Tankless Electric Water Heaters Market Size, Share, Growth, and Industry Analysis, By Types (Whole-House, Point-of-Use), By Applications (E-commerce, Retail, Wholesale) , and Regional Insights and Forecast to 2034

Tankless Electric Water Heaters Market Size

The Global Tankless Electric Water Heaters Market size was USD 509.14 Million in 2024 and is projected to reach USD 536.23 Million in 2025, USD 564.76 Million in 2026, and further expand to USD 854.97 Million by 2034, exhibiting a growth rate of 5.32% during the forecast period 2025–2034. Nearly 60% of growth is driven by residential demand, while commercial applications contribute close to 30%, highlighting a balanced adoption trend across both sectors globally.

The US Tankless Electric Water Heaters Market is showing significant expansion, with more than 65% of households preferring energy-efficient systems. Around 48% of buyers are prioritizing smart integration, while nearly 55% of installations are driven by replacements of traditional storage heaters. Over 42% of commercial facilities, including hotels and offices, are upgrading to tankless models, reflecting a strong growth trajectory in the United States.

Key Findings

• Market Size: The market stood at USD 509.14 Million in 2024, reaching USD 536.23 Million in 2025, and projected at USD 854.97 Million by 2034 with 5.32% growth.
• Growth Drivers: Over 60% of households seek energy efficiency, 48% prefer smart features, and 55% installations occur in residential sectors driving demand upward.
• Trends: Around 45% demand compact units, 50% adopt eco-friendly heaters, and nearly 40% opt for digital purchase platforms influencing sales trends.
• Key Players: Rheem, Bosch, A.O. Smith, Stiebel Eltron, Ferroli & more.
• Regional Insights: North America holds 32% share driven by 65% residential adoption, Europe captures 28% with 58% eco-friendly preference, Asia-Pacific leads 30% fueled by 62% urban demand, Middle East & Africa accounts for 10% supported by 45% commercial installations.
• Challenges: Nearly 35% face cost barriers, 28% report electricity reliability issues, and 30% of rural households struggle with adoption challenges globally.
• Industry Impact: More than 55% adoption in residential, 35% in commercial, and 45% smart-enabled units influencing energy-saving and lifestyle improvements.
• Recent Developments: Nearly 50% new products include eco features, 40% smart integration, 35% compact designs, and 30% recyclable materials shaping innovations.

The Tankless Electric Water Heaters Market is evolving with rising sustainability awareness and changing consumer behaviors. Nearly 62% of global consumers now prefer appliances with lower energy consumption, while 45% demand smart-enabled heaters with advanced control systems. Compact models are increasingly favored, with 40% of new installations in urban homes adopting space-saving units. The market also benefits from eco-conscious buyers, as 50% of recent purchases prioritize environmentally friendly solutions. These factors highlight the growing significance of innovation and sustainability in shaping the competitive landscape of the industry.

Tankless Electric Water Heaters Market Trends

The tankless electric water heaters market is witnessing strong momentum due to rising demand for energy-efficient appliances, space-saving installations, and growing consumer awareness toward sustainable solutions. More than 65% of households are now prioritizing energy-efficient appliances, with nearly 40% shifting from traditional storage heaters to tankless electric models. In addition, over 55% of end-users highlight the importance of space optimization, which favors the adoption of compact tankless systems. Around 70% of consumers emphasize lower standby energy losses, making tankless electric heaters more attractive compared to conventional alternatives. The demand is further supported by the increasing adoption in residential applications, which account for nearly 60% share of installations, while the commercial segment contributes around 30% to 35%. Smart integration features are also gaining traction, with over 45% of new models offering app-based controls and remote monitoring. Furthermore, environmental concerns play a significant role, as over 50% of buyers choose products aligned with eco-friendly standards. These trends collectively illustrate a growing preference for advanced, durable, and efficient water heating technologies, reinforcing the expanding market adoption of tankless electric water heaters worldwide.

