PUBLISHER: Markets & Data | PRODUCT CODE: 1652145
PUBLISHER: Markets & Data | PRODUCT CODE: 1652145
Global solar water heater market is projected to witness a CAGR of 5.58% during the forecast period 2025-2032, growing from USD 4.07 billion in 2024 to USD 6.28 billion in 2032. The market has experienced significant growth in recent years and is expected to maintain a strong pace of expansion in the coming years.
The demand for solar water heaters is growing at a rapid pace in the global market due to a combination of environmental, economic, and technological factors. As global awareness of climate change intensifies, consumers and governments alike are seeking sustainable and eco-friendly solutions for energy consumption. Solar water heater product function on the principle of capturing solar energy to heat water without emitting greenhouse gases which makes the product an attractive alternative solution to traditional heating methods.
In addition, increasing energy costs and the potential for significant savings on utility bills are driving the demand for solar water heaters in residential applications. Incentive programs and rebates from governments across various regions are also promoting the use of solar technologies, creating substantial opportunities for the solar water heater market in commercial and industrial applications. As technology continues to advance, solar water heaters are becoming more efficient and reliable, and they are expected to grow strongly in the market as more consumers recognize the long-term benefits of investing in renewable energy solutions. Companies are launching innovative solar water heaters to capture a larger share of the water heater market across different geographies.
For instance, in December 2024, Panasonic Corporation decided to launch a new version of Eco Cute CO2 heat pump. The device is equipped with solar radiation which helps in the production of hot water for domestic use in households. This development will help the company to increase revenue and market share in the industry.
For instance, in March 2022, Panasonic Corporation decided to launch a solar heat pump solution for water heating named Eco Cute. The solution includes a heat pump and hot water storage unit which saves energy and generates hot water at cost cost-effective rate. This development helped the company to increase revenue.
The Increasing Emphasis on Environmentally Friendly and Energy-Efficient Technologies is Driving Market Growth
The growing focus on renewable energy sources to address global warming and decrease carbon emissions has spurred investment in renewable energy technologies, including solar water heaters. Solar water heaters are seen as eco-friendly options that help reduce carbon footprints by harnessing renewable energy. Changes in the energy sector, driven by increased investments in renewable energy sources across various regions, have led to a surge in the production of solar water heaters. Moreover, regions are setting ambitious targets such as net-zero emissions and reduced carbon emissions, which have encouraged people to adopt energy-efficient technologies. This shift is raising the demand for high-quality solar water heaters in the market to achieve these objectives.
Residential and commercial sectors are seeking sustainable solutions to control environmental degradation. Solar water heaters utilize clean energy sources that significantly reduce carbon footprints. The residential sector is adopting efficient technologies, which help facilitate the transition toward renewable energy sources. Governments and higher authorities are encouraging the installation of renewable energy technologies by offering incentives such as tax breaks, rebates, and subsidies, making these options attractive for both residential and commercial sectors.
In addition, solar water heaters save a significant amount on energy bills as the running cost is reduced by 25% to 40% during winter and by up to 75% during summer. The cost and energy efficiency feature appeals to both residential and commercial users to opt for solar water heaters which drive its demand in the market.
For instance, in November 2023, a new residence hall at Creighton University in the United States decided to opt for the solar water heater to make a transition away from burning fossil fuels for heating. The project is a carbon-free system for heating water. This development showcases the adoption of solar water heaters in commercial applications which will help increase market growth in coming years.
Rapid Urbanization and Economic Growth Augmenting Market Size
The growing trend of urbanization demands more hot water in the residential, industrial, and commercial sectors. Solar water heaters provide an efficient solution to the increasing demand for hot water, as they offer a sustainable and reliable supply without relying on additional energy sources. Rapid urbanization often coincides with significant investments in infrastructure development, including the construction of residential buildings, commercial complexes, and industrial facilities that are looking to adopt integrated solar water heating systems. Moreover, newly constructed buildings adhere to green building codes and standards that promote energy-efficient technologies, driving the demand for solar water heaters in the market.
The residential sector is seeking cost-effective alternatives to traditional water heating methods. There is a high demand for hot water in residential premises due to changing lifestyles and increased usage for bathing, cooking, and other purposes. Solar water heaters are ideal for meeting this growing demand while being both sustainable and efficient. Many households have the option to use solar water heaters, especially in regions with high energy costs. The construction industry is also looking to invest in energy-efficient technologies and has gained momentum in green building practices, which are driving demand for solar water heaters in the market.
For instance, in November 2024, the United States Green Building Council have pushed for expansion of tax credits for energy-efficient building retrofits. The incentives will cover new and retrofit building energy efficiency investments for building envelope improvements and upgrades to HVAC, water heating and energy management systems. This development will increase the demand for the solar water heaters in green building construction in the coming years.
Upcoming Improvements in Design and Solar Technology Create Opportunities for the Market
The ongoing improvements in technology have enhanced the efficiency and reliability of solar water heaters. Several manufacturers are looking to adopt improved designs and solar technologies, which could drive demand for solar water heaters in the market. The adoption of upcoming innovations in technology and materials has led to better performance of these heaters.