U.S. Water Heater Market - Industry Outlook & Forecast 2024-2029

List of Tables

The U.S. water heater market is expected to grow at a CAGR of 6.67% from 2023-2029.

MARKET TRENDS & OPPORTUNITIES

Rising Popularity of Tankless Water Heaters

The popularity of tankless water heaters is rapidly increasing in the U.S. water heater market due to their several advantages. Their on-demand heating system makes them significantly more energy-efficient than traditional water heaters, lowering utility bills. This efficiency can also lead to eligibility for tax breaks and energy incentives in certain locations, encouraging homeowners to switch. In addition, the longer lifespan of tankless water heaters, often exceeding 20 years, appeals to those seeking durable and cost-effective solutions.

The Popularity of Electrification Heaters in Commercial

The growing popularity of electric water heaters in commercialization in the U.S. water heater market has been driven by their environmentally friendly attributes. Unlike gas water heaters, electric ones do not produce toxic fumes, leading to reduced air pollution. In addition, their easy installation process makes them convenient for various commercial settings. Moreover, using electric heaters contributes to decarbonization efforts, aligning with the growing focus on environmentally friendly and sustainable practices.

INDUSTRY RESTRAINTS

High Installation Cost of Water Heater

The installation cost of a water heater includes various factors, making it essential to consider both labor and materials. The average installation costs range from USD 900 to USD 3,000, typically around USD 1,400. Furthermore, the hourly rates for local plumbers typically range from USD 50 to USD 200, with additional charges, such as electrician work, costing between USD 50 and USD 150 per hour. Apart from labor, the expenses include parts and materials necessary for a successful and efficient water heater installation. These materials include pipes, fittings, pipe thread compound, pressure release valves, solder, venting pipes, connectors, and water & gas piping. The complexity of the installation increases the demand for additional materials, impacting the overall replacement cost.

SEGMENTATION INSIGHTS

INSIGHTS BY PRODUCT

The U.S. water heater market by product is segmented as gas and oil, electric, heat pumps, and solar. The gas & oil segment accounted for the highest industry share in the product type segment. Gas & oil are highly popular among end-users and have a wide customer base due to the low cost of natural gas. Gas and oil water heaters use gases such as natural gas and LPG, requiring a gas line hookup. Gas water heaters come in various sizes, ranging from as small as 20 gallons to as large as 100 gallons. Also, they boast an energy efficiency of more than 80-85%. By the end of the forecast period, gas & oil are expected to continue their dominance in usage and acceptance among end-users and account for the largest market share in 2029.

Segmentation by Product

Gas and Oil
Electric
Heat Pumps
Solar

INSIGHTS BY CATEGORY

The U.S. water heater market by category is segmented as storage and instant. In 2023, the storage segment held the most significant U.S. water heater market share. The surge in demand is attributed to the popularity of the storage water heater, which is driven by affordability, versatility, easy installation, high flow rate, and the ability to store hot water efficiently for long durations. These features collectively contribute to the segment's significance, reflecting the market's preference for reliable, cost-effective heating products. Furthermore, the instant segment market growth can be attributed to factors like the increasing emphasis on energy efficiency, the low maintenance requirements, and the assurance of a continuous hot water supply. Moreover, consumers have a rising awareness and prioritization of sustainability, further driving the demand for instant water heaters.

Segmentation by Category

Storage
Instant

INSIGHTS BY DISTRIBUTION CHANNEL

The offline distribution channel accounted for the highest U.S. water heater market share in 2023. This segment's demand for water heaters increases because consumers touch the product and check the quality before purchasing. Also, companies offer a comprehensive range of products in offline channels, such as various varieties of electric, heat pumps, gas, and others. Retailers act as the face of the companies and are the point of purchase for most customers. However, the online segment witnessed the highest CAGR in the distribution channel segment during the forecast period. The demand for water heaters through online channels has increased due to the rising internet penetration worldwide. Moreover, the number of smartphone users has rapidly grown, contributing to the success of online water heater sales.

Segmentation by Distribution Channel

Offline
Online

INSIGHTS BY END-USER

The U.S. water heater market by end-user is segmented as residential and commercial. In 2023, the residential segment accounted for the highest share in the end-user segment. The surge in demand can be attributed to a growing population, rising building permits, and continuous innovation in water heating technologies. Collectively, these drivers contribute to the sustained growth and prominence of the residential water heater industry. However, the commercial segment is projected to witness faster growth in the U.S. water heater market during the forecast period. With the rapid shift towards urbanization, significantly rising infrastructure, and increasing number of corporate offices, hotels, and restaurants, demand for water heaters is growing considerably from the commercial sector. Also, the healthcare sector substantially increases the demand for water heaters due to its stringent hygiene, sanitation, and infection control requirements.

