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Commercial Water Heater Market size was valued at more than USD 6 billion in 2021 with an annual installation to exceed 4 million units by 2028. In terms of revenue, the market is anticipated to grow at 4.1% CAGR while recording a volume of 4.2% volume. Increasing consumer spending in research, design & development to develop and introduce smart & technically advanced water heating equipment along with strong development of the service sector is set to increase the market share.
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The introduction of stringent government norms and directives toward the adoption of energy-efficient heating devices, considerable reduction in electricity bills will encourage the commercial water heater market growth. Furthermore, the rapid expansion of the high-rise buildings driven by various foreign investments is anticipated to influence the product demand.
Shifting consumer focus toward the advantages of water heaters along with surging demand from the hospitality sector will affect the commercial water heater demand. In addition, the shifting momentum of the industry manufacturers toward the development of region-specific equipment will strengthen the business landscape.
Report Coverage | Details |
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Base Year: | 2020 |
Market Size in 2020: | USD 6.4 Billion |
Forecast Period: | 2021 to 2028 |
Forecast Period 2021 to 2028 CAGR: | 4.1% |
2028 Value Projection: | USD 8.5 Billion |
Historical Data for: | 2016 to 2020 |
No. of Pages: | 1,000 |
Tables, Charts & Figures: | 2,172 |
Segments covered: | Product, Capacity, Application, Energy Source |
Growth Drivers: |
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Pitfalls & Challenges: |
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The COVID-19 pandemic may impact the overall production of water heaters owing to various restrictions imposed in various countries. The shutdown of various component manufacturing facilities in the emerging economies on account of supply chain disruptions, lower availability of workforce, and minimum on-site operations will further result in a decline in product installation. However, upliftment of lockdown, restart of commercial activities, and constant requirement for strategies to respond to the existing crisis will positively influence commercial water heater market share.
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Rising investments toward Research, Design and Development (R, D&D) activities is set to accelerate the commercial water heater market growth. Rising requirement for on-demand heating in various establishments comprising shopping complexes, airports among others coupled with growing consumer awareness toward modern & advanced products is set to strengthen the industry outlook. For instance, A.O. Smith, in 2020, the leading water heating and treatment manufacturer, launched its gas tankless product line. The system is equipped with X3 scale prevention technology, thus enhancing the lifespan and product performance.
The gas water heater market was valued at over USD 1 billion in 2021. Growing need to address the peak hour hot water requirement across the existing commercial building infrastructure along with the timely availability of supply is projected to influence the product penetration. Replacement and refurbishment of the conventional heating equipment coupled with rising requirement for significant savings in the electricity bills will further augment the business landscape. Ongoing expansion of the piped gas networks across the emerging countries will further lead to widespread adoption of the gas water heater.
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Ongoing government norms and mandates for the installation of energy efficient heating units is set to augment the commercial water heater market growth. Swift shift in the focus of the industry players to adhere to the existing standards will drive the product adoption. Furthermore, increasing demand from off grid markets, integration with local manufacturers to suit the customer requirements coupled with evolving trends of manufacturers focused specifically on product differentiation is set to augment the industry share.
Instant water heater market is set to grow owing to the ongoing commercial infrastructure development specifically across the evolving countries. Rising demand of heating equipment across various commercial establishments consisting of hospitals, hotels along shopping complexes will strengthen commercial water heater market landscape. The high replacement charges and installation cost, combined with its inability to be used simultaneously for different operations give its substitutes an edge over the product. However, the heating system can save nearly 24-34% on energy costs.
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Latin America, Europe, and Asia Pacific contribute to over 60% of the revenue share in 2021 and will continue to dominate the industry in the forecasted timeline. Increased customer spending, shifting consumer trend toward smart appliances coupled with growing investments by the government to enhance the infrastructure development in the emerging countries of the region will strengthen the market growth. Economic transformations owing to extensive electricity distribution network in both remote and rural areas will further fuel the product deployment.
In Latin America, Mexico and Brazil accounted for over 85% of the market share in 2021. Expansion of the piped gas networks in different countries of the region coupled with rising requirement for on demand heating by the manufacturing industries will augment the commercial water heater market revenue. Growing installation of instant water heating systems across various commercial establishments owing to product longevity and higher efficiency will strengthen the industry landscape.
New product design & development by the manufacturers are equipped with various smart features comprising Wi-fi connection, leakage detection, and remote monitoring. For instance, Bradford White Corporation, in 2021, acquired Keltech to expand its portfolio in commercial & industrial electric products to meet the rising needs of a wider customer base and support them in the adoption of electrification initiatives throughout North America.
Moreover, inorganic joint ventures along with the leading technology providers is set to influence the industry landscape. For instance, Rheem Manufacturing, subsidiary Paloma Rheem Global acquired Intergas, in 2019, to augment its prevalent customer base in Europe.
The key players operational in commercial water heater industry include A.O Smith, Bradford white Corpration, Whirlpool Corporation, Bosch Thermotechnology, Ferroli, State water heaters, Rinnai Corporation, Rheem Manufacturing, Noritz Corporation, Ariston Thermo, and Haier Electronics amongst others.
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