Tankless Electric Water Heaters Market Dynamics

DRIVERS

Rising demand for energy efficiency

More than 68% of consumers now prefer appliances that cut electricity usage, and tankless electric heaters help reduce standby energy losses by nearly 25% compared to storage-based models. With over 55% adoption in urban households, the demand for energy savings is a key factor driving market penetration.

OPPORTUNITY

Growth in residential adoption

Residential installations account for nearly 60% of the total demand, with more than 45% of new home projects now integrating tankless electric water heaters. The rising preference for compact and eco-friendly appliances among 70% of urban households is opening vast growth opportunities for market players.

RESTRAINTS

"High upfront installation costs"

Although operating efficiency is widely appreciated, around 52% of potential buyers hesitate due to the initial cost of installation being nearly 30% to 35% higher than conventional storage heaters. This cost barrier limits adoption, especially across low and middle-income households, despite long-term savings benefits.

CHALLENGE

"Power supply limitations in developing regions"

In emerging economies, almost 40% of households face power reliability issues, which creates a challenge for tankless electric water heaters that require consistent power supply. Additionally, around 28% of rural areas lack the infrastructure for stable electricity, making adoption difficult and restricting wider market growth potential.

Segmentation Analysis

The global tankless electric water heaters market, valued at USD 536.23 Million in 2025, is expected to expand significantly to USD 854.97 Million by 2034, driven by energy efficiency and rising residential adoption. Segmentation by type shows that Whole-House models dominate the market with the highest share, while Point-of-Use systems are rapidly growing due to compact installations and cost-effectiveness. By application, E-commerce channels are emerging as the fastest-growing distribution platform, whereas retail continues to hold a substantial market share. Wholesale contributes moderately but remains relevant in specific regional markets. Each segment demonstrates unique market behavior, with individual revenue shares and growth patterns reflecting the diverse adoption trends of tankless electric water heaters worldwide.

By Type

Whole-House

Whole-house tankless electric water heaters are widely adopted in urban homes, where 60% of households prioritize centralized hot water systems. Nearly 50% of new installations in developed regions prefer whole-house models, as they deliver hot water to multiple outlets simultaneously with higher efficiency.

Whole-House held the largest share in the market, accounting for USD 322.85 Million in 2025, representing 60.2% of the total market. This segment is expected to grow at a CAGR of 5.10% from 2025 to 2034, driven by rising demand for centralized heating, energy-efficient household appliances, and the replacement of traditional storage heaters.

Top 3 Major Dominant Countries in the Whole-House Segment

• United States led the Whole-House segment with a market size of USD 88.34 Million in 2025, holding a 27.3% share and expected to grow at a CAGR of 5.2% due to strong residential adoption and consumer energy efficiency awareness.
• Germany accounted for USD 54.90 Million in 2025, holding a 17.0% share and forecasted to grow at a CAGR of 5.1% due to stringent energy regulations and preference for sustainable appliances.
• China contributed USD 41.45 Million in 2025, representing a 12.8% share, expected to grow at a CAGR of 5.4% supported by rapid urbanization and the rising middle-class population.

Point-of-Use

Point-of-use tankless electric water heaters are gaining popularity in compact apartments, offices, and commercial spaces. Nearly 40% of installations in emerging economies prefer point-of-use models due to affordability and convenience. These systems are especially attractive for small households that require on-demand localized hot water supply.

Point-of-Use accounted for USD 213.38 Million in 2025, representing 39.8% of the total market. This segment is projected to grow at a CAGR of 5.60% during 2025–2034, fueled by demand for space-saving solutions, reduced installation costs, and increased adoption in multi-family housing units.

Top 3 Major Dominant Countries in the Point-of-Use Segment

• India led the Point-of-Use segment with a market size of USD 46.94 Million in 2025, holding a 22.0% share and expected to grow at a CAGR of 5.7% due to rising adoption in urban households and smaller commercial establishments.
• Japan held USD 32.00 Million in 2025, with a 15.0% share and forecasted to grow at a CAGR of 5.5% driven by compact housing infrastructure and technology-driven appliance preferences.
• Brazil contributed USD 18.13 Million in 2025, representing an 8.5% share, expected to grow at a CAGR of 5.8% due to rapid housing development and cost-effective demand for localized heating systems.

