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The Commercial Water Heater market is forecast to increase by USD 3.06 billion at a CAGR of 5.25% between 2022 and 2027. 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.
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This report extensively covers market segmentation by type (electric water heater, gas water heater, and solar water heater), distribution channel (offline and online), and geography (APAC, Europe, North America, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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.
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The electric water heater segment was valued at USD 4,913.09 million in 2017 and continued to grow until 2021. 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 increasing demand from the hospitality sector is notably driving the market growth, although factors such as technical challenges associated with the product may impede the market growth. Our researchers analyzed the data with 2022 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 sources 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 demand for hybrid equipment 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.
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APAC is estimated to contribute 49% 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 for energy-efficient water heating equipment is witnessing significant growth driven by the rising demand for smart and modern solutions. With a focus on efficiency improvements, manufacturers are introducing region-specific equipment designed to meet the needs of diverse markets. Instant heating technologies and on-demand heating units are gaining popularity due to their higher efficiency and larger flow rates, catering to both residential and commercial sectors.
The heat transfer process to considering factors like power capacity and storage capacity, manufacturers tailor solutions to suit different requirements. Fuel type is a crucial consideration, especially amidst concerns over the energy crisis. Increasingly, attention is turning towards renewable sources to mitigate energy consumption and reduce environmental impact. For commercial settings such as public buildings, offices, motels, and commercial laundries has initiatives for solar water heating Insulation and green building systems are gaining traction. with efficient water heating installations are imperative to manage commercial water usage and minimize building energy consumption. Technologies such as tank-less heaters and gas-powered heaters are favored for their cost-effectiveness and reliability, with considerations including installation costs, maintenance costs, and lifetime expenses.
Commercial water heater market share is also seeing an uptick, fueled by mandates promoting energy efficiency and product penetration. Businesses and consumers are increasingly adopting energy-efficient equipment and less environmental impact to reduce electricity bills and comply with regulatory norms and policies aimed at reducing carbon footprint. Moreover, green building projects and stringent building codes and standards further bolster the demand for energy-efficient systems and less greenhouse gas emissions. Integrated remote monitoring and automatic control systems are becoming essential features in modern water heating equipment, allowing users to optimize energy usage and enhance overall efficiency. As the emphasis on sustainability grows and sustainable options, the market for energy-efficient water heating solutions is poised for continued expansion, driven by technological advancements and evolving consumer preferences.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Market Scope |
|
Report Coverage |
Details |
Page number |
163 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.25% |
Market growth 2023-2027 |
USD 3,068.01 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
4.48 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 49% |
Key countries |
US, China, India, Japan, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
A. O. Smith Corp., AB Electrolux, Ariston Holding NV, Bradford White Corp., Daikin Industries Ltd., Electric Heater Co., Ferroli Spa, Guangdong Vanward New Electric Co. Ltd., Hangzhou Kangquan Water Heater Co. Ltd., MIDEA Group, Noritz Corp., Rheem Manufacturing Co., Rinnai Corp., Solahart Industries Pty Ltd., STIEBEL ELTRON GmbH and Co. KG, Vaillant Group, Viessmann Climate Solutions SE, Watts Water Technologies Inc., Jaquar Group, and Robert Bosch GmbH |
Market dynamics |
Parent market analysis, Market Forecasting , Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our market research and growth report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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