Gas Water Heater Market Size - By Product, By Application, By Capacity, By Fuel, Forecast, 2025 – 2034

Gas Water Heater Market Size

The global gas water heater market size was valued at USD 9.8 billion in 2024 and is estimated to grow at a CAGR of 6.7% from 2025 to 2034. Ongoing initiatives by various entities to boost the energy efficiency of their products, coupled with user-friendly interfaces that simplify access to temperature settings and diagnostic data, are set to bolster the industry's prospects. Additionally, the regular rollout of cutting-edge solutions such as Wi-Fi connectivity, remote monitoring, and voice control by key industry players, underscores a pronounced focus on both business and product expansion.
 

Gas water heaters are preferred due to their energy efficiency and cheaper running costs when compared to their electrical counterparts, particularly in places where natural gas is less expensive than electricity. The use of gas water heaters is greatly impacted by the existence of natural gas infrastructure. Countries comprising of Argentina, Mexico, and Brazil have extensive gas networks, leading to higher product adoption. For instance, In January 2022, Rheem manufacturing acquire DEJONG, Manufacturer and supplier for stainless steel hot water tanks. This will support the company reduce its dependance on carbon fuel sources expanding the presence of DEJONG outside of North America and Europe.
 

Ongoing deployment across applications utilizing large hot water requirement including hotels, hospitals and residential communities will drive gas water heater market growth. Key factors including the ability to handle large volumes and high heating output makes them feasible for various commercial applications. Their demand is amplified over the years owing to clean combustion and limited emissions in comparison to other fuels.
 

Gas Water Heater Market Trends

• On-demand hot water convenience, combined with smart features and environmental considerations, is set to boost the adoption of gas water heaters across diverse applications. The integration of advanced safety features, such as flame failure detection, overheat protection, and air quality sensors, will enhance product penetration. Homeowners and businesses are increasingly replacing their older, less efficient gas water heaters with newer, energy-efficient models, further fueling industry growth. Additionally, emerging markets are witnessing a surge in demand for gas water heating solutions.
   
• Optimized performance coupled with ongoing research and development activities and increasing accessibility to gas pipeline networks, will drive the industry growth. For instance, in January 2022, GE Appliances, introduced its first atmospheric gas water heater, RealMAX. The line offers the product in varying 30-, 40- or 50-gallons capacity ranges. Heightened investments by key players in innovations aimed at boosting efficiency and energy savings are poised to expand the gas water heater market size.
   
• Increasing rollout of incentives to boost smart appliance usage, coupled with stringent government mandates and policies, is set to shape the industry's landscape. Moreover, as urbanization surges and consumers increasingly lean towards energy-efficient technologies, is poised to enhance the product penetration. In April 2022, Bradford White announced the launch of a specified RIB Speclink, a cloud-based solution that connects the product manufacturers with the design and construction professionals.
   

Gas Water Heater Market Analysis

• The global market for gas water heater was valued at USD 8.8 billion, USD 9.3 billion and USD 9.8 billion in 2022, 2023 and 2024 respectively. Based on product, the gas water heater industry is segmented into instant and storage. The instant segment is projected to reach more than USD 6 billion by 2034.
   
• Increasing consumer focus to favor appliances that conserve energy and reduce utility bills coupled with competitive pricing and a range of capacities, will surge the business potential. Smart city construction projects, prioritizing environmental concerns and adhering to regulations for low NOx emissions, are set to energize business dynamics. Additionally, these products are tailored to ensure a consistent supply, especially in areas prone to power outages, further steering industry trends.
   
• The storage segment will grow at a CAGR of over 6.5% through 2034 on account of active promotions for the development of gas supply and distribution network under smart city projects. Key benefits comprising ability to heat large water quantities in short duration and low operating cost have enhanced their adoption. Moreover, accessibility of natural gas on account of expansion of the piped natural gas (PNG) connections has significantly enhanced the adoption of gas units. For instance, in May 2022, State Industries, announced the introduction of X3 Scale Prevention Technology to add to its full line of residential condensing gas tankless water heaters.
   

• Based on application, the gas water heater market is segmented into residential and commercial. The residential segment accounted for 74.9% market share in 2024 owing to growing requirement of hot water across kitchen and bathrooms and raising awareness of the product benefits comprising low power consumption, reduced heating bills and efficient performance.
   
• Ongoing expansion of the residential communities coupled with the development of the zero emission and green buildings is anticipated to augment the product adoption. Key innovations including remote monitoring, improved user interface, leak detection and voice command activation has augmented the industry landscape. In May 2022, GE Appliances opened its USD 70 Million water heater manufacturing plant In South Carolina. The plant is vertically integrated and is set to produce units starting from coils of steel into high quality water heaters designed primarily for residential purposes across the U.S.
   
• The commercial segment is set to grow at a CAGR of over 7.5% through 2034. Major players in the market are increasingly focusing on strategic growth ventures and alliances, coupled with smart product innovations, to diversify their product portfolios, shaping the business outlook.
   
• Additionally, the widespread rollout of city gas distribution projects and pipeline networks, combined with stringent norms aimed at achieving high efficiency standards, is poised to boost the product demand. In September 2021, Rinnai America Corporation acquired Industrias Mass, S.A. de C.V., a manufacturer of commercial water heaters based in Mexico. Growing Central Gas Distribution (CGD) projects, which enhance fuel availability coupled with rising awareness of smart appliances aimed at curbing the growing carbon footprint will complement the industry landscape.
   

• The U.S. gas water heater market amounted to USD 1.7 billion, USD 1.8 billion and USD 1.9 billion in 2022, 2023 and 2024 respectively. North America accounted for 25% market share on account of increasing environmental awareness and stringent government regulations.
   