By Application

E-commerce

E-commerce platforms are driving the fastest growth for tankless electric water heaters, with over 55% of consumers preferring online purchases due to wider product availability and competitive pricing. Nearly 45% of online buyers prioritize features such as energy efficiency, compactness, and smart integration.

E-commerce held the largest share in the market, accounting for USD 214.49 Million in 2025, representing 40.0% of the total market. This segment is expected to grow at a CAGR of 5.7% from 2025 to 2034, fueled by increasing online retail penetration, discount-based sales, and consumer preference for digital purchases.

Top 3 Major Dominant Countries in the E-commerce Segment

• China led the E-commerce segment with a market size of USD 64.34 Million in 2025, holding a 30.0% share and expected to grow at a CAGR of 5.8% due to strong online infrastructure and consumer shift to digital shopping.
• United States contributed USD 53.62 Million in 2025, representing a 25.0% share, forecasted to grow at a CAGR of 5.6% driven by Amazon and other large-scale online distributors.
• India held USD 32.17 Million in 2025, with a 15.0% share and projected CAGR of 5.9% due to rising internet penetration and preference for affordable online deals.

Retail

Retail distribution remains significant, accounting for over 45% of consumer purchases, particularly in developed countries where consumers prefer physical inspection before buying. Around 50% of households continue to purchase through retail outlets due to after-sales support and installation services.

Retail accounted for USD 187.68 Million in 2025, representing 35.0% of the total market. This segment is anticipated to grow at a CAGR of 5.2% during 2025–2034, driven by strong retail networks, brand loyalty, and bundled installation services offered by retailers.

Top 3 Major Dominant Countries in the Retail Segment

• Germany led the Retail segment with a market size of USD 46.92 Million in 2025, holding a 25.0% share and projected CAGR of 5.2% due to established retail networks and consumer trust in physical stores.
• United States accounted for USD 41.29 Million in 2025, representing a 22.0% share, expected to grow at a CAGR of 5.1% owing to demand for in-store services and consultation-based purchases.
• France contributed USD 24.40 Million in 2025, holding a 13.0% share, expected to grow at a CAGR of 5.3% due to high consumer reliance on retail chains for appliance purchases.

Wholesale

Wholesale distribution contributes a moderate share, particularly in developing regions where over 30% of installers procure through bulk purchases. The wholesale channel is also preferred by commercial builders and contractors seeking cost savings in large-scale projects.

Wholesale accounted for USD 134.06 Million in 2025, representing 25.0% of the total market. This segment is expected to grow at a CAGR of 4.9% from 2025 to 2034, driven by infrastructure projects, hotel chains, and contractor-driven installations in emerging economies.

Top 3 Major Dominant Countries in the Wholesale Segment

• Brazil led the Wholesale segment with a market size of USD 26.81 Million in 2025, holding a 20.0% share and expected to grow at a CAGR of 5.0% due to growing construction and hospitality sector demand.
• Mexico held USD 16.08 Million in 2025, representing a 12.0% share, projected CAGR of 4.8% driven by commercial expansion and housing developments.
• South Africa contributed USD 10.73 Million in 2025, with an 8.0% share and expected CAGR of 5.1% due to increased adoption in urbanizing areas.

Tankless Electric Water Heaters Market Regional Outlook

The global tankless electric water heaters market is projected to reach USD 536.23 Million in 2025, advancing toward USD 854.97 Million by 2034. Regional distribution highlights North America with a 32% share, Europe holding 28%, Asia-Pacific leading with 30%, and the Middle East & Africa contributing 10%. Each region demonstrates unique adoption trends, driven by different consumer priorities, regulatory policies, and infrastructure developments. This diversified market structure reflects the widespread global acceptance of tankless electric water heaters as energy-efficient and sustainable solutions.

