The North America Tankless Smart Water Heater Market size was USD 20.4 Mn in 2022 and is expected to reach USD 144.1 Mn in 2031, expanding at a CAGR of 24.2 % during 2023-2031. The market growth is attributed to the increasing preference for smart and advanced water heaters as these offer various services and applications.
A smart water heater uses water temperature measurements and pairs them with consumption data and preset options. A tankless smart water heater is a heating appliance that heats water using electricity or gas as an energy source. It is different from a traditional water heater, as it does not store and heat water while it flows through the heating unit for a short period of time. These heaters are also known as instantaneous water heaters or demand-type heaters and provide hot water only as it is needed.
A tankless water heater boils water instantly without using a hot water storage tank and aids in cost-cutting due to the lack of standby energy losses associated with hot water tanks. When the hot water faucet is turned on, the cold water starts flowing through a heat exchanger in the unit, where either an electric element or a natural gas burner heats the water which provides instant water heaters that supply hot water. Eliminating the waiting period for the tank to be filled with enough hot water. However, the capacity of the water heater limits the flow rate.
North America Tankless Smart Water Heater Market Dynamics
What drives North America Tankless Smart Water Heater Market
- Replacement of Traditional Water Heaters
Increasing the replacement of conventional water heaters with tankless smart water heaters can drive the tankless smart water heater market. Tankless smart water heaters are more energy efficient than conventional water heaters which are becoming more common in emerging markets. A tankless smart water heater provides continuous hot water when needed that aids in eliminating energy wastage and environmental impact and cutting down greenhouse emissions by over 40%.
- Smart Features and Connectivity
The tankless smart water heater comes with attributes such as advanced heating capabilities, energy optimization, low standby loss, remote management, and Wi-Fi connectivity which are the key factors driving the market. In addition, smart technology offers various benefits. If something goes wrong with the water heater, the system will alert the app and a consumer will get alerts on the app such as warnings about leaks or system failures. New developments in smart features and technology aid in boosting the further market growth.
- Increasing Adoption in Residential and Commercial Sectors
A rapid increase in the installation of instantaneous water heaters in the residential and commercial sectors as a result of specially designed heating for restaurants, hotels, schools, and hospitals is increasing the demand for tankless smart water heaters. Manufacturers are not only focusing on creative product development, but also on effectively building product sales and distribution networks.
Manufacturers of tankless water heaters are increasing their market presence and product availability online as consumers are increasingly turning to online product research for information relevant to their purchases.
- More Energy Efficient than Traditional Ones
Technological advancement in terms of upgrading smart water heaters by making the heater energy efficient is viewed as an environment-friendly option by consumers and is likely to be affordable in the long run. These water heaters can be installed in closets or exterior walls to provide an endless source of hot water while saving energy by heating or reheating the same tank.
Instantaneous water heaters are widely used in residential and commercial establishments. A tankless smart water heater can be up to 34% more efficient than a traditional water heater. Moreover, tankless water heaters are very durable and can last for years.
What Restraints North America Tankless Smart Water Heater Market?
- High cost of Tankless Smart Water Heater
The high cost of the tankless smart water heater compared to the traditional water heater can hinder market growth over the forecast period. A tankless water heater is heating equipment that heats water by using gas or electricity as its energy source. It is more costly as compared to traditional water due to its smart features and connectivity. The upfront and installation cost of tankless smart water heaters and tankless smart water heaters can cost twice as much as conventional storage tanks which impede the market in the coming years.
The unavailability of suitable equipment and other factors such as fluctuating supply of natural gas is expected to limit the growth of the instantaneous water heater market. The smaller units which can only supply one faucet at a time cannot create enough hot water for the entire home. There are larger units that provide adequate hot water for houses but they are more expensive which can reduce the consumer adopting smart water heaters.
This factor is hindering the market growth of the tankless water heater. Moreover, the large unit also utilizes high-powered burners and requires special venting which can impede the market in the coming years.
What are the Opportunities for North America Tankless Smart Water Heater Market?
- Innovative Technological Developments
The development of convenient and interoperable services and products is driving the sales of tankless smart water heaters. In addition, consumer convenience, and increased adoption are seen in this sector. Moreover, the tankless smart water heater market is growing significantly as more and more commercial spaces such as hospitals, hotels, restaurants, beauty salons, and spas replace traditional water heaters with tankless water heating technology.
Manufacturers are also introducing technologically advanced tankless water heaters which can create new opportunities for the North America tankless smart water heater market.
Major manufacturers of tankless smart water heaters are increasing their Research & Development expenditure to produce tankless smart water heaters. Increasing Research & Development efforts through partnerships or collaborations helps businesses introduce cutting-edge products to the market.
Research & Development operations have to lead to competitive price offerings, improvements in end-user performance satisfaction, and the usage of cutting-edge technologies. Increasing demand for innovations in tankless smart water heaters such as flexibility and assembly time are expected to create new pathways for the market during the forecast period.
