The tankless water heater market is growing quickly as buyers look for compact, on-demand, and more energy-efficient hot water systems. Grand View Research estimates the global market at $4.02 billion in 2024, rising to $4.34 billion in 2025, and reaching $9.41 billion by 2033.
Using Grand View Research’s 2025 market estimates, tankless water heaters account for about 13.64% of the broader $31.81 billion global water heater market by value. The category is also expanding much faster than the overall market, with a 10.2% CAGR for tankless units versus 4.9% for the total water heater market.
Key tankless water heater market statistics
- The global tankless water heater market was valued at $4.02 billion in 2024.
- The market is expected to reach $4.34 billion in 2025.
- By 2033, the market is forecast to climb to $9.41 billion.
- The projected global CAGR for 2025 to 2033 is 10.2%.
- The broader global water heater market was estimated at $31.81 billion in 2025.
- That means tankless systems represent roughly 13.64% of total water heater market value in 2025.
- Electric tankless units held 69.2% of global tankless revenue in 2024.
- Residential applications accounted for 72.8% of the market in 2024.
- Europe led the global market with a 33.5% share in 2024.
- Asia Pacific generated $1.17 billion in 2024 and is projected to grow at a 10.7% CAGR through 2033.
- The global residential tankless segment generated $2.93 billion in 2024.
- In North America, the U.S. held 78.4% of regional tankless water heater revenue in 2024.
- The U.S. Department of Energy says tankless water heaters can be 24% to 34% more energy efficient than storage-tank models in homes using 41 gallons or less of hot water per day.
- For homes using around 86 gallons per day, DOE says tankless systems can still be 8% to 14% more energy efficient.
- ENERGY STAR-certified gas tankless water heaters must meet a minimum UEF of 0.95.
- Eligible U.S. gas tankless installations can qualify for a federal tax credit worth 30% of project cost, up to $600.
- Rinnai says the U.S. water heater market ships about 10 million units annually.
- According to Rinnai, more than 90% of those U.S. shipments are still storage tank models.
- Rinnai also says tankless units account for only just over 10% of the U.S. market, showing there is still plenty of room for conversion growth.
Global tankless water heater market size
The clearest headline number is the market’s jump from $4.02 billion in 2024 to a projected $9.41 billion by 2033. That scale-up highlights how quickly on-demand water heating is moving from a niche option toward a more mainstream category.
| Label | Bar | Value | ||
|---|---|---|---|---|
| 2024 market size |
|
$4.02B | ||
| 2025 market size |
|
$4.34B | ||
| 2033 forecast |
|
$9.41B |
Max = $9.41B. Widths: 2024 market size 42.72%, 2025 market size 46.12%, 2033 forecast 100.00%.
Tankless water heaters are growing faster than the total water heater market
One of the strongest market signals is relative growth. Tankless systems are projected to grow at 10.2% annually, while the overall water heater market is growing at 4.9%, which means the tankless segment is expanding at about 2.08 times the pace of the broader category.
| Label | Bar | Value | ||
|---|---|---|---|---|
| Tankless water heater CAGR |
|
10.2% | ||
| Total water heater market CAGR |
|
4.9% |
Max = 10.2%. Widths: Tankless water heater CAGR 100.00%, Total water heater market CAGR 48.04%.
Electric tankless models lead the product mix
Electric models held 69.2% of tankless water heater revenue in 2024. That lead reflects easier installation in some use cases, growing electrification trends, and broader consumer interest in lower-emission appliances.
| Label | Bar | Value | ||
|---|---|---|---|---|
| Electric tankless share |
|
69.2% | ||
| Gas tankless share |
|
30.8% |
Max = 69.2%. Widths: Electric tankless share 100.00%, Gas tankless share 44.51%.
Residential demand dominates the market
Residential buyers remain the core customer base for tankless water heaters. The residential segment held 72.8% of global tankless market revenue in 2024 and generated $2.93 billion, showing that household retrofit and replacement demand is still the main volume driver.
| Label | Bar | Value | ||
|---|---|---|---|---|
| Residential share |
|
72.8% | ||
| Commercial and other share |
|
27.2% |
Max = 72.8%. Widths: Residential share 100.00%, Commercial and other share 37.36%.