North America

North America continues to dominate the adoption of tankless electric water heaters due to strong consumer demand for energy efficiency and sustainability. Around 65% of households in the United States prefer eco-friendly appliances, while nearly 50% of Canadian buyers value advanced smart water heating features. Additionally, over 40% of installations in the region are supported by government incentives for energy-efficient upgrades, making the market highly competitive and attractive for manufacturers.

North America held the largest share in the market, accounting for USD 171.56 Million in 2025, representing 32% of the total market. This segment is expected to grow steadily, driven by energy efficiency mandates, replacement of traditional heaters, and widespread residential adoption.

North America - Major Dominant Countries in the Market

• United States led North America with a market size of USD 92.65 Million in 2025, holding a 54% share, supported by high residential demand and eco-regulation compliance.
• Canada accounted for USD 47.64 Million in 2025, representing 28% share, with growth influenced by green building codes and consumer demand for advanced features.
• Mexico contributed USD 31.27 Million in 2025, holding 18% share, driven by urbanization and affordable point-of-use installations.

Europe

Europe showcases strong market adoption due to strict energy policies and high consumer awareness of sustainable heating technologies. Nearly 58% of European households consider energy labels before purchase, while more than 45% demand compact designs suited for smaller living spaces. Government incentives in countries such as Germany and France encourage consumers to adopt eco-friendly water heating systems, further strengthening the European market outlook.

Europe accounted for USD 150.14 Million in 2025, representing 28% of the global market. This segment benefits from regulatory frameworks, consumer preference for smart appliances, and strong demand in both residential and commercial sectors.

Europe - Major Dominant Countries in the Market

• Germany led Europe with a market size of USD 52.55 Million in 2025, holding a 35% share, influenced by energy regulations and household modernization trends.
• France contributed USD 42.04 Million in 2025, representing 28% share, with high demand for space-saving water heating systems.
• United Kingdom accounted for USD 35.55 Million in 2025, holding 24% share, supported by eco-conscious consumer behavior and government-driven sustainability programs.

Asia-Pacific

Asia-Pacific is experiencing rapid expansion of the tankless electric water heaters market due to urbanization, growing middle-class income, and the rising adoption of compact housing units. More than 62% of urban households in the region now prefer tankless models for efficiency and space-saving benefits. Additionally, 50% of new construction projects in countries like India and China integrate these heaters as a standard feature, boosting demand in both residential and commercial sectors.

Asia-Pacific represented USD 160.87 Million in 2025, accounting for 30% of the total market. Strong growth is expected due to increasing infrastructure development, high population density, and consumer preference for cost-effective and eco-friendly appliances.

Asia-Pacific - Major Dominant Countries in the Market

• China led Asia-Pacific with a market size of USD 61.13 Million in 2025, holding 38% share, supported by rapid urbanization and rising consumer income levels.
• India accounted for USD 46.65 Million in 2025, representing 29% share, driven by demand for affordable point-of-use systems in urban households.
• Japan contributed USD 32.17 Million in 2025, holding 20% share, with strong adoption of compact and technologically advanced water heaters.

Middle East & Africa

Middle East & Africa show consistent growth in tankless electric water heaters adoption, supported by increasing urbanization and infrastructure development. Nearly 45% of installations in the region are seen in commercial sectors such as hotels and offices, while 35% of urban households are shifting from conventional storage heaters to tankless models. Rising disposable incomes in Gulf countries and demand for sustainable energy solutions further contribute to market expansion.

Middle East & Africa accounted for USD 53.66 Million in 2025, representing 10% of the global market. This segment is expected to advance steadily, fueled by hospitality sector demand, new housing projects, and government-backed initiatives for energy-efficient appliances.

Middle East & Africa - Major Dominant Countries in the Market

• Saudi Arabia led the region with a market size of USD 18.78 Million in 2025, holding 35% share, driven by rising hospitality and real estate sectors.
• South Africa accounted for USD 14.97 Million in 2025, representing 28% share, with growth influenced by urban housing development and modernization.
• United Arab Emirates contributed USD 10.73 Million in 2025, holding 20% share, supported by high demand in luxury residential and commercial establishments.

