Tankless Water Heater Market Size, Share, and Growth Analysis, By Product Type (Electric, Gas), By Installation (Indoor, Outdoor), By Technology, By Feature, By Application, By Flow Rate, By Region - Industry Forecast 2026-2033

Global Tankless Water Heater Market size was valued at USD 4.7 Billion in 2024 and is poised to grow from USD 5.13 Billion in 2025 to USD 10.37 Billion by 2033, growing at a CAGR of 9.2% during the forecast period (2026-2033).

The demand for tankless water heaters is on the rise, propelled by a growing number of eco-conscious consumers seeking energy-efficient solutions. Unlike traditional storage models, tankless water heaters significantly reduce energy consumption, often achieving up to 34% greater efficiency. Their appeal lies in their compact design, making them ideal for smaller spaces, as they eliminate the need for bulky tanks and provide hot water on demand, thus preventing wasteful constant heating. While the initial cost may be higher, the long-term savings on utility bills-estimated at $100 to $200 annually-along with extended warranties and lifespans, make them an attractive investment. This shift towards tankless systems aligns with increasing consumer awareness and preference for sustainable living solutions, indicating robust market growth potential.

Top-down and bottom-up approaches were used to estimate and validate the size of the Global Tankless Water Heater market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Global Tankless Water Heater Market Segments Analysis

Global Tankless Water Heater Market is segmented by Product Type, Installation, Technology, Feature, Application, Flow Rate and region. Based on Product Type, the market is segmented into Electric and Gas. Based on Installation, the market is segmented into Indoor and Outdoor. Based on Technology, the market is segmented into Condensing Technology and Non-condensing Technology. Based on Feature, the market is segmented into Manual and Remote Control. Based on Application, the market is segmented into Residential and Commercial. Based on Flow Rate, the market is segmented into High and Low. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.

Driver of the Global Tankless Water Heater Market

The rising popularity of tankless water heaters can be attributed to their exceptional energy efficiency. These systems heat water on demand, resulting in significant energy savings of 24% to 34% compared to traditional tank heaters. This feature appeals particularly to environmentally conscious consumers who are eager to lower their energy bills and embrace long-term financial advantages. As the trend toward energy-efficient solutions continues to gain momentum, the market is experiencing increased demand for these innovative heating products, driven by the desire to both minimize environmental impact and optimize household energy consumption.

Restraints in the Global Tankless Water Heater Market

One of the primary challenges facing the global tankless water heater market is the higher installation costs compared to conventional water heating systems. Although tankless water heaters can lead to long-term savings, the upfront expenses may deter potential customers. Additionally, the installation process often necessitates alterations to existing electrical and plumbing setups, further increasing the initial investment. This higher initial price point can dissuade consumers from choosing tankless options, consequently hindering the overall growth of the market. As a result, the perception of tankless systems as a more costly alternative limits their adoption among budget-conscious buyers.

Market Trends of the Global Tankless Water Heater Market

The Global Tankless Water Heater market is witnessing a significant trend towards smart features, as consumers increasingly embrace connected technologies in their homes. This surge in demand is fueled by the desire for enhanced convenience and energy efficiency, prompting manufacturers to integrate capabilities such as temperature monitoring, smartphone controls, and Wi-Fi connectivity into their products. As homeowners prioritize seamless control over their water heating systems and seek to optimize energy consumption, tankless water heaters equipped with smart technology are becoming a preferred choice. This shift highlights a broader market inclination towards innovative solutions that align with the growing smart home movement.