Electric Water Heater Market – Global Industry Size, Share, Trends, Opportunity and Forecast, By Type (Tank, Tankless), By Application (Residential, Commercial), By Distribution Channel (Offline, Online), By Region & Competition, 2020-2030F

Global Electric Water Heater Market was valued at USD 30.01 billion in 2024 and is expected to grow to USD 41.31 billion by 2030 with a CAGR of 5.52% during the forecast period. The global electric water heater market is witnessing steady growth driven by increasing residential and commercial demand for reliable hot water solutions. Rising urbanization, improving living standards, and expanding construction activities are boosting adoption. Technological advancements, including smart controls, energy-efficient models, and rapid heating capabilities, are enhancing product appeal. Government initiatives promoting energy conservation and the shift toward sustainable appliances further support market expansion. Additionally, the replacement of traditional water heating systems with modern electric alternatives is accelerating growth. The market is also benefiting from the expansion of e-commerce, enabling wider product availability and improved consumer accessibility worldwide.

Key Market Drivers

Rising Urbanization and Increasing Residential Construction

The rapid pace of urbanization worldwide is significantly contributing to the growing demand for electric water heaters. As more people migrate to urban areas, the need for modern housing infrastructure equipped with essential utilities, including efficient hot water systems, continues to expand. According to the United Nations, 68% of the global population is projected to live in urban areas by 2050, up from 56% in 2023, intensifying the demand for residential amenities such as water heating solutions. Countries in Asia Pacific, such as China and India, are experiencing large-scale residential construction to accommodate growing urban populations. These new constructions often integrate electric water heaters as a standard feature, given their ease of installation, relatively compact design, and compatibility with urban electricity infrastructure.

Furthermore, in developed regions like North America and Europe, urban redevelopment and renovation projects are also creating opportunities for replacing outdated water heating systems with more efficient electric alternatives. This urbanization trend, coupled with rising household income levels, is encouraging consumers to invest in advanced appliances that offer greater convenience, reliability, and energy efficiency.

Government Energy Efficiency Initiatives and Regulations

Government policies and energy conservation regulations are playing a crucial role in boosting the adoption of electric water heaters. Many countries are implementing strict energy efficiency standards for appliances, including water heaters, to reduce electricity consumption and greenhouse gas emissions. According to the International Energy Agency (IEA), energy efficiency improvements could deliver over 40% of the emission reductions needed to meet global climate goals by 2030, prompting stronger regulatory action worldwide. Initiatives like the U.S. Department of Energy’s efficiency standards and the European Union’s Eco-design Directive have encouraged manufacturers to produce more sustainable models. Incentive programs, rebates, and tax benefits offered to consumers who purchase energy-efficient water heaters further stimulate demand.

Additionally, in regions where renewable energy integration is expanding, electric water heaters can be powered by solar panels or wind energy, supporting the global shift toward cleaner energy consumption. These regulatory measures not only enhance environmental protection but also provide economic advantages for consumers and manufacturers, fostering steady market growth.

Growing Replacement Demand and Shift from Conventional Systems

The replacement of aging, inefficient water heating systems is another key driver in the electric water heater market. Traditional water heaters powered by gas, oil, or coal often have higher operational costs, greater maintenance needs, and a larger environmental footprint. According to the U.S. Department of Energy, water heating accounts for about 18% of residential energy use in the United States, making efficiency upgrades a significant source of cost savings. As consumers become more aware of the benefits of electric water heaters such as lower emissions, higher energy efficiency, and ease of installation they are increasingly opting for electric models during renovation or upgrade cycles. The growing emphasis on sustainability and cost savings is prompting both residential and commercial users to switch to electric alternatives.

Additionally, the availability of tankless and instant water heaters, which offer space-saving designs and continuous hot water supply, is attracting customers who seek modern, efficient, and eco-friendly options. This replacement trend is particularly strong in developed markets where aging infrastructure is common and in developing regions experiencing rapid modernization.

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Key Market Challenges

High Electricity Consumption and Operating Costs

One of the most significant challenges for the electric water heater market is the relatively high electricity consumption associated with these appliances. While modern electric water heaters are increasingly energy-efficient, heating water still requires a substantial amount of energy, which can result in higher utility bills for consumers—especially in regions where electricity prices are high. In developing countries, where electricity costs represent a larger portion of household expenses, this can deter adoption. Even in developed nations, consumers may opt for alternative water heating methods, such as solar or gas-powered systems, to reduce operating costs. Additionally, prolonged use of electric water heaters in regions with low energy efficiency awareness can lead to increased power demand, putting pressure on local power grids. This challenge not only affects consumer affordability but also raises concerns about the environmental impact of electricity generation, especially in areas still reliant on fossil fuel-based power.

Competition from Alternative Water Heating Technologies

Electric water heaters face strong competition from alternative technologies, including gas, solar, and heat pump water heaters. In regions with well-developed gas infrastructure, gas-powered water heaters are often preferred due to their lower operating costs and ability to provide continuous hot water without high energy bills. Similarly, in areas with abundant sunlight, solar water heating systems are gaining traction as an eco-friendly and cost-effective option, particularly when supported by government incentives. Heat pump water heaters, which use ambient air or geothermal energy to heat water, are also emerging as an attractive alternative because of their high energy efficiency. This growing range of competing technologies poses a challenge for electric water heater manufacturers, as they must continuously innovate and enhance their products to remain competitive. Without differentiation through advanced features, energy savings, or cost advantages, electric models risk losing market share to these alternatives.

