Global Commercial Water Heaters Market Overview:
As per MRFR analysis, the Commercial Water Heaters Market Size was estimated at 33.86 (USD Billion) in 2022. The Commercial Water Heaters Market Industry is expected to grow from 35.78(USD Billion) in 2023 to 58.8 (USD Billion) by 2032. The Commercial Water Heaters Market CAGR (growth rate) is expected to be around 5.67% during the forecast period (2024 - 2032).
Key Commercial Water Heaters Market Trends Highlighted
Key market drivers for commercial water heaters include increasing demand for energy-efficient solutions, stringent government regulations on energy consumption, and growing awareness of the environmental impact of traditional water heating systems. The rising popularity of sustainable construction practices is also driving demand for low-carbon and renewable energy-powered water heaters.
Opportunities in the commercial water heaters market lie in the exploration of innovative technologies such as solar and heat pump water heaters. The integration of smart controls and remote monitoring systems presents opportunities for enhanced energy management and cost savings. Additionally, the growing adoption of district heating systems in urban areas creates opportunities for large-scale commercial water heating solutions.
Recent trends in the commercial water heaters market include the increasing adoption of tankless water heaters due to their space-saving design and continuous hot water supply. The demand for high-efficiency water heaters with ENERGY STAR certifications is also rising, driven by government incentives and consumer awareness. Moreover, the emergence of hybrid water heaters that combine multiple heating technologies offers flexibility and efficiency.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Commercial Water Heaters Market Drivers
Growing Demand for Energy-Efficient Water Heaters
The rising cost of energy has led to a growing demand for energy-efficient water heaters. Commercial water heaters account for a significant portion of energy consumption in commercial buildings, and businesses are increasingly looking for ways to reduce their energy costs. Energy-efficient water heaters can help businesses save money on their energy bills and reduce their environmental impact. The growing demand for energy-efficient water heaters is a key driver of growth in the Commercial Water Heaters Market Industry.
Increasing Adoption of Green Building Standards
Green building standards are gradually becoming common in many countries. These standards encourage the application of building construction that is environmentally conscious and sustainable. By adopting the green building standards, businesses can cut down the environmental impact, as well as earn the LEED certification. The common use of the green building standards increases the demand for a commercial water heater that meets the green building standards.
Rising Demand for Commercial Water Heaters in Developing Countries
The demand for commercial water heaters is increasing in developing countries. This is because, in these countries, there is continued urbanization and industrialization. As such, as more people move into the cities and industries continue to come up, the need for commercial water heaters in public facilities and major establishments, such as hotels, is increasing.
Commercial Water Heaters Market Segment Insights:
Commercial Water Heaters Market Fuel Type Insights
The Commercial Water Heaters Market is segmented based on fuel type into electric, gas, oil, and solar. Among these, the electric segment is projected to hold the largest market share during the forecast period, owing to increasing adoption in various commercial applications. Electric water heaters offer several advantages, including energy efficiency, ease of installation, and low maintenance costs. Governments across the globe are promoting the adoption of electric water heaters through various incentives and regulations, further driving segment growth.
The gas segment is expected to witness significant growth over the coming years, driven by its cost-effectiveness and wide availability. Gas water heaters are commonly used in regions with access to natural gas pipelines, making them a preferred choice for commercial establishments with high hot water demand. The oil segment holds a small market share due to environmental concerns and fluctuating oil prices. Oil-fired water heaters are primarily used in remote areas or where natural gas is not readily available. However, strict emission regulations and the rising popularity of renewable energy sources are expected to limit the growth of this segment in the long run.
The solar segment is gaining traction as a sustainable and cost-effective water heating solution. Solar water heaters utilize solar energy to heat water, reducing energy consumption and operating costs. Government incentives and increasing awareness of environmental benefits are driving the adoption of solar water heaters in commercial buildings. Overall, the Commercial Water Heaters Market is expected to witness steady growth in the coming years, driven by increasing demand for energy-efficient and sustainable water heating solutions in various commercial applications.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Commercial Water Heaters Market Capacity Insights
The capacity segment plays a crucial role in shaping the Commercial Water Heaters Market revenue. Categorized into small (less than 10 gallons), medium (10-50 gallons), and large (over 50 gallons), each capacity range caters to specific commercial applications. Small-capacity water heaters are commonly used in small businesses, restaurants, and offices, accounting for a significant portion of the market. Medium-capacity water heaters are ideal for mid-sized commercial establishments, such as hotels, hospitals, and schools. Large-capacity water heaters are typically employed in industrial settings, where high volumes of hot water are required for manufacturing processes and other industrial applications.
