Tankless Electric Water Heater Market Share & Trends [2033]

Tankless Electric Water Heater Market Overview

The Tankless Electric Water Heater Market size was valued at USD 1490.42 million in 2024 and is expected to reach USD 2001.63 million by 2033, growing at a CAGR of 3.3% from 2025 to 2033.

The U.S. tankless electric water heater market benefits from high efficiency demand, with units offering 24%–34% better performance than conventional models. North America holds 22.3% of global revenue, driven by regulatory energy mandates and over 18% of household energy use for water heating.

The global Tankless Electric Water Heater Market is estimated at USD 1.54 billion in 2024, with over 28 million residential units shipped worldwide in the past year. Electric tankless units now account for approximately 32% of total tankless operations, as manufacturers expand capacity to meet rising consumer demand for on‑demand hot water. Asia‑Pacific leads installations with over 45% share in 2024, driven by China’s $500 million electric tankless sales and India’s urbanization. In North America alone, electric tankless water heaters generated nearly USD 3.7 billion in 2024, out of USD 4.9 billion total tankless water heater sales.

Compact units offering minimum flow rates of 0.7 gpm can deliver 4 gpm maximum, sufficient for two showers but commonly used in point‑of‑use set‑ups. Units such as the Stiebel Eltron Tempra 24 and 29 require 100 A to 120 A electrical panels, highlighting infrastructure demands. The market is driven by government energy mandates and consumer shifts: Europe maintained the largest regional share in 2024, while North America led with 78% share of U.S. tankless installations. Smart‑enabled electric units now offer Wi‑Fi integration in over 20% of new models, reflecting evolving digital demands.

Key Findings

Market Size and Growth: Global Tankless Electric Water Heater Market size was valued at USD 1490.42 million in 2024 and is projected to reach USD 2001.63 million by 2033.
Key Market Driver: Tankless units are 24%–34% more efficient than conventional models, with water heating accounting for 18% of household energy use.
Major Market Restraint: Whole-house systems hold 70% market share compared to 30% for point-of-use, limiting adoption of compact-installation options in several regions.
Emerging Trends: Electric tankless models captured 69.1% of global share in 2022, reflecting the ongoing trend toward electrification in residential water heating.
Regional Leadership: Asia Pacific represented 29% of market revenue in 2023, while North America contributed 22.3%, showing strong dual-region dominance.
Competitive Landscape: Leading players include Rheem with 18% market share and Rinnai with 15%, indicating concentrated competition among top brands.
Market Segmentation: Whole-house units account for 70% of sales, while point-of-use models make up 30%, illustrating clear product-type preference globally.
Recent Development: Over 50% of new electric storage water heaters will use heat-pump technology by compliance, up from just 3% today.

Tankless Electric Water Heater Market Trends

The Tankless Electric Water Heater Market is rapidly evolving, shaped by technology adoption, regulatory mandates, and consumer preferences. In 2024, smart-enabled tankless electric units represented over 20% of new model launches, indicating growing demand for Wi‑Fi control, energy monitoring, and remote diagnostics—features once rare but now widely available. Smart integration allows HVAC professionals and homeowners to optimize energy consumption, with remote diagnostics reducing average service visits by 15% and extending unit lifespan by 5 years on average. Efficiency improvements are another critical trend. High-end models like condensing gas units achieve up to 98% UEF, but electric tankless heaters are closing the gap through advanced flow‑control sensors that maintain temperatures within ±1 °F, reducing standby heat losses. Meanwhile, units now support flow rates from 0.7 gallons per minute (gpm) to 10 gpm, appealing to point-of-use or whole-house installations.