Key Market Trends

Rising Popularity of Tankless and Instant Water Heaters

Consumer demand is shifting toward compact, tankless, and instant electric water heaters that offer space-saving designs and on-demand hot water supply. Unlike traditional storage models, tankless systems heat water only when needed, eliminating standby energy loss and significantly improving efficiency. According to the U.S. Department of Energy, tankless water heaters can be 24%–34% more energy efficient than conventional storage water heaters for homes using 41 gallons or less of hot water daily. This makes them ideal for smaller urban apartments, offices, and commercial spaces where space is limited.

Moreover, instant water heaters have a longer lifespan, lower maintenance requirements, and can provide continuous hot water without the limitations of tank capacity. With urban living spaces becoming smaller and modern lifestyles demanding convenience, manufacturers are introducing sleek, wall-mounted designs with rapid heating capabilities. The growing adoption of tankless technology also reflects consumer preferences for appliances that combine energy savings with user-friendly features. In developed regions, this trend is accelerating as homeowners replace older storage units with modern, compact alternatives during renovations.

Integration of Smart Technologies and IoT Connectivity

Smart technology integration is transforming the electric water heater market, offering consumers greater control, efficiency, and convenience. Internet of Things (IoT)-enabled water heaters allow users to monitor energy consumption, adjust temperature settings, and schedule heating cycles through smartphone apps or voice-controlled assistants. Advanced systems can even learn user patterns and automatically optimize heating schedules to reduce waste. Remote diagnostics and predictive maintenance alerts are additional features that improve reliability and reduce downtime. These smart capabilities are especially appealing to tech-savvy consumers and those interested in reducing utility bills through better energy management. Furthermore, the rise of smart homes is creating synergies between connected electric water heaters and other appliances, allowing for integrated energy optimization across an entire household. This trend also supports sustainability goals, as smarter systems can automatically switch to renewable energy sources when available, further reducing environmental impact.

Segmental Insights

Type Insights

The tank segment dominated the global electric water heater market due to its widespread adoption in both residential and commercial applications. These systems store pre-heated water in insulated tanks, ensuring a steady supply for multiple uses simultaneously. They are preferred for their affordability, ease of installation, and suitability in areas with high hot water demand. Tank models are available in various capacities, catering to households of different sizes, and are compatible with existing plumbing systems. Continuous product innovations, such as better insulation, corrosion-resistant materials, and energy-efficient heating elements, further strengthen their market position, making them a reliable and cost-effective choice.

Distribution Channel Insights

The offline segment dominated the global electric water heater market as consumers often prefer purchasing from physical retail stores, showrooms, and specialty appliance outlets for hands-on product evaluation. Offline channels allow buyers to inspect build quality, compare models in person, and receive expert guidance from sales representatives, which builds trust and confidence in purchase decisions. Many customers also value the immediate availability of installation and after-sales services offered by offline retailers. Additionally, established distribution networks, strong brand presence in local markets, and promotional offers in physical stores contribute to the segment’s continued dominance, especially in regions with lower online penetration.

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Regional Insights

North America dominated the global electric water heater market, driven by high living standards, widespread access to electricity, and strong demand for advanced home appliances. The region’s well-established residential and commercial infrastructure supports large-scale adoption, while frequent home renovations and upgrades fuel replacement demand. Consumers in the United States and Canada prioritize energy-efficient models, aided by stringent government regulations and incentive programs promoting sustainable appliances. Technological advancements, such as smart water heaters with IoT connectivity, are rapidly gaining traction. Strong retail networks, both offline and online, combined with high awareness of product benefits, further strengthen North America’s leadership in the market.

Recent Developments

• ​In January 2024, Laars Heating Systems, a subsidiary of Bradford White Corporation, acquired Electro Industries, Inc., headquartered in Monticello, Minnesota. This strategic acquisition broadens Laars’ portfolio of residential, commercial, and industrial electric heating solutions, while incorporating Electro Industries’ assets and facility into its U.S. manufacturing operations

• In January 2023, BDR Thermea Group acquired Fortes Energy Systems, an international specialist in collective heat and cold networks for residential, utility, and industrial applications. This acquisition expands BDR Thermea’s “energy transition solutions” portfolio, complementing its offerings in heat pumps and hybrid systems.

• In December 2024, Bradford White introduced its Brute XTR line of commercial boilers and volume water heaters, available in six sizes ranging from 399 to 1500 MBH. Delivering over 96% efficiency, the models feature touchscreen controls, stainless-steel heat exchangers, a 10:1 turndown ratio, variable-speed pump, versatile venting options, and top-mounted connections for simplified installation and maintenance.

Key Market Players

• A.O. Smith Corporation
• Bosch Thermotechnik GmbH
• General Electric Company
• Haier Electronics Group Co., Ltd
• Ariston Thermo S.p.A.
• Mitsubishi Electric Corporation
• Bradford White Corporation
• RHEEM Manufacturing Company
• Valliant Group
• Viessmann Group

Report Scope:

In this report, the Global Electric Water Heater Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•   Electric Water Heater Market, By Type:

o   Tank

o   Tankless

• Electric Water Heater Market, By Application:

o   Residential

o   Commercial

• Electric Water Heater Market, By Distribution Channel:

o   Offline

o   Online

• Electric Water Heater Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   Asia-Pacific

§  China

§  Japan

§  India

§  South Korea

§  Indonesia

o   South America

§  Argentina

§  Colombia

§  Brazil

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

§  Turkey

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Electric Water Heater Market.

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Global Electric Water Heater Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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