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Electric Tankless Water Heaters Market

Electric Tankless Water Heaters Market

The market for Electric Tankless Water Heaters was estimated at $1.8 billion in 2024; it is anticipated to increase to $3.0 billion by 2030, with projections indicating growth to around $4.5 billion by 2035.

Report ID:DS2401038
Author:Chandra Mohan - Sr. Industry Consultant
Published Date:May 2025
Datatree
Energy & Power
Power Generation
Electric Tankless Water Heaters
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Report Summary
Table of Contents
Methodology
Market Data

Global Electric Tankless Water Heaters Market Outlook

Revenue, 2024

$1.8B

Forecast, 2034

$4.2B

CAGR, 2024 - 2034

8.9%
The Electric Tankless Water Heaters industry revenue is expected to be around $1.9 billion in 2025 and expected to showcase growth with 8.9% CAGR between 2025 and 2034. The considerable expansion of the market for Electric Tankless Water Heaters is driven by factors such as rising energy efficiency standards and the push for compact designs to save space and promote sustainable living worldwide. Additionally the ongoing technological advancements and the consumer preference, for convenience and cost savings further highlight the importance of this industry in today's context.

Tankless electric water heaters heat water instantly without storing it in a tank as the name implies. They come with benefits like energy efficiency, lasting performance and compact design. These units minimize heat loss when not only in use making them ideal for homes, businesses and industries. The increasing popularity of homes and connected gadgets has driven up the interest, in these high tech devices even more.

Electric Tankless Water Heaters market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2024-2034

Market Key Insights

  • The Electric Tankless Water Heaters market is projected to grow from $1.8 billion in 2024 to $4.2 billion in 2034. This represents a CAGR of 8.9%, reflecting rising demand across Residential Use, Commercial Use and Industrial Use.
  • The market leaders of this industry include Rheem Manufacturing Company and A. O. Smith Corporation and Bosch Thermotechnology Corp which determine its competitive dynamics.
  • U.S. and China are the top markets within the Electric Tankless Water Heaters market and are expected to observe the growth CAGR of 6.5% to 9.3% between 2024 and 2030.
  • Emerging markets including Brazil, India and South Africa are expected to observe highest growth with CAGR ranging between 8.5% to 11.1%.
  • The market for Electric Tankless Water Heaters will receive a $300.0 million boost from Transition like Energy Efficiency Focus by 2030.
  • The Electric Tankless Water Heaters market is set to add $2.4 billion between 2024 and 2034, with manufacturer targeting Commercial & Energy & Power Applications projected to gain a larger market share.
  • With Energy efficiency, and Advanced technology, Electric Tankless Water Heaters market to expand 135% between 2024 and 2034.
electric tankless water heaters market size with pie charts of major and emerging country share, CAGR, trends for 2025 and 2032

Opportunities in the Electric Tankless Water Heaters

Collaborating closely with real estate developers and home appliance sellers well as contractors could result in a significant increase in the demand, for Electric Tankless Water Heaters.

Growth Opportunities in North America and Europe

North America Outlook

North America's demand for electric tankless water heaters has skyrocketed given its strategic commitment to energy-efficiency and sustainable solutions. The stringent regulations imposed by governments to reduce energy consumption has made electric tankless water heaters a preferred choice among North American households. The region is characterized by fierce competition, with leading players such as EcoSmart and Rheem dominating the market. An increased focus on product innovation and customer-centric solutions, along with the trend towards smart homes equipped with IoT integration, are key drivers fueling the growth in this region. The residential sector, due to rising construction activities and a growing number of renovations, represents a significant opportunity in the North American market.

Europe Outlook

In Europe, the electric tankless water heaters market is gaining momentum driven by the increasing pursuit of energy-conserving appliances among European households. Germany, France, and the UK are dominant players in Europe's rising demand for electric tankless water heaters, supported by robust infrastructural development and eco-sustainability mandates. The competition landscape in Europe is marked by the active participation of global brands like Bosch and Siemens. The drivers boosting the market include a strong inclination towards green building initiatives, superior product offerings, and increased awareness about the cost-effectiveness of electric tankless water heaters.

Market Dynamics and Supply Chain

01

Driver: Energy Efficiency, and Reduced Maintenance and Longer Lifespan

Electric Tankless Water Heaters are also well known for their energy efficiency as they heat water directly without the need for a storage tank which reduces energy wastage significantly. With the increasing awareness of energy consumption and environmental effects the efficiency offered by Electric Tankless Water Heaters holds great importance in the market. This innovative technology is also anticipated to see a rise in use, in homes because it provides water instantly when needed, leading to energy conservation. Compared to conventional water heaters, Electric Tankless Water Heaters require less maintenance and have also longer lifespans. This reduction in maintenance needs and the extended service life have also sparked interest in commercial applications where reliability and durability are also essential. As the durability of these heaters continues to improve, commercial sectors such as hotels, hospitals, and restaurants are also expected to show an increased demand for Electric Tankless Water Heaters.
The rise of technologies like self adjustment features and digital temperature regulation in compact and easily controllable Electric Tankless Water Heaters is also fueling the market growth. These innovations enable users to manage the water heater from a distance for added convenience and user also experiences, in smart home settings.
02

