Tankless Water Heater Global Market Report 2026

A tankless water heater is a specific type of water heating system that heats water on demand without requiring a storage tank. This system operates by utilizing either an electric element or a gas burner to heat water as it flows through a pipe to the unit. The key advantage of a tankless water heater is its ability to provide a continuous and nearly limitless supply of hot water, as it heats the water directly at the moment it is needed, eliminating the need for a reservoir.

Tankless water heaters come in two main types such as condensing and non-condensing. A condensing tankless water heater is designed to recycle the excess heat generated during the water heating process, resulting in increased fuel efficiency. These water heaters utilize various energy sources, including electric and gas, and find applications in various settings such as residential and commercial environments. Condensing tankless water heaters are particularly valued for their ability to optimize energy usage and enhance overall efficiency in heating water.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

Tariffs on steel, copper components, heating elements and electronic control modules have increased the production costs of tankless water heaters, especially impacting manufacturers reliant on imported metal assemblies from East Asia. Residential and commercial segments in North America and Europe face the most pronounced cost pressures due to heavy import dependence. Despite higher pricing challenges, tariffs are driving increased local manufacturing, component sourcing diversification and innovation in efficient heater designs, creating selective long term benefits for regional producers.

The tankless water heaters market research report is one of a series of new reports from The Business Research Company that provides tankless water heaters market statistics, including the tankless water heaters industry global market size, regional shares, competitors with a tankless water heaters market share, detailed tankless water heaters market segments, market trends and opportunities, and any further data you may need to thrive in the tankless water heaters industry. This tankless water heaters market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The tankless water heater market size has grown strongly in recent years. It will grow from $4.86 billion in 2025 to $5.17 billion in 2026 at a compound annual growth rate (CAGR) of 6.6%. The growth in the historic period can be attributed to rising shift from storage heaters to tankless systems, increasing demand for continuous hot water supply, growth in residential energy efficient appliance adoption, early advancements in electric and gas heating elements, expanding installation of compact heating systems.

The tankless water heater market size is expected to see strong growth in the next few years. It will grow to $6.69 billion in 2030 at a compound annual growth rate (CAGR) of 6.6%. The growth in the forecast period can be attributed to growing preference for smart home integrated heaters, rising adoption of condensing models for higher efficiency, increasing consumer shift toward low energy consumption solutions, expansion of commercial tankless heater applications, advancements in high performance heating technologies. Major trends in the forecast period include growing integration of energy efficient tankless heating technologies, rising adoption of iot enabled smart water heating systems, increasing use of AI based temperature and flow optimization, advancements in automated manufacturing for tankless heater components, shift toward eco friendly and low emission water heating solutions.

The growing government efforts to promote environmentally friendly water heaters are expected to propel the growth of the tankless water heater market going forward. Government efforts refer to the actions, initiatives, and programs undertaken by a government to address various issues, achieve specific goals, and meet the needs of its citizens. Governments can encourage the adoption of energy-efficient tankless water heaters over traditional tank-based models by establishing standards and regulations for appliances while also implementing incentive programs aimed at both consumers and manufacturers to promote the uptake of tankless technology. For instance, in July 2023, according to the Department of Energy, a US-based government agency, the U.S. Department of Energy put forth new energy efficiency standards, aiming to achieve annual savings of $11.4 billion for consumers on their energy and water bills. Aiming to save $198 billion for Americans and reduce 501 million metric tons of CO2 over 30 years, the proposed regulations, which take effect in 2029, are equal to the yearly emissions of 63 million households, or roughly 50% of all dwellings in the United States. Therefore, the growing government efforts to promote environmentally friendly water heaters are driving the growth of the tankless water heater market.

Major companies operating in the tankless water heater market are developing innovative products, such as electric tankless water heaters, to better serve customers with advanced features. Electric tankless water heaters are on-demand water heating systems that use electricity as their primary source of power. For instance, in January 2023, Bosch Thermotechnology, a Germany-based provider of heating and hot water products, launched the Tronic 4000 C and Tronic 6100 C. The Tronic 4000 C stands out as one of the most compact and energy-efficient electric tankless water heaters available, specifically designed for point-of-use and under-sink installations. Remarkably small at only 8.5" X 13" and weighing just 4.4 lbs., it can be conveniently wall-mounted directly under the sink. Operating solely on electricity and lacking a water-holding tank, the Tronic 4000 C requires no venting and entails virtually no maintenance, making it an exceptional choice for users seeking space-saving and hassle-free solutions. In contrast, the Tronic 6100 C introduces a distinct feature by providing on-demand hot water for entire households. Bosch, with the Tronic 6100 C, seamlessly combines energy efficiency and convenience into a beautifully streamlined, easy-to-install design that is both compact and lightweight, catering specifically to whole-house applications and ensuring continuous and efficient hot water supply.

In December 2024, Rinnai America, a US-based heating and energy solutions company, collaborated with Homes For Our Troops to support injured veterans. This collaboration seeks to deliver safe, accessible, and fully customized homes for severely injured veterans, improve their quality of life, ensure comfort and mobility, and foster long-term independence. Homes For Our Troops is a US-based nonprofit organization committed to constructing specially adapted homes for veterans injured in combat.