Segmentation by End-User

Residential
Commercial

REGIONAL ANALYSIS

Midwest is the most significant contributor in the U.S. water heater market, generating over USD 1 billion in revenue in 2023. The Midwest U.S. is a large region encompassing many states, each with its own market dynamics and consumer preferences. Further, the more individuals and families settle in urban areas, the more reliable and efficient water heating solutions become dominant for daily living. In addition, the Midwest's diverse climate, depicted by cold winters, necessitates using water heaters to provide warm water for domestic use, including bathing, cleaning, and cooking.

Segmentation by Geography

The U.S.
- Midwest
- Northeast
- South
- West

COMPETITIVE LANDSCAPE

The competition among vendors in the U.S. water heater market is quite intense. This market is highly fragmented, with many companies competing for market share. The rapidly changing technological environment could adversely affect vendors as customers expect continual innovations and upgrades. The industry is moderately fragmented, with many players providing advanced features and designs for water heaters. The three major vendors in the U.S. water heater market are A. O. Smith, Bradford White Corporation, and Rheem Manufacturing.

Recent Development in the U.S. Water Heater Market

Rheem Manufacturing Company: In December 2023, the company introduced Rheem's new Maximus(TM) line-up, which features a 75-gallon heavy-duty model with leak detection and maximum plus models (40- and 50-gallon), offering super high efficiency and advanced features for increased hot water capacity and savings. Through this, the company enhances product offerings in the market.
A.O. Smith: The organization focuses on an acquisition strategy to expand its presence in the North American region. For instance, in 2021, the firm acquired Giant Factories in Canada to expand production and increase market penetration in North America.
Bradford White Corporation: In 2023, the organization launched Brute XTR commercial boilers and volume water heaters, with key features such as low-pressure drop water tube heat exchangers, water connections, convenient touchscreen, and others.

Key Company Profiles

A.O. Smith
Bradford White Corporation
Rheem Manufacturing Company

Other Prominent Vendors

Alternate Energy Technologies
Apricus Solar
Bock Water Heaters
BSH Home Appliances
Bosch Home Comfort
Eccotemp
General Electric
Heliodyne
HTP
Hubbell Water Heaters
Intellihot
Kingspan
Kenmore
Lennox International
Midea
Navien
Noritz America Corporation
RECO
Rinnai America Corporation
Sioux Corporation
SunMaxx Solar
SunEarth
State Water Heaters
Stiebel Eltron
Viessmann
Watts Water Technologies
Westinghouse Electric Company
Whirlpool

KEY QUESTIONS ANSWERED:

1.How big is the U.S. water heater market?

2.What is the growth rate of the U.S. water heater market?

3.Which region dominates the U.S. water heater market?

4.What are the significant trends in the U.S. water heater market?

5.Who are the key players in the U.S. water heater market?

Product Code: ARZ240222

1. SCOPE & COVERAGE

1.1. MARKET DEFINITION
- 1.1.1. INCLUSIONS
- 1.1.2. EXCLUSIONS
- 1.1.3. MARKET ESTIMATION CAVEATS
1.2. SEGMENT COVERED & DEFINITIONS
- 1.2.1. MARKET BY PRODUCT TYPE
- 1.2.2. MARKET BY CATEGORY
- 1.2.3. MARKET BY DISTRIBUTION CHANNEL
- 1.2.4. MARKET BY END-USER
1.3. MARKET DERIVATION
- 1.3.1. BASE YEAR

2. PREMIUM INSIGHTS

2.1. OPPORTUNITY POCKETS
2.2. MARKET DEFINITIONS
2.3. REPORT OVERVIEW
2.4. OPPORTUNITIES & CHALLENGE ANALYSIS
2.5. SEGMENT ANALYSIS
2.6. REGIONAL ANALYSIS
2.7. COMPETITIVE LANDSCAPE
- 2.7.1. RECENT DEVELOPMENTS IN THE MARKET

3. MARKET AT A GLANCE

4. INTRODUCTION

4.1. OVERVIEW
- 4.1.1. WATER HEATER REPLACEMENT
- 4.1.2. POST-PANDEMIC WATER HEATER MARKET

5. MARKET OPPORTUNITIES & TRENDS

5.1. RISING POPULARITY OF TANKLESS WATER HEATERS
5.2. GROWING DEMAND FOR SMART WATER HEATER
5.3. INCREASED RENEWABLE ENERGY USE IN WATER HEATERS