Restraint: High Installation Costs

Electric tankless water heaters can be quite pricey to invest in because of their high upfront costs compared to traditional units The installation process, for these heaters is more complex and usually requires professional plumbers or electricians to handle it properly Besides that ensuring that your home is equipped for the advanced features of the heater may involve upgrading your household infrastructure such as installing a higher rated electrical circuit breaker This can drive up the overall costs significantly ، the high initial costs may discourage prospective buyers، particularly those, in price conscious markets، thus impeding the growth of the electric tankless water heater market.
03

Opportunity: Technological Innovations in Energy Efficiency and Tapping into the Green Building Trend

Advancements in technology will keep improving Electric Tankless Water Heaters to be more efficient and long lasting over time for sure! So if companies focus on innovating and developing high tech products through research and development efforts it could give them a competitive edge, in the market race as leaders. Creating products that boost energy efficiency and durability while being user friendly will draw in a wider range of customers thus boosting growth in this market segment.
The rise of conscious building projects opens up a vast unexplored market for Electric Tankless Water Heaters that cater to the trend of sustainable construction practices and energy efficiency priorities in the industry today by providing instant hot water with minimal energy consumption—a perfect fit for eco friendly appliances in contemporary buildings with targeted marketing strategies aimed at this niche could result in substantial market expansion, for brands.
04

Challenge: Energy Consumption Concerns

Energy efficiency is a key concern associated with electric tankless water heaters. Although these units are designed to be resource-conserving by only heating water on-demand, they are heavily electricity-dependent. Depending on their usage intensity and the regions electricity rates, this can result in substantial energy bills, offsetting the advantage of their initial energy-saving proposition.

Supply Chain Landscape

1
Raw Material Procurement

ArcelorMittal

POSCO

2
Manufacturing

Stiebel Eltron

Bosch Thermotechnology

3
Distribution & Logistics

Ferguson

Grainger

4
End User

Residential

Commercial

Industrial

*The illustration highlights the key stakeholders within the supply chain ecosystem.

Applications of Electric Tankless Water Heaters in Residential Use, Commercial Use & Industrial Use

Residential Use

Electric Tankless Water Heaters are primarily used in households due to their compact size and efficient functioning. The mini-tank and point-of-uses are mostly favored for their ability to provide immediate hot water supply without requiring spacious installation region. Companies like Stiebel Eltron and EcoSmart, known for their high-efficient models, dominate the residential category with their dedicated product line featuring advanced technologies such as self-modulation.

Commercial Use

In the commercial sector, electric tankless water heaters are employed in businesses like hotels, restaurants, and hospitals. Here, the whole house with its higher capacity and flow rate is preferred. These units cater to high-demand scenarios while minimising energy costs. Bradford White and Rheem are leaders in this region, delivering robust and durable models that seamlessly comply with commercial standards.

Industrial Use

In the industrial realm, electric tankless water heaters are utilized for a multitude of intensive operations, including boiler applications, sterilization, and manufacturing processes. Here, the heavy-duty is commonly used due to its immense power and water heating capabilities. Key players such as Bosch and A. O. Smith have capitalized on these needs, offering high-performance industrial-grade units equipped with innovative features such as thermal efficiency and long-lasting components.

Recent Developments

November 2024

Rheem Manufacturing Company launched a new series of electric tankless water heaters, known for their advanced energy-saving technology and WiFi-enabled capabilities

September 2024

Stiebel Eltron introduced a breakthrough in its Tempra series of electric tankless water heaters, enhancing efficiency by 15%

July 2024

EcoSmart unveiled a new line of electric tankless water heaters with self-modulating technology and digital temperature control.

The market for Electric Tankless Water Heaters is witnessing significant evolution due to the increasing demand for energy efficient appliances. The rise in energy prices and growing environmental concern have created a substantial growth environment for this sector. Electric Tankless Water Heaters, on-demand or instant water heaters, are growing in popularity due to their energy efficiency and compact size.

Impact of Industry Transitions on the Electric Tankless Water Heaters Market

As a core segment of the Power Generation industry, the Electric Tankless Water Heaters market develops in line with broader industry shifts. Over recent years, transitions such as Energy Efficiency Focus and Integration of Smart Technology have redefined priorities across the Power Generation sector, influencing how the Electric Tankless Water Heaters market evolves in terms of demand, applications and competitive dynamics. These transitions highlight the structural changes shaping long-term growth opportunities.
01

Energy Efficiency Focus

Innovations in electric tankless water heaters have led to increased energy efficiency, making these devices a preferred choice over traditional water heaters. The transition towards higher efficiency has been driven by factors such as environmentally conscious consumers and regulatory standards, placing an emphasis on lowering energy consumption and reducing carbon footprints. The impact of this transition has been farreaching, influencing design and production strategies in the broader home appliance industry. This industry transition is expected to add $300 million in the industry revenue between 2024 and 2030.
02

Integration of Smart Technology

The advent of smart technology in electric tankless water heaters represents another major industry transition. Features such as remote control access, energyuse tracking, and predictive maintenance capabilities have been integrated into new models. This transition has facilitated benefits across multiple industries, inspiring similar technological advancement and digital transformation in other home utilities and appliances, further pushing the boundaries of user convenience and home automation.

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