List of Key Tankless Electric Water Heaters Market Companies Profiled

Investment Analysis and Opportunities in Tankless Electric Water Heaters Market

The tankless electric water heaters market is presenting strong investment opportunities, supported by rising consumer awareness and government energy-efficiency mandates. More than 62% of households globally are now prioritizing energy-efficient water heating, while 48% of buyers emphasize sustainability. The market has seen nearly 55% of demand emerging from the residential sector, whereas commercial installations account for 35% of the overall share. Around 40% of consumers are willing to pay more for smart integration and IoT-enabled water heaters, opening avenues for technology-driven companies. Investors are focusing on expanding in emerging markets, where nearly 30% growth opportunities exist due to increasing urbanization and middle-class adoption. Strategic investments in digital retailing are also vital, as over 45% of buyers prefer e-commerce platforms for appliance purchases. These factors highlight the market’s lucrative opportunities for long-term profitability and innovation.

New Products Development

New product development in the tankless electric water heaters market is accelerating, with over 50% of manufacturers focusing on smart features such as Wi-Fi connectivity and remote monitoring. Nearly 35% of newly launched models emphasize ultra-compact design to meet the rising demand in urban housing. Around 40% of new products are designed with energy-saving modes, cutting energy consumption by up to 25% compared to traditional systems. Manufacturers are also emphasizing eco-friendly materials, with more than 30% of new product launches incorporating recyclable components. Additionally, 45% of global brands are investing in modular design heaters, enabling faster installation and reduced maintenance. These product innovations not only enhance consumer convenience but also strengthen brand positioning in a competitive market landscape.

Recent Developments

• Rheem Smart Launch: In 2024, Rheem introduced a smart tankless heater with 20% faster heating efficiency and Wi-Fi integration, targeting more than 35% of urban households looking for smart-enabled appliances.
• Bosch Compact Design: Bosch rolled out ultra-compact units designed for apartments, reducing space usage by nearly 30%, capturing demand from over 25% of compact housing units globally.
• Stiebel Eltron Eco-Friendly Model: The company unveiled eco-friendly heaters made with recyclable materials, contributing to nearly 28% reduction in lifecycle carbon footprint, appealing to 40% of eco-conscious buyers.
• A.O. Smith Commercial Integration: A.O. Smith developed commercial-grade tankless heaters capable of servicing large facilities, improving energy savings by nearly 22%, with adoption rising in 15% of hotels and office complexes.
• Ferroli Hybrid Innovation: Ferroli launched a hybrid electric tankless heater combining renewable energy input, reducing overall power consumption by 18%, which is now adopted by 10% of pilot residential projects in Europe.

Report Coverage

The tankless electric water heaters market report provides detailed insights into growth factors, regional dynamics, and competitive strategies, incorporating SWOT analysis to evaluate the market structure. Strengths include energy efficiency and sustainability, with over 60% of consumers now preferring eco-friendly water heating systems. Weaknesses involve high installation costs, affecting nearly 35% of potential buyers in middle-income segments. Opportunities lie in residential adoption, which contributes 55% of overall demand, and rising e-commerce sales that account for 40% of distribution. Threats include power reliability issues in emerging regions, where almost 30% of households face electricity challenges. Regionally, North America holds 32% share, Europe 28%, Asia-Pacific 30%, and Middle East & Africa 10%, reflecting a balanced but competitive global distribution. By type, whole-house units capture 60.2% share, while point-of-use systems hold 39.8%, showing varied consumer adoption patterns. By application, e-commerce contributes 40%, retail 35%, and wholesale 25%, emphasizing the importance of digital and physical distribution strategies. The report also highlights that more than 45% of manufacturers are investing in new product innovations, while 20% are focusing on strategic partnerships. Overall, the coverage ensures a comprehensive understanding of current market positioning and future growth opportunities.