Scope of North America Tankless Smart Water Heater Market Report
The report on the North America Tankless Smart Water Heater Market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Tankless Smart Water Heater Market – North America Industry Analysis, Size, Share, Growth, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Type (Condensing, Non-Condensing), Application (Wi-Fi and Bluetooth), Price (Low, Medium, High), and End-user (Residential, Commercial)
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Country
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US, Canada
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Report Coverage
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Company Share, Tankless Smart Water Heater Market Size and Analysis, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered
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Rheem Manufacturing Company, Rinnai America Corporation, Bosch Thermotechnology Corp, EcoSmart Green Energy Products, Inc, Heatworks Technologies, Ariston Thermo USA LLC, Noritz America, and Navien
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North America Tankless Smart Water Heater Market Segment Insights
What Key Factors Contribute to the Significant Expansion of the Type Segment?
Based on type, the North America tankless smart water heater market is segmented into condensing and non-condensing. The condensing segment is projected to hold a major market share during the forecast period. This is attributed to the rising demand for condensing tankless smart water heaters for various applications in hotels and buildings. Condensing tankless smart water heaters are popular in emerging nations as they are more energy efficient than non-condensing tankless smart water heaters.
Non-condensing tankless smart water heater segment is anticipated to register a considerable CAGR in the coming years. Non-condensing tankless units only heat water when you want it, unlike wasteful tank water heaters. In simple terms, cold water travels through one heat exchanger supplying endless hot water to the fixtures in your home.
Which Major Factors influence the Substantial Growth of the Connectivity Segment?
Based on connectivity type, the North America tankless smart water heater market is segmented into Wi-Fi and Bluetooth. The Wi-Fi segment is projected to expand at a significant CAGR during the forecast period. Bluetooth limits the number of devices that can be connected at a time, whereas Wi-Fi is open to many devices and a large number of users. Wi-Fi tankless smart water heaters offer more security than Bluetooth tankless smart water heaters. Wi-Fi has a maximum speed that is faster than Bluetooth. Hence, the Wi-Fi segment is expected to gain a significant market share in the forecast period.
The Bluetooth segment is anticipated to register a considerable CAGR in the coming years due to the increasing usage of Bluetooth-connected smart water heaters as the integrated Bluetooth function allows the unit to be controlled by remote or Alexa or tablet. This option offers easy access to water heaters to customers for a better experience.
Why is the Electric Segment More Prevalent than the Gas Segment?
Based on the energy source, the market is bifurcated into electric and gas. The electric segment dominated the market in 2022 and is expected to hold a major share of the market as these types of heaters are easy to set up and require fewer installation costs.
The rapid growth in consumers adopting electric tankless heaters is likely to drive the segment as these heaters have low operating costs and usually last long. These heaters can be installed in small spaces also as they come with an innovative design that makes them feasible and as compared to the gas ones, these do not require any ventilation.
The gas segment is likely to register a considerable CAGR during the forecast period. Unlike electric ones, gas tankless water heaters do not require the same upgrade to a home's basic services for regular use of this ones. Moreover, gas ones have higher flow rates than electric ones.
What is the Expected Growth Rate of the Price Segment?
Based on price, the North America tankless smart water heater market is categorized as low, medium, and high. The medium segment is projected to expand at a significant CAGR during the forecast period, due to its affordable price. Consumers prefer medium-priced tankless smart water heater as it has multiple technological advancements supported with reasonable prices.
The high segment is expected to gain a substantial market share in the forecast period, due to its build quality and additional features. A high-priced tankless smart water heater comes up with the most technological advancements resulting in the highest price compared to low and medium segments.
What are the Main Aspects for Boosting the End Segment?
Based on end-user, the North America tankless smart water heater market is categorized as residential and commercial. The residential segment is projected to hold a major share of the market during the forecast period. The increasing number of residential units as a result of a growing middle-class population is projected to drive the residential segment.
The commercial segment is anticipated to expand at a significant CAGR due to the increasing demand for energy-efficient tankless water heaters in the commercial sector is attributed to the growing awareness of high energy usage and global warming. The rapid growth in the tourism sector, which in turn increases the construction of buildings, hotels, and restaurants is anticipated to fuel the growth of the market during the forecast period.
Why is the US dominating North America Tankless Smart Water Heater Market?
Based on the country, the North America tankless smart water heater market is categorized as the US and Canada. The market in the US is projected to expand at a significant CAGR during the forecast period, owing to the significant applications of tankless smart water heaters in the commercial sector in the country.
Every year, more than 9 million water heaters are sold in the US, indicating high demand for water heaters in the country. The increase in investment in low-carbon electricity generation and a surge in demand for the replacement of existing conventional water leads to fueling the growth of tankless water heaters in this region.
Key Benefits for Industry Participants & Stakeholders
- In-depth Analysis of the North America Tankless Smart Water Heater Market
- Historical, Current, and Projected Market Size in terms of Value and Volume
- Potential & Niche Segments and Regions Exhibiting Promising Growth Covered
- Industry Drivers, Restraints, and Opportunities Covered in the Study
- Recent Industry Trends and Developments
- Competitive Landscape & Strategies of Key Players
- Neutral Perspective on North America Tankless Smart Water Heater Market Performance
Segments
Type
- Condensing
- non-condensing
Connectivity Type
Price
End-user
Key Players
Competitive Landscape
Key players operating in the market are Rheem Manufacturing Company, Rinnai America Corporation, Bosch Thermotechnology Corp, EcoSmart Green Energy Products, Inc, Heatworks Technologies, Ariston Thermo USA LLC, Noritz America, and Navien. These companies are considered as key manufacturers of Tankless Smart Water Heater cords based on their revenue, research development (R&D) activities, Gauge Type offerings, regional presence, and supply chain management system.
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