6. MARKET GROWTH ENABLERS

6.1. THE POPULARITY OF ELECTRIC WATER HEATERS IN COMMERCIAL SETTINGS
6.2. TECHNOLOGICAL ADVANCES IN PRODUCTS
6.3. INCREASING CONSTRUCTION ACTIVITIES

7. MARKET RESTRAINTS

7.1. CHALLENGES IN ENERGY EFFICIENCY FOR WATER HEATERS
7.2. VARIATION OF GAS AND OTHER FUEL PRICES
7.3. HIGH INSTALLATION COST OF WATER HEATERS

8. MARKET LANDSCAPE

8.1. MARKET OVERVIEW
8.2. DEMAND INSIGHTS
8.3. VENDOR ANALYSIS
8.4. MARKET SIZE & FORECAST
8.5. FIVE FORCES ANALYSIS
- 8.5.1. THREAT OF NEW ENTRANTS
- 8.5.2. BARGAINING POWER OF SUPPLIERS
- 8.5.3. BARGAINING POWER OF BUYERS
- 8.5.4. THREAT OF SUBSTITUTES
- 8.5.5. COMPETITIVE RIVALRY

9. PRODUCT

9.1. MARKET SNAPSHOT & GROWTH ENGINE
9.2. MARKET OVERVIEW
9.3. GAS AND OIL
- 9.3.1. MARKET OVERVIEW
- 9.3.2. MARKET SIZE & FORECAST
- 9.3.3. MARKET BY GEOGRAPHY
9.4. ELECTRIC
- 9.4.1. MARKET OVERVIEW
- 9.4.2. MARKET SIZE & FORECAST
- 9.4.3. MARKET BY GEOGRAPHY
9.5. HEAT PUMPS
- 9.5.1. MARKET OVERVIEW
- 9.5.2. MARKET SIZE & FORECAST
- 9.5.3. MARKET BY GEOGRAPHY
9.6. SOLAR
- 9.6.1. MARKET OVERVIEW
- 9.6.2. MARKET SIZE & FORECAST
- 9.6.3. MARKET BY GEOGRAPHY

10. DISTRIBUTION CHANNEL

10.1. MARKET OVERVIEW
10.2. OFFLINE
- 10.2.1. MARKET OVERVIEW
- 10.2.2. MARKET SIZE & FORECAST
- 10.2.3. MARKET BY GEOGRAPHY
10.3. CONSUMER ELECTRONICS RETAIL STORES
- 10.3.1. MARKET OVERVIEW
10.4. DEPARTMENTAL STORES
- 10.4.1. MARKET OVERVIEW
10.5. SPECIALTY STORES
- 10.5.1. MARKET OVERVIEW
10.6. OTHERS
- 10.6.1. MARKET OVERVIEW
10.7. ONLINE
- 10.7.1. MARKET OVERVIEW
- 10.7.2. MARKET SIZE & FORECAST
- 10.7.3. MARKET BY GEOGRAPHY
10.8. DIRECT SALES
- 10.8.1. MARKET OVERVIEW
10.9. THIRD-PARTY SALES
- 10.9.1. MARKET OVERVIEW

11. END-USER

11.1. MARKET OVERVIEW
11.2. RESIDENTIAL
- 11.2.1. MARKET OVERVIEW
- 11.2.2. MARKET SIZE & FORECAST
- 11.2.3. MARKET BY GEOGRAPHY
11.3. COMMERCIAL
- 11.3.1. MARKET OVERVIEW
- 11.3.2. MARKET SIZE & FORCAST
- 11.3.3. MARKET BY GEOGRAPHY
11.4. HEALTHCARE
- 11.4.1. MARKET OVERVIEW
11.5. HOSPITALITY
- 11.5.1. MARKET OVERVIEW
11.6. OTHER
- 11.6.1. MARKET OVERVIEW

12. CATEGORY

12.1. MARKET OVERVIEW
12.2. STORAGE
- 12.2.1. MARKET OVERVIEW
- 12.2.2. MARKET SIZE & FORECAST
- 12.2.3. MARKET BY GEOGRAPHY
12.3. INSTANT
- 12.3.1. MARKET OVERVIEW
- 12.3.2. MARKET SIZE & FORECAST
- 12.3.3. MARKET BY GEOGRAPHY

13. GEOGRAPHY

13.1. MARKET SNAPSHOT & GROWTH ENGINE
13.2. GEOGRAPHIC OVERVIEW

14. MIDWEST

14.1. MARKET OVERVIEW
- 14.1.1. ILLINOIS
- 14.1.2. MICHIGAN
- 14.1.3. OHIO
14.2. MARKET SIZE & FORECAST
14.3. PRODUCT TYPE
- 14.3.1. MARKET SIZE & FORECAST
14.4. CATEGORY
- 14.4.1. MARKET SIZE & FORECAST
14.5. END-USER
- 14.5.1. MARKET SIZE & FORECAST
14.6. DISTRIBUTION CHANNEL
- 14.6.1. MARKET SIZE & FORECAST

