Enjoy complimentary customisation on priority with our Enterprise License!
The Commercial Water Heater market is forecast to increase by USD 2.62 billion at a CAGR of 4.36% between 2023 and 2028. The growth of the market depends on several factors, including increasing demand from the hospitality sector, technological innovations in commercial equipment for heating water, and growing government initiatives promoting the use of energy-efficient heating. Additionally, the water heater market plays a climactic role in meeting the hot water demands of various residential applications such as washing, bathing, cleaning, and cooking. With the global population on the rise and rapid urbanization leading to changing lifestyles, there's a significant increase in the demand for hot water.
To learn more about this report, Download Report Sample
The market share growth of the electric water heater segment will be significant during the forecast period. It has long been used in the Commercial heater sector for heating water. Although they have reached their maturity stage, ongoing innovations in tankless or instantaneous products have revived the market. Furthermore, using electric type is much more cost-effective than using gas as a combustion fuels for heating water.
Get a glance at the market contribution of various segments Request a PDF Sample
The electric water heater segment was valued at USD 5.13 billion in 2018. The lower maintenance cost of compared with gas, coupled with benefits such as flexibility in installation in existing infrastructure, has increased the adoption of these products in commercial buildings. Tankless or instantaneous electric products are ideal for commercial spaces that have space constraints. All such factors drive the growth of electric ones in the commercial sector.
The market is witnessing a shift towards energy-efficient solutions, driven by the need to reduce CO2 emission. Corporate places, healthcare facilities, restaurants, and office buildings in Massachusetts are adopting technologically advanced options like heat pump heaters, which maximize efficiency through heat recovery factors. These systems extract heat from renewable sources and transfer it to the water supply, reducing energy consumption and emissions. Incentives and a growing awareness of the importance of sustainability are encouraging businesses to embrace condensing heat technology, which recovers waste heat from exhaust gases to preheat water. This market transformation is creating a more environmentally friendly future, as businesses seek to minimize their environmental impact while optimizing operational costs in manufacturing facilities and other commercial spaces. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, market trends and analysis, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing demand from the hospitality sector is notably driving market growth. Water heaters in commercial facilities are installed in a large number of bathrooms and the frequency of hot water used is also high. As a result, the energy savings from Water heaters in commercial facilities are higher than in residential buildings. As the frequency of use is high in establishments such as hospitals, hotels, and airports, every watt of energy saved while heating water gets multiplied. So, high energy savings, coupled with increasing investments in new hotels, are key driving factors for the adoption of it in the hospitality sector.
The global increase in tourism is driving the luxury hotel segment. As a result, many global luxury hotel brands are building new hotels to support tourism. Such developments have increased the demand for it in luxury hotels. In addition, luxury hotels, shopping, and entertainment centers, airports, etc. require large amounts of hot water, so the use of electric type not only provides instantaneous water heating but also contributes to significant cost reductions for hotel owners. Hence, increasing investment in hospitality will significantly increase the demand during the forecast period.
Increasing demand for hybrid devices is the key trend in the market. The energy source used by equipment include solar, propane, oil, and electricity for heating water. However, hybrid devices, also called heat pump water heaters, make use of surrounding hot air and transfer the heat to an enclosed water tank. In the case when there is high hot water demand, the equipment automatically switches to a standard resistant electric heating mode.
Hybrid devices can overcome the drawbacks of conventional gas and solar equipment as they use limited energy to heat water. Such features make hybrid equipment more energy-efficient than standalone solar or gas water heaters. In addition, hybrid equipment has features, such as timer mode, which saves energy when the equipment is ideal for a longer period of time. Such factors will increase the market growth and trends during the forecast period.
Technical challenges associated with the products are impeding market growth. The limited lifespan and the risk of explosion in gas equipment are the challenges that hinder the sales of commercial equipment. In the case of gas equipment, leakage in the tank, pipes, or valves, mainly due to high gas pressure, can cause an explosion. Though the commercial sector uses equipment for high-capacity water heating applications, the scope of use of such systems is dependent on the laws and regulations in the country in which the heaters are deployed.
