficiency concerns

The rising costs of energy and growing concerns over carbon emissions have prompted many homeowners to seek ways to reduce their energy usage and lower utility bills. Tankless water heaters address these needs far better than traditional storage tank models. They are able to heat water on demand only when it is needed rather than continuously maintaining water temperature in a storage tank. This makes them much more energy efficient as heat energy is not lost through the insulated walls of a storage tank. Some tankless water heater models over 30% more efficiency than standard units. As environmental stewardship and sustainable living continue to gain mainstream appeal, the energy savings potential of tankless water heaters becomes an important driver for many consumers. Their lower operating costs have them paying for themselves over time through savings on utility bills. With gas and electricity prices projected to rise further in the coming years amid supply constraints, tankless water heaters offer homeowners a way to minimize the impact of higher energy rates on household budgets.

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Preference for larger homes and bathrooms

The average size of new single-family homes has steadily increased over the past few decades. Homebuyers now commonly seek out spacious floor plans with multiple bathrooms, sometimes even including master baths with soaking tubs and walk-in showers. Larger homes naturally require more hot water, especially when multiple bathrooms need to be used simultaneously. Traditional tank water heaters struggle to keep up with the demand without running out of hot water. Tankless systems solve this problem by being able to produce an unlimited supply. The on-demand heating avoids wasting energy maintaining a reserve and allows the entire home's fixtures to be used together without interruption. Their space-saving wall-mounted compact design is also preferable to homeowners instead of storing an often aging tank in the basement or garage. As builders focus on offering larger luxury features, tankless water heaters become a necessity for reliable hot water supply. Their ability to meet the higher hot water requirements of expansive new homes remains an important consideration for builders and homeowners alike.