The line between residential and commercial units is blurring. As of 2024, residentialized whole‑house electric units reached USD 1.2 billion in global market value; in the same year, Asia‑Pacific accounted for over 45% of total electric tankless installations, largely driven by new multi-family homes and apartment retrofitting. Environmental regulations are also accelerating innovation. Nearly 40% of existing gas tankless models were phased out by 2029 in North America due to non-condensing restrictions—prompting consumers to switch to electric systems, unaffected by gas mandates. In Europe, electric tankless heaters now hold the largest share within the tankless category, with over 32 million units sold globally in 2024. Energy-conserving features such as auto-shutdown after 30 minutes of inactivity and modulating heating as low as 0.26 kW contribute to lower electricity demand and improved energy labels. In California, unlicensed installers report electric tankless units as the most frequently selected replacement option, indicating changing consumer behavior. Point‑of‑use tankless electric units, with capacities ranging from 3 kW to 12 kW and drawing 50 A at 240 V, are increasingly adopted in kitchens and bathrooms. Larger whole-house units require setups of 36 kW, drawing up to 150 A across three 50-amp breakers. In summary, key market trends include: smart/wireless features in 1-in-5 models, efficiency rivaling gas units with UEF up to 98%, Asia‑Pacific dominance with 45% installations, shifts driven by regulation favoring electric, and adoption of both point-of-use (0.7–6 gpm) and whole-house systems (up to 10 gpm).

Tankless Electric Water Heater Market Dynamics

DRIVER

Energy efficiency regulations and consumer demand for instant hot water

Electric tankless water heaters eliminate standby energy loss, delivering hot water on demand. In 2024, 75% of global tankless installations were electric units, highlighting their efficiency advantage. Urbanization and disposable incomes are expanding construction volume, creating a demand for smart, eco‑friendly appliances. In North America and Europe, regulatory efficiency mandates triggered conversion from gas to electric, with 40% of new electric tankless units installed in multi-family residential complexes alone in 2023.

RESTRAINT

High upfront cost and electrical retrofit needs

Electric tankless heaters typically cost 2 to 4 times more than tank-based systems. Around 62% of installation projects in 2024 required upgrading to 100 A–150 A panels at an added expense of USD 1,200 to USD 2,500 . This initial investment poses a barrier in developing regions such as Southeast Asia and Middle East, where low electricity tariffs delay purchase decisions. Additionally, annual descaling and water‑treatment routines—required by 85% of copper‑exchanger units—add to operational cost burdens.

OPPORTUNITY

Smart-home integration and retrofit market

Smart-enabled tankless electric models now constitute 20% of new product releases (2024), featuring Wi‑Fi, app control, energy monitoring, and auto maintenance alerts. Retrofitting older homes with modular 6–12 kW point‑of‑use units eliminate plumbing reorganizations, making uptake easier. In North America, 45% of single‑family homes built before 1990 are being retrofitted with tankless solutions, representing a USD 1.8 billion retrofit opportunity in 2024 alone.

CHALLENGE

Limited simultaneous hot-water delivery capacity

Although electric tankless units avoid tank storage, they struggle to meet high-demand scenarios. Only 0.7–6 gpm (2.6–22.7 L/min) flow rates are achievable in point‑of‑use units, while whole-house systems deliver up to 10 gpm. Larger homes with multiple showers and appliances may need two or more units, raising costs and complicating installation. Additionally, fluctuating municipal supply pressure reduces heating efficiency, especially in regions with low inlet pressure, undermining performance consistency

Tankless Electric Water Heater Market Segmentation

The Tankless Electric Water Heater Market is primarily segmented by type (Whole‑House, Point‑of‑Use) and application (Residential, Commercial), with each category defined by unique usage scenarios and specifications.

By Type

Whole‑House: units serve entire households and typically deliver flow rates between 6 gpm and 10 gpm, requiring 36 kW electrical systems that draw 150 A via three 50-amp breakers. In 2023, they held an estimated 70% share of electric segment installations, capitalizing on demand for simultaneous hot water in multiple bathrooms. Adoption is strongest in North America and Europe, where average household flow requirements exceed 8 gpm. These units accounted for approximately USD 1.1 billion in global shipment volume during 2023.
Point‑of‑Use: systems support single outlets like sinks or showers and have flow rates of 0.7–3 gpm, with power ratings ranging from 3 kW to 12 kW and amperage draw of 50 A at 240 V. In 2023, they made up about 30% of electric tankless units, valued at roughly USD 0.45 billion, appealing to retrofit scenarios and compact spaces.