15. SOUTH

15.1. MARKET OVERVIEW
- 15.1.1. TEXAS
- 15.1.2. FLORIDA
15.2. MARKET SIZE & FORECAST
15.3. PRODUCT TYPE
- 15.3.1. MARKET SIZE & FORECAST
15.4. CATEGORY
- 15.4.1. MARKET SIZE & FORECAST
15.5. END-USER
- 15.5.1. MARKET SIZE & FORECAST
15.6. DISTRIBUTION CHANNEL
- 15.6.1. MARKET SIZE & FORECAST

16. WEST

16.1. MARKET OVERVIEW
- 16.1.1. CALIFORNIA
- 16.1.2. WASHINGTON
- 16.1.3. UTAH
16.2. MARKET SIZE & FORECAST
16.3. PRODUCT TYPE
- 16.3.1. MARKET SIZE & FORECAST
16.4. CATEGORY
- 16.4.1. MARKET SIZE & FORECAST
16.5. END-USER
- 16.5.1. MARKET SIZE & FORECAST
16.6. DISTRIBUTION CHANNEL
- 16.6.1. MARKET SIZE & FORECAST

17. NORTHEAST

17.1. MARKET OVERVIEW
- 17.1.1. NEW JERSEY
- 17.1.2. NEW YORK
17.2. MARKET SIZE & FORECAST
17.3. PRODUCT TYPE
- 17.3.1. MARKET SIZE & FORECAST
17.4. CATEGORY
- 17.4.1. MARKET SIZE & FORECAST
17.5. END-USER
- 17.5.1. MARKET SIZE & FORECAST
17.6. DISTRIBUTION CHANNEL
- 17.6.1. MARKET SIZE & FORECAST

18. COMPETITIVE LANDSCAPE

18.1. COMPETITION OVERVIEW
- 18.1.1. RECENT VENDOR ACTIVITIES IN THE MARKET

19. KEY COMPANY PROFILES

19.1. A. O. SMITH
- 19.1.1. BUSINESS OVERVIEW
- 19.1.2. PRODUCT OFFERINGS
- 19.1.3. KEY STRATEGIES
- 19.1.4. KEY STRENGTHS
- 19.1.5. KEY OPPORTUNITIES
19.2. BRADFORD WHITE CORPORATION
- 19.2.1. BUSINESS OVERVIEW
- 19.2.2. PRODUCT OFFERINGS
- 19.2.3. KEY STRATEGIES
- 19.2.4. KEY STRENGTHS
- 19.2.5. KEY OPPORTUNITIES
19.3. RHEEM MANUFACTURING COMPANY
- 19.3.1. BUSINESS OVERVIEW
- 19.3.2. PRODUCT OFFERINGS
- 19.3.3. KEY STRATEGIES
- 19.3.4. KEY STRENGTHS
- 19.3.5. KEY OPPORTUNITIES