Europe leads, while Asia Pacific remains a major growth engine
Europe held the largest global share at 33.5% in 2024, but Asia Pacific is already a billion-dollar region with $1.17 billion in revenue and a projected 10.7% CAGR through 2033. That mix suggests the market has both a mature efficiency-driven base in Europe and strong expansion potential across Asia Pacific.
| Label | Bar | Value | ||
|---|---|---|---|---|
| Europe revenue |
|
$1.35B | ||
| Asia Pacific revenue |
|
$1.17B |
Max = $1.35B. Widths: Europe revenue 100.00%, Asia Pacific revenue 87.01%.
Efficiency remains one of the biggest adoption drivers
Performance economics continue to support adoption. The U.S. Department of Energy says tankless water heaters can be 24% to 34% more energy efficient than storage tank models in lower-use homes and 8% to 14% more efficient in heavier-use homes. That efficiency story helps explain why the category keeps outgrowing the wider water heater market.
Standards and incentives still matter
In the U.S., ENERGY STAR-certified gas tankless units must meet a minimum UEF of 0.95. Eligible installations can also qualify for a federal tax credit equal to 30% of project cost, capped at $600. For many households, that combination of efficiency and incentive support improves the replacement case.
U.S. market still has conversion headroom
Rinnai reports that the U.S. water heater market ships about 10 million units annually, with more than 90% still made up of storage tank models. Tankless units account for just over 10% of the market, which suggests the installed base still leaves significant room for long-term conversion growth.
Tankless water heater market outlook
The headline takeaway is simple: tankless water heaters are still a minority format in many markets, but they are growing much faster than the broader category. Electric products lead globally, residential installations dominate demand, Europe currently leads by share, and Asia Pacific remains a major growth region. With energy savings, compact design, and supportive incentives still attracting buyers, the market appears set for a strong expansion cycle through 2033.
Tankless water heater market FAQ
How big is the tankless water heater market?
The global tankless water heater market was estimated at $4.02 billion in 2024 and is expected to reach $4.34 billion in 2025.
How fast is the tankless water heater market growing?
The market is projected to grow at a 10.2% CAGR from 2025 to 2033, reaching $9.41 billion by the end of the forecast period.
Which product type leads the tankless water heater market?
Electric tankless water heaters held the largest share in 2024, accounting for 69.2% of market revenue.
Which application segment dominates the market?
Residential installations lead the market, accounting for 72.8% of global revenue in 2024.
Which region leads the global tankless water heater market?
Europe held the largest share in 2024 at 33.5%, while Asia Pacific generated $1.17 billion in revenue and is projected to grow at 10.7% annually through 2033.
They offer compact installation, on-demand hot water, and DOE-cited energy efficiency gains of 24% to 34% in lower-use homes and 8% to 14% in higher-use homes.
Sources
- Grand View Research, Tankless Water Heater Market Size | Industry Report, 2033 — https://www.grandviewresearch.com/industry-analysis/tankless-water-heater-market
- Grand View Research, Water Heater Market Size & Share | Industry Report, 2033 — https://www.grandviewresearch.com/industry-analysis/water-heaters-market
- Grand View Research, Asia Pacific Tankless Water Heater Market Size & Outlook, 2033 — https://www.grandviewresearch.com/horizon/outlook/tankless-water-heater-market/asia-pacific
- Grand View Research, Residential – Tankless Water Heater Market Statistics — https://www.grandviewresearch.com/horizon/statistics/tankless-water-heater-market/application/residential/global
- U.S. Department of Energy, Tankless or Demand-Type Water Heaters — https://www.energy.gov/energysaver/tankless-or-demand-type-water-heaters
- ENERGY STAR, Water Heater Key Product Criteria — https://www.energystar.gov/products/water_heaters/residential_water_heaters_key_product_criteria
- ENERGY STAR, Water Heaters (Natural Gas) Tax Credit — https://www.energystar.gov/about/federal-tax-credits/water-heaters-natural-gas-oil-propane-tax-credit
- Rinnai Integrated Report 2024 — https://www.rinnai.co.jp/en/corp/csr/backnumber/pdf/report2024.pdf