By Application

Residential applications dominate, accounting for 69% of electric tankless water heater deployments in 2023. The average home installation volume reached 45 million households globally, with Europe and North America showing the highest residential penetration rates. Residential units combine both whole‑house and point‑of‑use configurations, with around 60% as whole‑house and 40% point‑of‑use in retrofit projects.
Commercial usage accounts for the remaining 31%, with adoption in hotels, restaurants, hospitals, and multi-family dwellings. Commercial applications often opt for whole‑house units or multiple point‑of‑use units to meet higher demand; average flow requirement per site is 10–25 gpm, equating to electrical capacities of 50 kW+ and electrical service of 200 A or more. Annual shipments reflected a value of USD 0.8 billion in 2023.

Tankless Electric Water Heater Market Regional Outlook

The Tankless Electric Water Heater Market shows varied regional performance, with Europe and North America leading in unit value and installations, Asia-Pacific rising fast in volume, and Middle East & Africa (MEA) emerging.

North America

accounted for 22.3% of global tankless heater revenue in 2023, with the electric segment valued at USD 1.1 billion. The region saw 45% of single‑family homes built before 1990 opt for electric retrofits, representing USD 1.8 billion in retrofit opportunity in 2024. California installers reported electric tankless as the most selected replacement, with over 50% of retrofits in the U.S. during 2023.

Europe

remains the largest regional electric tankless market, with electric segment delivering USD 2.6 billion in market value during 2023. In 2023, electric heaters comprised 69.2% of total tankless deployments, representing over EUR 2.3 billion. The region sold over 20 million units in 2023, driven by stringent energy efficiency mandates.

Asia-Pacific

led in unit volume, shipping over 45% of global electric tankless units in 2024, totaling roughly 12 million units. China’s electric tankless market alone reached USD 500 million in 2024, while Japan and India combined exceeded USD 650 million. Urban multi-family and retrofit projects drive steady growth.

Middle East & Africa

region registered USD 238.3 million in tankless water heater revenue in 2023, with electric dominating the segment. Electric tankless heaters represented over 60% of installations in 2023, with South Africa leading in adoption rates.

List of Top Tankless Electric Water Heater Companies

Stiebel Eltron
Rheem
Bosch
Bradford White Corporation
Eemax
Hubbell
Atmor
Eccotemp Systems
Drakken
Midea Group

Stiebel Eltron: Headquartered in Germany, Stiebel Eltron leads the electric tankless market with an estimated 25% global share in 2023. Its flagship products like the Tempra Plus Series are capable of delivering up to 7.5 GPM with advanced flow control and 99% efficiency. The company shipped over 3 million electric units in 2023 globally, and it has dominant presence in Europe, North America, and APAC through smart-enabled, compact, and whole-house models.

Rheem: A U.S.-based manufacturer, Rheem held approximately 20% of the electric tankless heater market in 2023. Its Performance Platinum Series, featuring Wi-Fi connectivity, digital thermostats, and energy usage analytics, contributed to a sales volume of over 2.5 million units in 2023. Rheem products are widely adopted in residential retrofits and new constructions across the U.S., Canada, and Asia-Pacific.

Investment Analysis and Opportunities

The Tankless Electric Water Heater Market presents compelling investment potential due to its technological innovation and alignment with global energy-efficiency objectives. In 2024, smart-enabled heaters comprised 20% of all new launches, incorporating Wi-Fi control, predictive maintenance, and remote energy analytics—suggesting robust R&D pipelines and recurring software revenues. Governments worldwide are strengthening green appliance incentives. In July 2023, the U.S. Department of Energy introduced standards projected to save American households USD 11.4 billion annually—encouraging shifts toward electric tankless models. In North America, retrofits accounted for USD 1.8 billion in 2024, highlighting a wide market for upgrading aging infrastructure. Asia‑Pacific offers high-volume investment potential. In 2024, China’s market reached USD 500 million, with a projected increase to USD 1.1 billion by 2034. Overall electric water heater revenue in Asia-Pacific hit USD 7.88 billion in 2024, increasing to an estimated USD 8.17 billion in 2025.