According to Commercial Water Heaters Market segmentation data, the large-capacity segment is projected to witness the highest growth rate in the coming years due to increasing demand from expanding industries.
Commercial Water Heaters Market End User Insights
The end-user segment of the Commercial Water Heaters Market holds immense potential, driven by diverse applications across industries. In 2023, the hospitality sector accounted for a significant market share of around 28.7%, attributed to the growing demand for hot water in hotels, restaurants, and resorts. The healthcare industry emerged as another key end user, with a market share of 21.5%, owing to the need for reliable hot water supply in hospitals, clinics, and nursing homes. Commercial buildings, including offices, retail stores, and educational institutions, collectively held a market share of 35.4% in 2023, indicating the importance of hot water for employee comfort and hygiene.
The industrial sector, encompassing manufacturing facilities, warehouses, and processing plants, accounted for the remaining market share of 14.4%, driven by the need for hot water in various industrial processes. The Commercial Water Heaters Market is projected to grow substantially over the forecast period, with an estimated market revenue of 40.58 billion USD by 2026, presenting lucrative opportunities for market players.
Commercial Water Heaters Market Installation Type Insights
The Commercial Water Heaters Market is segmented based on installation type into indoor and outdoor. The indoor installation segment held the largest market share in 2023, and it is expected to continue to dominate the market during the forecast period. The growth of this segment can be attributed to the increasing adoption of indoor water heaters in commercial buildings, such as offices, hospitals, and hotels. Indoor water heaters are more efficient and space-saving than outdoor water heaters, making them a preferred choice for commercial applications.
The outdoor installation segment is also expected to witness significant growth during the forecast period, owing to the increasing demand for outdoor water heaters in industrial and agricultural applications. Outdoor water heaters are more durable and can withstand harsh weather conditions, making them suitable for use in outdoor areas.
Commercial Water Heaters Market Efficiency Insights
The Commercial Water Heaters Market is segmented by efficiency into Standard, Energy Efficient, and Ultra-High Efficiency. The Energy Efficient segment is expected to hold the largest market share in 2023, owing to the increasing awareness of energy conservation and government regulations promoting the adoption of energy-efficient appliances. The Ultra-High Efficiency segment is projected to witness the highest growth rate during the forecast period, driven by the rising demand for water heaters with superior energy performance and lower operating costs.
The Commercial Water Heaters Market revenue for the Energy Efficient segment is expected to reach USD 26.46 billion by 2024, growing at a CAGR of 6.8%. The Ultra-High Efficiency segment is anticipated to grow at a CAGR of 8.2% during the same period, reaching a market size of USD 15.27 billion by 2024.
Commercial Water Heaters Market Regional Insights
The regional segmentation of the Commercial Water Heaters Market presents distinct opportunities and challenges for market players. North America held a dominant share in the market in 2023, accounting for approximately 38% of the revenue. The region's advanced economies, stringent building codes, and high adoption of energy-efficient technologies drive market growth. Europe follows closely, with a market share of around 30% in 2023. Government initiatives promoting sustainability and energy efficiency, coupled with a large commercial building sector, contribute to the region's growth.
The Asia-Pacific (APAC) region is projected to witness the highest growth rate during the forecast period, owing to rapid urbanization, industrialization, and increasing construction activities. South America and the Middle East and Africa (MEA) regions offer significant growth potential due to rising infrastructure investment and government support for renewable energy sources.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Commercial Water Heaters Market Key Players And Competitive Insights:
Key players in Commercial Water Heaters Market industry are continuously investing in R to bring the most innovative products to the market. Leading shareholders in the Commercial Water Heaters Market market are also focusing on expanding their presence and enhancing their product at the same time. In the forthcoming years, the competitive scenario of Commercial Water Heaters Market is expected to become fiercer with a number of new market players also entering the Commercial Water Heaters Market market. A.O. Smith is one of the leading producers of the product in the market. A.O. Smith offers gas-fired, electric, and solar commercial water heaters. The company has a very strong distribution. Its key commercial sectors include hospitality, healthcare, and education. The sales and marketing professionals of the company have worked enough in the industry to be considered experienced. Rheem is another prominent player in the market and offers similar products as to A. O. Smith.