Major companies operating in the tankless water heater market are Robert Bosch GmbH, General Electric, Haier Group Corporation, Honeywell International Inc., Whirlpool Corporation, Paloma Industries Ltd., Westinghouse Electric Corporation, Vaillant Group, A.O. Smith Corporation, RinnAI Corporation, Ariston Thermo Group, Rheem Manufacturing Company, Stiebel Eltron GmbH & Co. KG, Bajaj Electricals Ltd., Groupe Atlantic, Ferroli S.p.A., V-Guard Industries Ltd., Bradford White Corporation, Noritz Corporation, EcoSmart Green Energy Products, Inc., Navien Inc., Hubbell Electric Heater Company, Laars Heating Systems, Eccotemp Systems LLC, Takagi Industrial Co. Ltd.

Europe was the largest region in the tankless water heater market in 2025. North America is expected to be the fastest-growing region in the forecast period. The regions covered in the tankless water heater market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the tankless water heater market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The tankless water heater market consists of sales of heat exchangers, burners, fans, flow sensors, pressure release valves, and temperature sensors. Values in this market are 'factory gate' values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

Tankless Water Heater Market Global Report 2026 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.

This report focuses tankless water heater market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.

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Where is the largest and fastest growing market for tankless water heater ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The tankless water heater market global report from the Business Research Company answers all these questions and many more.

The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, total addressable market (TAM), market attractiveness score (MAS), competitive landscape, market shares, company scoring matrix, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.

• The market characteristics section of the report defines and explains the market. This section also examines key products and services offered in the market, evaluates brand-level differentiation, compares product features, and highlights major innovation and product development trends.
• The supply chain analysis section provides an overview of the entire value chain, including key raw materials, resources, and supplier analysis. It also provides a list competitor at each level of the supply chain.
• The updated trends and strategies section analyses the shape of the market as it evolves and highlights emerging technology trends such as digital transformation, automation, sustainability initiatives, and AI-driven innovation. It suggests how companies can leverage these advancements to strengthen their market position and achieve competitive differentiation.
• The regulatory and investment landscape section provides an overview of the key regulatory frameworks, regularity bodies, associations, and government policies influencing the market. It also examines major investment flows, incentives, and funding trends shaping industry growth and innovation.
• The market size section gives the market size ($b) covering both the historic growth of the market, and forecasting its development.
• The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.
• The total addressable market (TAM) analysis section defines and estimates the market potential compares it with the current market size, and provides strategic insights and growth opportunities based on this evaluation.
• The market attractiveness scoring section evaluates the market based on a quantitative scoring framework that considers growth potential, competitive dynamics, strategic fit, and risk profile. It also provides interpretive insights and strategic implications for decision-makers.
• Market segmentations break down the market into sub markets.
• The regional and country breakdowns section gives an analysis of the market in each geography and the size of the market by geography and compares their historic and forecast growth.
• Expanded geographical coverage includes Taiwan and Southeast Asia, reflecting recent supply chain realignments and manufacturing shifts in the region. This section analyzes how these markets are becoming increasingly important hubs in the global value chain.
• The competitive landscape chapter gives a description of the competitive nature of the market, market shares, and a description of the leading companies. Key financial deals which have shaped the market in recent years are identified.
• The company scoring matrix section evaluates and ranks leading companies based on a multi-parameter framework that includes market share or revenues, product innovation, and brand recognition.

Scope

• Markets Covered:1) By Type: Condensing; Non-Condensing
• 2) By Energy Source: Electric; Gas
• 3) By Application: Residential; Commercial
• Subsegments:
• 1) By Condensing: Natural Gas Condensing Water Heaters; Propane Condensing Water Heaters
• 2) By Non-Condensing: Natural Gas Non-Condensing Water Heaters; Propane Non-Condensing Water Heaters; Electric Non-Condensing Water Heaters
• Companies Mentioned: Robert Bosch GmbH; General Electric; Haier Group Corporation; Honeywell International Inc.; Whirlpool Corporation; Paloma Industries Ltd.; Westinghouse Electric Corporation; Vaillant Group; A.O. Smith Corporation; Rinnai Corporation; Ariston Thermo Group; Rheem Manufacturing Company; Stiebel Eltron GmbH & Co. KG; Bajaj Electricals Ltd.; Groupe Atlantic; Ferroli S.p.A.; V-Guard Industries Ltd.; Bradford White Corporation; Noritz Corporation; EcoSmart Green Energy Products, Inc.; Navien Inc.; Hubbell Electric Heater Company; Laars Heating Systems; Eccotemp Systems LLC; Takagi Industrial Co. Ltd.
• Countries: Australia; Brazil; China; France; Germany; India; Indonesia; Japan; Taiwan; Russia; South Korea; UK; USA; Canada; Italy; Spain.
• Regions: Asia-Pacific; South East Asia; Western Europe; Eastern Europe; North America; South America; Middle East; Africa
• Time Series: Five years historic and ten years forecast.
• Data: Ratios of market size and growth to related markets, GDP proportions, expenditure per capita,
• Data Segmentations: country and regional historic and forecast data, market share of competitors, market segments.
• Sourcing and Referencing: Data and analysis throughout the report is sourced using end notes.
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