GLOBAL WATER HEATER Market 2022-2028

GLOBAL WATER HEATER Market 2022-2028

Global Water Heater Market Size, Share, & Analysis by Energy Source (Gas Water Heaters, Electric Water Heaters, Hybrid Water Heaters, and Solar Water Heaters), by Water Supply (On-Demand or Tankless Water Heaters and Storage or Tank Water Heaters), and by End Users (Residential, Commercial, and Industrial) Forecast Period (2022-2028)

Market Overview

Water heaters are apparatus that are used for heating and storing hot water which includes water heaters, boilers, and others. Hot water is being used for various domestic purposes such as cooking, cleaning, bathing, and space heating; whereas, in industries, hot water is used to produce steam. Water heaters are the extensively used water heating equipment across the globe owing to various factors favoring their adoption. Water heating is the process of heat transfer to raise the temperature of the water above its normal temperature. The factors supporting the growth of the water heater market are various benefits associated with it such as cost-effectiveness, easy availability, compactness, and efficiency, which further adoption of water heaters across residential, commercial, and industrial end-use. The global water heater market is anticipated to grow at a CAGR of 5.7% during the forecast period (2022-2028). The market value was around $26.9 billion in 2021 and is estimated to reach nearly $39.7 billion in 2028. As per the Environmental Protection Agency (EPA), water heating accounts for around 20% of residential energy consumption, which makes it the third-largest energy end-user across the homes, behind heating and cooling and kitchen appliances in the US. The percentage of energy used for water heating steadily increases as homes become more energy-efficient over the period.

The global water heater market has been segmented on the basis of energy source, water supply, end-users, and regions. Based on the energy source, the market has been segmented into the gas, electricity water heater, hybrid heater, and solar water heater. In 2021, the electric water heater segment market value was valued at $18.9 billion which is further estimated to reach $27.7 billion in 2028, growing at a CAGR of 5.6% over the forecast period. The growth of the segment is due to the growing adoption of electric water heaters across the globe. Electric water heaters are more energy-efficient which aids in curbing the additional cost of the consumer. Followed by, the gas energy source segment, which is estimated to hold the second-largest market share of $4.9 billion in 2021 and is projected to reach $6.1 billion in 2028. However, the solar water heater segment is estimated to be the highest growing segment at a CAGR of 12.6% over the forecast period. As the economies across the globe are struggling to cope-up with climate change, there has been a major focus to shift from non-renewable energy sources to renewable energy sources. This will lead to the highest growth of the solar energy source segment over the forecast period.

On the basis of water supply, the market has been classified into on-demand or tankless water heater and storage or tank water heater. The storage or tank water heater segment is estimated to dominate the market contributing nearly 65.2% in 2021. The market value of the segment was $17.5 billion in 2021 and is estimated to reach nearly $24.0 billion in 2028 at a CAGR of 4.6% over the forecast period. Demand for water heaters with a storage tank is rising as they are more economical compared to the tankless water heater. However, the on-demand or tankless water heater has been projected to grow at the highest CAGR of 7.7%. The segment is estimated to reach nearly $15.8 billion in 2028 from $9.4 billion in 2021, owing to the growing demand for compact electronic devices. Moreover, tankless water heaters are highly efficient and have lower operating costs than storage or tank water heaters.

Geographically, the market has been analyzed into North America, Europe, Asia-Pacific, and the Rest of the World. These regions contribute significantly towards the growth of the market. Asia-Pacific is estimated to dominate the market in 2021 and is continuing to do so over the forecast period. The market value of the Asia-Pacific water heater market is estimated to reach $13.2 billion in 2028 at a CAGR of 6.8% over the forecast period from $8.3 billion in 2021. Asia-Pacific homes were nearly two-thirds of the global population which has led to the significant demand for water heaters across the region. Moreover, rising disposable income, rapid urbanization, and government support to install water heaters are also fueling the Asia-Pacific water heater market over the forecast period. Further, several government initiatives such as the offering of subsidies and others are driving the growth of the market across the region. The Indian Government offers a subsidy of nearly 30% to 60% to water heater consumers based on the category of users and states. In addition, the Ministry of New and Renewable Energy (MNRE) provides subsidies and incentives to users to use solar water heaters. The government through its nodal agencies and channel partners provides 30% of cost subsidy to consumers in general category states. The scheme provides a 60% subsidy on special category states like the North-East states, Hilly area states, and islands.

The global water heater market is fragmented in nature with several players operating in the market. Some of the market players operating in the global water heater market are A.O. Smith, Rheem Manufacturing Corp., Bajaj Electrical Ltd., Haier Group Corp. among others. These players adopt various strategies such as mergers and acquisitions, product launches, geographical expansion, and partnerships and collaborations to sustain themselves in the competitive market. For instance, in August 2021, A.O. Smith launched MiniBot which is a 3-liter instant water heater with a unique design and advanced technology. Through this product launch, the company aims to expand the product portfolio of its water heater category globally. Furthermore, in January 2021, Ariston Thermo SpA acquired Calorex, a company based in Mexico that provides water heating solutions for commercial and residential purposes. This acquisition enabled the company to expand its products portfolio and also expand its footprint in Mexico. Moreover, in January 2021 Noritz Corp. acquired PB Heat Company which is Bally, the Pennsylvania-based company. The company is the manufacturer of high-efficiency steel and iron boilers and manufacturer of indirect-fired water heaters. Through this acquisition, the company aimed at increasing its product portfolio, and working effectively in a competitive environment.