Key Companies in the Commercial Water Heaters Market Include:
- Bosch Thermotechnolog
- Noritz Corporation
- Rheem Manufacturing Compan
- Viessmann Manufacturing Company
- Amtrol, In
- Precision Plumbing Products
- HTP
- Rinnai Corporation
- Lochinvar, LLC
- AO Smith Corporation
- Ariston Thermo Group
- Bradford White Corporation
- Takagi Industrial Company
- Whirlpool Corporation
- Crown Boiler Compan
Commercial Water Heaters Market Industry Developments
The commercial water heaters market is projected to reach USD 58.8 billion by 2032, exhibiting a CAGR of 5.67% from 2024 to 2032. Growing demand for energy-efficient and sustainable water heating solutions, coupled with increasing construction activities in commercial sectors, is driving market expansion. Technological advancements, government regulations, and rising awareness about energy conservation are further contributing to market growth. Key industry developments include the introduction of smart water heaters with advanced controls and remote monitoring capabilities, as well as the increasing adoption of renewable energy sources such as solar and geothermal for water heating. The market is expected to witness significant growth in developing regions, particularly in Asia Pacific, due to rapid urbanization and increasing investments in commercial infrastructure.
Commercial Water Heaters Market Segmentation Insights
- Commercial Water Heaters Market Fuel Type Outlook
- Commercial Water Heaters Market Capacity Outlook
- Small (less than 10 gallons)
- Medium (10-50 gallons)
- Large (over 50 gallons)
- Commercial Water Heaters Market End User Outlook
- Hospitality
- Healthcare
- Commercial Buildings
- Industrial
- Commercial Water Heaters Market Installation Type Outlook
- Commercial Water Heaters Market Efficiency Outlook
- Standard
- Energy Efficient
- Ultra-High Efficiency
- Commercial Water Heaters Market Regional Outlook
- North America
- Europe
- South America
- Asia Pacific
- Middle East and Africa
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Report Attribute/Metric
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Details
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Market Size 2022
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33.86(USD Billion)
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Market Size 2023
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35.78(USD Billion)
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Market Size 2032
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58.8(USD Billion)
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Compound Annual Growth Rate (CAGR)
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5.67% (2024 - 2032)
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Report Coverage
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Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
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Base Year
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2023
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Market Forecast Period
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2024 - 2032
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Historical Data
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2019 - 2023
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Market Forecast Units
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USD Billion
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Key Companies Profiled
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Bosch Thermotechnolog ,Noritz Corporation ,Rheem Manufacturing Compan ,Viessmann Manufacturing Company ,Amtrol, In ,Precision Plumbing Products ,HTP ,Rinnai Corporation ,Lochinvar, LLC ,AO Smith Corporation ,Ariston Thermo Group ,Bradford White Corporation ,Takagi Industrial Company ,Whirlpool Corporation ,Crown Boiler Compan
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Segments Covered
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Fuel Type ,Capacity ,End User ,Installation Type ,Efficiency ,Regional
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Key Market Opportunities
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Energy efficiency sustainability water conservation smart technology government regulations
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Key Market Dynamics
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Increasing environmental awareness Government regulations Technological advancements Rising energy costs Growing demand for energyefficient solutions
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Countries Covered
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North America, Europe, APAC, South America, MEA
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Frequently Asked Questions (FAQ) :
The commercial water heaters market size was valued at USD 35.78 billion in 2023 and is projected to expand at a CAGR of 5.67% to reach USD 58.8 billion by 2032.
North America, Europe, Asia Pacific, South America, and the Middle East and Africa are the key regions in the commercial water heaters market.
The major applications of commercial water heaters include hotels, restaurants, hospitals, schools, and offices.
The key competitors in the commercial water heaters market include A. O. Smith Corporation, Bradford White Corporation, Rheem Manufacturing Company, and AO Smith India Water Products Private Limited.
The key trends in the commercial water heaters market include the increasing adoption of energy-efficient technologies, the growing demand for smart water heaters, and the rising popularity of tankless water heaters.
The challenges faced by the commercial water heaters market include the high cost of installation, the stringent regulations governing water heater safety, and the competition from other water heating technologies.
The future outlook of the commercial water heaters market is positive. The market is expected to grow at a steady pace over the next ten years, driven by the increasing demand for energy-efficient and smart water heaters.
The key factors driving the growth of the commercial water heaters market include the rising demand for energy-efficient technologies, the growing popularity of smart water heaters, and the increasing adoption of tankless water heaters.
The key opportunities in the commercial water heaters market include the development of new energy-efficient technologies, the expansion of the market for smart water heaters, and the growing demand for tankless water heaters.
The key challenges in the commercial water heaters market include the high cost of installation, the stringent regulations governing water heater safety, and the competition from other water heating technologies.