20. OTHER PROMINENT VENDORS

20.1. ALTERNATE ENERGY TECHNOLOGIES
- 20.1.1. BUSINESS OVERVIEW
- 20.1.2. PRODUCT OFFERINGS
20.2. APRICUS SOLAR
- 20.2.1. BUSINESS OVERVIEW
- 20.2.2. PRODUCT OFFERINGS
20.3. BOCK WATER HEATERS
- 20.3.1. BUSINESS OVERVIEW
- 20.3.2. PRODUCT OFFERINGS
20.4. BSH HOME APPLIANCES
- 20.4.1. BUSINESS OVERVIEW
- 20.4.2. PRODUCT OFFERINGS
20.5. ECCOTEMP
- 20.5.1. BUSINESS OVERVIEW
- 20.5.2. PRODUCT OFFERINGS
20.6. GENERAL ELECTRIC
- 20.6.1. BUSINESS OVERVIEW
- 20.6.2. PRODUCT OFFERINGS
20.7. HELIODYNE
- 20.7.1. BUSINESS OVERVIEW
- 20.7.2. PRODUCT OFFERINGS
20.8. HTP
- 20.8.1. BUSINESS OVERVIEW
- 20.8.2. PRODUCT OFFERINGS
20.9. HUBBELL WATER HEATERS
- 20.9.1. BUSINESS OVERVIEW
- 20.9.2. PRODUCT OFFERINGS
20.10. INTELLIHOT
- 20.10.1. BUSINESS OVERVIEW
- 20.10.2. PRODUCT OFFERINGS
20.11. KINGSPAN
- 20.11.1. BUSINESS OVERVIEW
- 20.11.2. PRODUCT OFFERINGS
20.12. KENMORE
- 20.12.1. BUSINESS OVERVIEW
- 20.12.2. PRODUCT OFFERINGS
20.13. LENNOX INTERNATIONAL
- 20.13.1. BUSINESS OVERVIEW
- 20.13.2. PRODUCT OFFERINGS
20.14. MIDEA
- 20.14.1. BUSINESS OVERVIEW
- 20.14.2. PRODUCT OFFERINGS
20.15. NAVIEN
- 20.15.1. BUSINESS OVERVIEW
- 20.15.2. PRODUCT OFFERINGS
20.16. NORITZ AMERICA CORPORATION
- 20.16.1. BUSINESS OVERVIEW
- 20.16.2. PRODUCT OFFERINGS
20.17. ROBERT BOSCH
- 20.17.1. BUSINESS OVERVIEW
- 20.17.2. PRODUCT OFFERINGS
20.18. RECO
- 20.18.1. BUSINESS OVERVIEW
- 20.18.2. PRODUCT OFFERINGS
20.19. RINNAI AMERICA CORPORATION
- 20.19.1. BUSINESS OVERVIEW
- 20.19.2. PRODUCT OFFERINGS
20.20. SIOUX CORPORATION
- 20.20.1. BUSINESS OVERVIEW
- 20.20.2. PRODUCT OFFERINGS
20.21. SUNMAXX SOLAR
- 20.21.1. BUSINESS OVERVIEW
- 20.21.2. PRODUCT OFFERINGS
20.22. SUN EARTH
- 20.22.1. BUSINESS OVERVIEW
- 20.22.2. PRODUCT OFFERINGS
20.23. STIEBEL ELTRON
- 20.23.1. BUSINESS OVERVIEW
- 20.23.2. PRODUCT OFFERINGS
20.24. VIESSMANN MANUFACTURING COMPANY
- 20.24.1. BUSINESS OVERVIEW
- 20.24.2. PRODUCT OFFERINGS
20.25. WATTS WATER TECHNOLOGIES
- 20.25.1. BUSINESS OVERVIEW
- 20.25.2. PRODUCT OFFERINGS
20.26. WESTINGHOUSE ELECTRIC COMPANY
- 20.26.1. BUSINESS OVERVIEW
- 20.26.2. PRODUCT OFFERINGS
20.27. WHIRLPOOL
- 20.27.1. BUSINESS OVERVIEW
- 20.27.2. PRODUCT OFFERINGS

21. REPORT SUMMARY

21.1. KEY TAKEAWAYS
21.2. STRATEGIC RECOMMENDATIONS

22. QUANTITATIVE SUMMARY

22.1. MARKET BY GEOGRAPHY
22.2. MIDWEST
- 22.2.1. PRODUCT TYPE: MARKET SIZE & FORECAST
- 22.2.2. CATEGORY: MARKET SIZE & FORECAST
- 22.2.3. END-USER: MARKET SIZE & FORECAST
- 22.2.4. DISTRIBUTION CHANNEL: MARKET SIZE & FORECAST
22.3. NORTHEAST
- 22.3.1. PRODUCT TYPE: MARKET SIZE & FORECAST
- 22.3.2. CATEGORY: MARKET SIZE & FORECAST
- 22.3.3. END-USER: MARKET SIZE & FORECAST
- 22.3.4. DISTRIBUTION CHANNEL: MARKET SIZE & FORECAST
22.4. SOUTH
- 22.4.1. PRODUCT TYPE: MARKET SIZE & FORECAST
- 22.4.2. CATEGORY: MARKET SIZE & FORECAST
- 22.4.3. END-USER: MARKET SIZE & FORECAST
- 22.4.4. DISTRIBUTION CHANNEL: MARKET SIZE & FORECAST
22.5. WEST
- 22.5.1. PRODUCT TYPE: MARKET SIZE & FORECAST
- 22.5.2. CATEGORY: MARKET SIZE & FORECAST
- 22.5.3. END-USER: MARKET SIZE & FORECAST
- 22.5.4. DISTRIBUTION CHANNEL: MARKET SIZE & FORECAST

23. APPENDIX

23.1. RESEARCH METHODOLOGY
23.2. RESEARCH PROCESS
23.3. REPORT ASSUMPTIONS & CAVEATS
- 23.3.1. KEY CAVEATS
- 23.3.2. CURRENCY CONVERSION
23.4. ABBREVIATIONS