Commercial Water Heater Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2024-2032, Segmented By Type (Electric Water Heaters, Gas Water Heaters, Heat Pump Water Heater, Solar Water Heaters, and Others (Oil Water Heaters, Bio-Fueled Water Heaters, etc.)), By Product Type (Instant, Storage), By Storage Capacity (Less Than 50 Liters, 51-100 Liters, 101-300 Liters, 301-500 Lit

The global commercial water heater market growth is driven by continuous technological changes in order to reduce energy consumption, increasing commercial construction activities, and demand for solar powered water heaters. As the demand for solar powered water heaters are highly preferred in hospitals as there is a constant need for hot water and it is also energy efficient.

Commercial water heaters come in a variety of forms which can heat water for drinking as well as for heating spaces for waters such as pool. Similarly, a commercial space like office buildings, which normally requires limited hot water might require less capacity of water heater, as compared to hotels, condominiums, and hospitals which may use large volumes of water, which may require big capacity water heaters.

To meet the demands of various businesses, commercial water heaters come in a range of various sizes and designs. In the commercial water heater market the tank-style water heaters are also known as instant water heater, which keeps hot water in a big tank and releases it as needed, is the most preferred kind of commercial water heater.

Due to the intensifying market rivalry vendors are being forced to implement various strategies to gain competitive advantage, such as promotional efforts and spending on advertising, to increase the exposure of their services. In order to remain competitive and register a significant market growth, several suppliers are also implementing inorganic growth tactics such as M&As. For instance, in 2021, A. O. Smith Corporation, a leading provider of water technology, announced that it had acquired Giant Factories, Inc, a Canadian company that makes residential and commercial water heaters, for approximately USD192 million.

The global commercial water heater industry's potential will also be strengthened by an increasing shift toward sustainable infrastructures combined with point-of-use applications of improved heating systems in educational institutions and other commercial infrastructures. The market dynamics will be sparked by a paradigm shift toward the adoption of zero greenhouse emission solutions in conjunction with the demand for affordable hot water solutions.

The COVID-19 pandemic has had a significant negative influence on the expansion of the commercial water heater market. The pandemic placed every nation in an entirely unknown position. The commercial water heater market has been negatively impacted by factors such as restrictions on product delivery, alterations to manufacturing and supply chains, and governmental shutdown orders.

A.O. Smith projected that the delays brought on by the COVID-19 impact have resulted in a decrease of roughly 4% in volumes for the commercial heater business.

Energy Saving Properties of Instant Heater is Fueling the Market Growth

when heating 100 gallons of water, an energy-efficient tankless system uses 22% less electricity than a conventional heater, if more than 86 gallons of water may be heated with 8–14% more energy efficiency

Increasing Use of Heat Pump Water Heaters is Fueling the Market Growth

While using 20% to 33% electrical energy for the heat pump compressor, air source or water source heat pumps use 66% to 80% of the heat from renewable sources to heat the water.

Rising Investment from Companies is Aiding the Market Growth

Increased funding for R&D (Research and Development) and other projects is expected to quicken the market expansion for commercial water heaters. Growing demand for on-demand heating in a range of locations, such as hotels, restaurants, resorts, and airports, along with expanding consumer knowledge of modern & advanced products, is expected to improve the industry outlook. For instance, in 2022, Bosch plans to invest around USD 300 million in the heat-pump market and anticipates that the market would expand by 15 to 20% yearly by 2025.

Increasing Support for Solar Water Heater is Driving the Market Growth

Commercial facilities use water heaters more frequently for a variety of functions, which leads to the higher demand for hot water. Thus, to accommodate this, running cost gets increased, if electric or gas water heaters are used continuously or more frequently. This is one of the reasons for the shifting demand toward solar water heater in various countries. Governments of different nations are encouraging consumers and taking initiatives to support solar water heaters. For instance, there is a constant and significant need for water heaters because of the climatic conditions of New Zealand. The New Zealand government launched campaigns promoting the use of renewable energy sources to support both the environment and individual electricity bills in an effort to promote and lower the cost of electricity with the help of the energy efficiency and conservation authority. To save electricity, New Zealand’s government is supporting the people to install more solar powered water heaters.

Rising Innovation is Driving the Market Growth

There is generally a need for water heaters in colder regions, because of which manufacturers of water heaters are focusing on offering such water heaters which are suitable for extreme cold conditions. For instance, Rheem and Sanden's joint venture is offering a water heater under the "EcoPlus Hot Water Heat Pump System" that works at temperatures as low as -10 degrees Celsius. Diakin is also selling a similar product that works in temperatures as low as -15 degrees Celsius. These are the key elements that will have a significant impact on the demand for these products during the forecasted timeframe.

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Market Segmentation

The global commercial water heater market is segmented based on type, product type, storage capacity, application, distribution channel, region, and competitional landscape. Based on type, the market is further segmented into electric water heaters, gas water heaters, heat pump water heaters, solar water heaters, and others (oil water heaters, bio-fueled water heaters, etc.). Based on product type, the market is segmented into instant storage. In terms of storage capacity, the market is divided into less than 50 liters, 51-100 liters, 101-300 liters, 301-500 liters, and more than 501 liters. Based on application, the market is divided into condominium, salon/parlor, hotels & resort, healthcare, education, others (colleges/universities, offices, etc.). On the basis of sales channel, the market is segmented into direct sales, dealers/agents, retailers, online, and others (plumbers, contractors, etc.). On the basis of region, the market is divided into North America, Europe, Asia-Pacific, South America, and Middle East & Africa.

On the strength of rising demand for energy-efficient products and renewable energy sources, as well as the increasing presence of commercial water heater market players in the region, the market in the Asia Pacific is predicted to experience notable growth over the forecast period. For instance, China consumed about 7.8 exajoules of energy in 2021, making it the largest consumer of renewable energy in the Asia-Pacific region. India, on the other hand, came in second place, using about 1.4 exajoules of energy.

In addition, given the North America’s high consumer spending, rising installation of instant water heating systems, and expanding piped gas networks, it is anticipated that this region will hold the largest share during the forecast period. The economic changes that result in a vast electricity distribution network are anticipated to spur market growth in the region in the future.

Company Profiles

A.O. Smith Corporation, Bosch Thermotechnik GmbH, Daikin Industries, Ltd., Ingersoll Rand Inc., Midea Group, Mitsubishi Electric Corporation, NIBE Energy Systems Limited, RHEEM Manufacturing Company, Valliant Group, Viessmann Group,