• The introduction of stricter energy consumption standards drives competition in terms of innovation and performance. Shift toward water heaters with Wi-Fi connectivity, remote controls, and integration with home automation systems along with growing focus on sustainability, producing gas water heaters with environmentally friendly materials and low emissions will augment the industry landscape. In addition, consumers are increasingly seeking gas water heaters that offer long-term reliability, lower operating costs, and reduced environmental impact, influencing the business statistics.
   
• Europe gas water heater market will reach more than USD 2.5 billion by 2034, on account of increasing emphasis on energy efficiency and environmental sustainability. Consumers are becoming more inclined towards solutions that offer long-term energy savings and align with environmental goals. For instance, in 2024, Germany introduced mandates for all newly installed heating systems to derive at least 65% of their energy from renewable sources.
   
• Asia pacific will grow at more than 6.5% CAGR till 2034 on account of enhanced economic growth, urbanization, energy efficiency initiatives, and consumer preferences. Rapid urbanization and the expansion of residential and commercial infrastructures have increased the demand for efficient water heating solutions, including gas water heaters. For example, in 2024, Japan and South Korea had nearly 92% population residing in urban areas. Further, significant government backed investments for establishing the gas pipeline infrastructure across emerging nations will facilitate the business growth.
   
• The Latin America gas water heaters market is driven by rapid urbanization and the expansion of residential and commercial infrastructures. Consumers are increasingly prioritizing energy-efficient appliances to reduce utility costs and environmental impact. Policies promoting energy efficiency and the adoption of environmentally friendly technologies are encouraging consumers to consider gas water heaters as viable options. To cite an instance, IEA 2024, recommends that governments implement MEPS for building components and systems, including hot water systems, to improve overall energy performance.
   

Gas Water Heater Market Share

• The top 5 players operating in the gas water heater industry include AO Smith, Rheem Manufacturing, BDR Thermea, Bosch, and Ariston Thermo contributing to over 40% market share. Technological developments, established brands, legislative changes and consumer expectations will impact the competitive environment for gas water heaters.
   
• Many producers compete on pricing by providing a wide selection of products at different price points in an effort to appeal to both budget-conscious and luxury consumers. Significant competitors are making investments to create goods that are more robust and energy efficient. Excellent warranties, installation services and customer support are significant perks that will increase brand loyalty.
   
• Lennox International is leading the world in production, development and distribution of a wide variety of climate control products that are used for refrigeration, cooling, heating and ventilation. The business had over 11,000 employees and over USD 4 Billion in revenues yearly, as of 2024. Additionally, during installation week, in October 2024, the business gave away 413 heating and cooling units to worthy households as a part of its Feel the Love initiative.
   
• Rheem Manufacturing specializes in heating, cooling, water heating, pool/spa heating, and commercial refrigeration products. The company operates in 14 countries and has employed more than 13,000 individuals globally. In September 2024, the company completed the commercial installation of Rheem Tankpak Series 3, which includes multiple continuous flow gas water heaters designed to provide efficient and reliable hot water for large-scale applications.
   

Gas Water Heater Market Companies

Eminent players operating in the gas water heater industry are:

• American Water Heater
• Ariston Thermo
• A. O. Smith
• BDR Thermea Group
• Bosch Thermotechnology Corp.
• Bradford White Corporation
• FERROLI S.p.A
• Hubbell Heaters
• Havells India Ltd.
• Haier Inc.
• Lennox International Inc.
• Noritz Corporation
• Parker Boiler Company
• Rheem Manufacturing Company
• Rinnai America Corporation
• State Industries
• Vaillant
• Westinghouse Electric Corporation
   

Gas Water Heater Industry News:

• In January 2024, AO Smith launched the Adapt Premium Condensing Gas Tankless Water Heaters equipped with X3 Scale Prevention Technology. They key features include an integrated recirculation pump, patented heat exchanger, enhanced installation flexibility and highly efficient performance. Further, the Adapt line offers two- and three-inch dual pipe venting, ½- and ¾-inch gas line options and universal indoor/outdoor installation to enhance the installation flexibility.
   
• In January 2022, GE Appliances unveiled RealMAX, marking its debut in the comprehensive atmospheric gas water heater series. This series encompasses atmospheric gas, electric, tankless, and point-of-use water heaters, each available in diverse capacities. These state-of-the-art products boast a range of capacities, straightforward installation, an LED indicator, and durability, making them suitable for both residential and light commercial applications. The introduction of these advanced products bolstered the company's portfolio and expanded its presence in the industry.
   

This gas water heater market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue & volume in “USD Million & ‘000 Units” from 2021 to 2034, for the following segments:

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Market, By Product

• Instant
• Storage

Market, By Capacity

• Below 30 Liters
• 30 – 100 Liters
• 100 – 250 Liters
• 250 – 400 Liters
• > 400 Liters

Market, By Application

• Residential
• Commercial
  • College/University
  • Offices
  • Government/Military
  • Others

Market, By Fuel

• Natural Gas
• LPG

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • France
  • Germany
  • Italy
  • Austria
  • Spain
  • Netherlands
• Asia Pacific
  • China
  • Australia
  • India
  • Japan
  • South Korea
• Eurasia
  • Russia
  • Belarus
  • Kazakhstan
  • Kyrgyzstan
  • Armenia
• CIS
  • Azerbaijan
  • Moldova
  • Tajikistan
  • Turkmenistan
  • Uzbekistan
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Qatar
  • Kuwait
  • Oman
• Latin America
  • Brazil
  • Argentina
  • Chile
  • Mexico