According to a new report published by Allied Market Research, titled, “Commercial Water Heater Market,” The commercial water heater market was valued at $6.3 billion in 2022 and is estimated to reach $9.9 billion by 2032, growing at a CAGR of 4.6% from 2023 to 2032.
The growth of the global commercial water heater market is majorly driven by growing infrastructure, especially in public and commercial sectors. In addition, the demand for water heaters that are integrated with renewable sources which are both environmentally friendly as well as pocket-friendly has increased considerably owing to several subsidies provided by governments in many countries. Such water heaters help curb carbon emissions that contribute to the net-zero targets of many countries. Moreover, it is a great aid in reducing dependence on electricity derived from fossil fuels. Booming commercial sector and real estate sectors in the Asia-Pacific region and advancements in the current technology is the recent commercial water heater market trends.
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The commercial water heater market is experiencing significant growth, driven by several key trends:
- Surge in Market Value: Valued at approximately USD 8 billion in 2024, the global commercial water heater market is projected to reach USD 15.8 billion by 2034, growing at a CAGR of 7.1% from 2025 to 2034.
- Emphasis on Energy Efficiency and Sustainability: There’s a growing demand for energy-efficient and environmentally sustainable water heating solutions. Manufacturers are developing high-efficiency water heaters to meet stringent energy regulations and cater to eco-conscious consumers.
- Electrification of Water Heating Systems: Regulatory activities are propelling the shift towards electrification and decarbonization in the water heating market. This includes the adoption of electric water heaters and heat pump technologies, which offer higher operational efficiencies and align with global sustainability goals.
- Integration of Smart Technologies: The market is witnessing the integration of smart technologies, such as Wi-Fi connectivity, allowing for remote monitoring, energy usage tracking, and improved maintenance of water heating systems.
- Demand for Compact and Space-Saving Solutions: There’s an increasing preference for compact and space-saving water heater designs, especially in commercial settings where space optimization is crucial.
- Rise of Hybrid Water Heaters: Hybrid water heaters, combining features of tank and tankless systems, are gaining traction due to their flexibility and improved efficiency
The global commercial water heater market size is studied by type, storage capacity, rated capacity, and region. On the basis of type, the market is divided into electric, gas, oil, solar, hybrid, and others. The electric segment dominated the commercial water heater market share in 2022 owing to the higher operational efficiency offered by electric water heaters. Electric water heaters can effectively maintain their temperature and are easier to manage as compared to any other water heater, which fuels their demand across the hospitality sector. In addition, an electric water heater does not burn fuel, thus, it produces fewer emissions. Moreover, they have a prolonged service life as compared to other heaters. Thus, multiple benefits associated with electric heaters contribute toward market growth.
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The commercial water heater market analysis is done across North America, Europe, Asia-Pacific, and LAMEA (Latin America, the Middle East, and Africa). North America dominated the market in 2022, however, Asia-Pacific is expected to grow at a higher CAGR during the projection period. This can be attributed to the surge in demand for commercial real estate in the region as well as infrastructural development in developing economies. The Asia-Pacific is expected to grow at a higher CAGR during the commercial water heater market forecast period owing to the presence of developing economies.
The major players operating in the commercial water heater industry are A.O. Smith Corporation, Danfoss A/S, Mitsubishi Electric Corporation, STIEBEL ELTRON GmbH and Co. KG, NIBE Industrier AB, Carrier Global Corporation, Robert Bosch GmbH, Rheem Manufacturing Company, Bajaj Electricals Ltd., and Bradford White Corporation. Other players in the industry are Racold, Venus, Nortiz Corporation, Daikin Industries, Valliant, and American Water Heaters.
Key findings of the study
- By type, the solar segment is projected to grow at the highest CAGR of approximately 5.0%, in terms of during the commercial water heater market forecast period
- By the storage capacity, the 500-1000 liters segment dominated the commercial water heater market share by over 30% in 2021
- By rated capacity, the 10-50 kW segment is projected to grow at the highest CAGR of approximately 4.7%, in terms of during the commercial water heater market forecast period.
- By region, North America dominated the commercial water heater market and is expected to grow at a CAGR of 4.6% during the forecast period.
