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 Summary
Market Data
Methodology
Table of Contents
Global Electric Tankless Water Heaters Market Outlook
Revenue, 2024
$1.8B
Forecast, 2034
$4.2B
CAGR, 2025 - 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.
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.
Rheem Manufacturing Company, A. O. Smith Corporation, Bosch Thermotechnology Corp. are among the leading players in this market, shaping its competitive landscape.
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%.
Transition like Energy Efficiency Focus is expected to add $135 million to the Electric Tankless Water Heaters market growth 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 Application 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.
Opportunities in the Electric Tankless Water Heaters
Collaborating closely with real estate developers and home appliance sellers well as contractors could also result in a significant increase in the demand, for Electric Tankless Water Heaters.
Growth Opportunities in North America and Europe
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.
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: Rising Residential Electrification and Growing Preference for Energy Efficient Appliances
The accelerating shift toward residential electrification is also a significant driver for electric tankless water heaters. Governments and utilities are also promoting all electric homes to reduce dependence on fossil fuels, encouraging homeowners to replace gas fired systems with electric alternatives. This transition is also particularly visible in urban housing projects and green building developments where electrical infrastructure is also prioritized. At the same time, growing consumer awareness of energy efficiency is also reinforcing demand. Electric tankless systems eliminate standby heat losses associated with storage tanks, heating water only when required. also advances in high efficiency heating elements, smart flow sensors, and digital temperature modulation have also improved performance while lowering operational costs. The integration of these units with home energy management systems and rooftop solar installations further strengthens their appeal. Together, electrification policies and efficiency driven purchasing behavior are also creating sustained growth momentum in the residential segment.
The increasing demand for compact and modular hot water systems in commercial buildings is also another major market driver. Hotels, healthcare centers, educational institutions, and quick service restaurants require reliable and scalable hot water delivery without sacrificing valuable floor space. Electric tankless water heaters meet this requirement through wall mounted, modular configurations that can also be installed in cascades to match varying load conditions. Technological improvements in three phase systems and digital load balancing enable consistent temperature control during peak demand periods. Additionally, reduced maintenance needs and longer service life compared to conventional storage systems support lower lifecycle costs. As commercial infrastructure modernizes and prioritizes operational efficiency, these advanced tankless solutions are also gaining strong adoption across diverse end use sectors.
02
Restraint: High Upfront Costs and Installation Complexity Limit Adoption Among Budget-Conscious Users
Electric tankless water heaters often have higher upfront costs compared to traditional tank systems, posing a barrier for price sensitive residential and small commercial buyers. The specialized electrical infrastructure, such as upgrading panel capacity or wiring to support high kilowatt demand, increases installation complexity and expenses. For example, older homes may require costly electrical upgrades before a tankless system can be installed, delaying purchase decisions or diverting demand to cheaper storage alternatives. These cost hurdles can suppress short term revenue growth and reduce adoption rates, especially in emerging markets where installation expertise and financing options remain limited.
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: Grid Capacity Constraints and Performance Limitations Challenge Large Scale Deployment
In regions with limited grid capacity or unstable electrical infrastructure, electric tankless water heaters face practical restraints that hinder widespread market expansion. High instantaneous power draw during peak hot water demand can overload local circuits, leading to outages or reduced performance. Commercial facilities with simultaneous multi outlet needs may experience inconsistent temperature output unless costly three phase systems are deployed. For instance, facilities in areas with frequent voltage fluctuations may avoid electric tankless solutions, opting instead for gas fired or hybrid systems, thereby restraining segment growth and altering demand dynamics in power constrained markets.
Supply Chain Landscape
1
Raw Material Procurement
ArcelorMittalPOSCO
2
Manufacturing
Stiebel EltronBosch Thermotechnology
3
Distribution & Logistics
FergusonGrainger
4
End User
ResidentialCommercialIndustrial
1
Raw Material Procurement
ArcelorMittalPOSCO
2
Manufacturing
Stiebel EltronBosch Thermotechnology
3
Distribution & Logistics
FergusonGrainger
4
End User
ResidentialCommercialIndustrial
Use Cases of Electric Tankless Water Heaters in Residential Use & Commercial Use
Residential Use : In residential settings, electric tankless water heaters are increasingly preferred for their compact design and energy efficiency. Most homes use point of use or whole house electric tankless systems depending on household size and hot water demand. Point of use units are commonly installed under sinks or near showers to provide instant hot water to a single fixture, reducing heat loss and water wastage. Whole house models with higher kilowatt ratings are suitable for apartments and independent homes, ensuring continuous hot water for multiple outlets. Their on demand heating mechanism lowers standby energy losses, making them ideal for modern energy conscious households and smart home integrations.
Commercial Use : Commercial applications such as hotels, restaurants, offices, and healthcare facilities rely on high capacity electric tankless water heaters to meet consistent and simultaneous hot water requirements. In this segment, three phase electric tankless systems are widely used due to their ability to handle heavy flow rates and continuous operation. These systems are often installed in modular cascades to ensure redundancy and scalability. Their space saving design benefits facilities where mechanical room space is limited. Additionally, the precise temperature control and reduced maintenance requirements make them suitable for environments that demand hygiene, operational efficiency, and lower lifecycle costs.
Industrial Use : In industrial environments, electric tankless water heaters are deployed for process heating, equipment cleaning, and specialized manufacturing operations. Heavy duty and high kilowatt industrial grade tankless units are most commonly used, designed to deliver precise temperature output and withstand demanding operating conditions. Industries such as food processing, pharmaceuticals, and light manufacturing prefer these systems for their rapid heating response and consistent performance. Since they eliminate the need for large storage tanks, they reduce energy consumption and floor space utilization. Their ability to provide on demand hot water enhances productivity while supporting sustainability and energy management objectives.
Recent Developments
Recent developments in electric tankless water heaters show a clear shift toward energy efficient on demand hot water solutions driven by smart home integration and stricter energy codes. Manufacturers are focusing on compact retrofit systems, advanced smart controls, and predictive diagnostics to improve performance and reduce maintenance. A key trend is the adoption of IoT enabled units that allow remote temperature adjustment and usage tracking, enhancing user convenience and cost savings. This evolution is expanding market appeal across residential and light commercial segments.
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.
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.
02
Integration of Smart Technology
The integration of smart technology into electric tankless water heaters marks a significant digital transformation within the water heating industry. Modern units now feature Wi Fi connectivity, mobile app control, real time energy consumption monitoring, and predictive maintenance alerts. These advancements enable homeowners and facility managers to optimize energy usage, detect performance issues early, and reduce downtime. For example, in smart homes, tankless heaters can sync with home automation systems to adjust temperature settings based on occupancy patterns, lowering electricity costs. In the hospitality sector, centralized monitoring improves operational efficiency across multiple rooms. This transition is also influencing adjacent appliance markets, encouraging similar connectivity upgrades in HVAC systems, heat pumps, and smart plumbing controls.