Additionally, governments of various countries are imposing strict guidelines on the production of gas and propane water heaters due to the increased risk of explosion. Failure to adhere to such guidelines will result in large-scale product recalls. All these factors are likely to have a significant impact on sales of gas equipment during the forecast period and the revenues of key vendors in the global commercial equipment market.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Solahart Industries Pty Ltd. - The company offers such as DemandDuo, Tankless Water Heaters as its key offerings. The segment focuses on manufacturing heat equipment such as solar hot systems, thermosiphon roof-mounted systems, synergy heat pumps, streamlined split systems, and central storage collectors.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
For more insights on the market share of various regions Request PDF Sample now!
APAC is estimated to contribute 43% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. APAC was the largest contributing region in the global market and is expected to remain the same during the forecast period. The increase in infrastructure spending on commercial projects drives the demand for water heaters in APAC. The rise in the number of smart city projects in Asia is contributing to the growth of the commercial real estate sector, thereby augmenting the demand for during the forecast period. Most infrastructure projects are targeted at developing roads and bridges, with significant investment in airports, seaports, railways, mass transit, and the development of new cities. For instance, India has planned to invest USD 4.9 billion in infrastructure projects during 2023-2024. Furthermore, smart cities use communication and automation technologies for their smart buildings, which would contribute to the growth of smart water heaters in APAC during the forecast period.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Heat Pump Water Heater Market: Heat Pump Water Heater Market by Application, Type, and Geography - Forecast and Analysis
Instant Water Heater Market: Instant Water Heater Market by End-user, Type, and Geography - Forecast and Analysis
Commercial Water Treatment Equipment Market: Commercial Water Treatment Equipment Market by Application, Type and Geography - Forecast and Analysis
The market is undergoing a transformation driven by the need for energy-efficient solutions and the reduction of greenhouse gas emissions. Companies like Rinnai Corporation are leading the way in developing energy-efficient heaters with advanced control systems and smart controls. These heaters are designed to optimize operational efficiency and reduce energy consumption in various settings such as institutes, offices, salons, SPAs, cafes, schools, colleges, and nursing homes. The market is witnessing a shift towards dual fuel and biofuel heaters, which offer flexibility in fuel type and contribute to a more sustainable energy mix.
Furthermore, building energy performance and insulation are crucial factors in achieving energy efficiency and reducing carbon footprints. Heat pump heaters with high heat recovery factors are gaining popularity due to their ability to extract heat from renewable sources like air or water. The deployment of energy-efficient models with better insulation and advanced control systems, including remote monitoring and internet connectivity, is improving operational efficiency and reducing energy costs. Governments and environmental regulations are driving the adoption of renewable energy and hybrid systems to further enhance energy efficiency and reduce carbon emissions.
Market Scope |
|
Report Coverage |
Details |
Page number |
168 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.36% |
Market growth 2024-2028 |
USD 2.62 billion |
Market structure |
USD Fragmented |
YoY growth 2023-2024(%) |
4.11 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 43% |
Key countries |
China, US, India, Germany, and Japan |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
A. O. Smith Corp., Ariston Holding NV, Bradford White Corp., Daikin Industries Ltd., Electric Heater Co., Electrolux group, Ferroli Spa, Guangdong Vanward New Electric Co. Ltd., Hangzhou Kangquan Water Heater Co. Ltd., Jaquar India, MIDEA Group Co. Ltd., Noritz Corp., Rheem Manufacturing Co., Rinnai Corp., Robert Bosch GmbH, Solahart Industries Pty Ltd., STIEBEL ELTRON GmbH and Co. KG, Vaillant GmbH, Viessmann Climate Solutions SE, and Watts Water Technologies Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Distribution Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Quick Report Overview:
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.