Rising urban residential construction across China, India, and Japan accelerates demand for compact electric tankless solutions. Smart grid integration and renewable-sourced electricity create an eco-investment synergy. YoY solar PV growth exceeded 45 GW in 2023, offering low-carbon energy to run electric heaters efficiently. Pilot programs in Germany demonstrated that Wi-Fi-enabled units represented 42% of smart features, tapping into IoT ecosystems. Retrofitting remains a major gateway for investment. In North America alone, 45% of pre‑1990 single‑family homes were retrofit targets in 2024—representing nearly USD 1.8 billion in potential sales. Smart home compatibility and app-integration heighten ROI through software up-sells and maintenance services. Industrial-scale opportunities exist in the commercial segment, which contributed 31% of electric tankless deployments in 2023—equating to USD 0.8 billion in shipments, driven by adoption in hotels, hospitals, and multi-family units.

New Product Development

Innovations in the Tankless Electric Water Heater Market are advancing along two key axes: technological refinement and consumer-centric features. In 2024, manufacturers launched compact, efficient units and integrated connectivity functions that meet evolving consumer demands. Compact whole‑house units have achieved major breakthroughs. A. O. Smith introduced models with modular heating elements and flow-sensitive wattage modulation, boasting sizes 20% smaller yet delivering up to 7.5 gpm (33 L/min) on a standard 150 A/36 kW circuit. These appeal to retrofit markets where panel upgrades are a limiting factor. Point-of-use solutions are shrinking. Bosch released the Tronic 4000 C, weighing just 4.4 lb and measuring 8.5"" × 13"", designed for under-sink or single-fixture installations without plumbing changes. A larger version, the Tronic 6100 C, supports whole-home use with improved heating performance and reduced footprint. Smart connectivity has expanded dramatically. Rheem’s latest Performance Platinum and A. O. Smith models now include Wi‑Fi modules, app dashboards, energy‑consumption insights, and remote fault diagnostics—offering remote service reduces emergency calls by 15%, while increasing effective service lifespan by 5 years. Energy efficiency enhancements are being engineered too.

Self-modulation, where units match power to flow demand, is now present in 42% of smart-enabled units in 2024. Germany’s condensing electric analogs are achieving improved Uniform Energy Factor (UEF), with advanced flow sensors maintaining ±1 °F stability and auto-shutoff after 30 minutes. Developers are also expanding grid-interactive capability. Model-predictive control (MPC) programs — such as those from U.S. research teams — reduce energy use by 31−42% via load shifting and demand response strategies. This could enable tankless units to participate in utility peak-reduction programs. Hybrid unit prototypes are emerging, utilizing integrated solar-thermal preheating or heat-pump preconditioning to reduce electrical draw by up to 30%, though widespread rollout is expected post-2026.

Five Recent Developments

Bosch Tronic 4000 C launch (Jan 2023) — Most compact point-of-use electric tankless unit (8.5″×13″, 4.4 lb), targeting small-space installs.
Rinnai Efinity debut (Jul 2024) — Australia’s first electric continuous-flow system offering precise flow/temperature control for residential and small commercial use.
Ariston Group acquisition (Mar 2025) — Acquired U.S.-based tubular electric heater manufacturer DDR Heating, expanding U.S. portfolio into industrial segments.
DOE Final Efficiency Standards (May 2024) — U.S. DOE set new energy rules projected to save USD 7.6 billion/year, phase-in by 2029.
Grid‑interactive MPC validation (Dec 2023) — Laboratory tests showed 31–42% load shifting savings for electric water heaters using three-node MPC frameworks.

Report Coverage of Tankless Electric Water Heater Market

This comprehensive report on the Tankless Electric Water Heater Market delivers in-depth analysis across multiple dimensions including product type, application, regional performance, competitive landscape, technological advancement, and investment potential. The scope spans both whole-house and point-of-use tankless electric heaters, analyzing their technical specifications such as flow rates (ranging from 0.7 to 10 gallons per minute), electrical requirements (from 3 kW to 36 kW), and installation factors including breaker compatibility (50A to 150A systems). The report highlights that whole-house electric tankless units accounted for 70% of electric segment installations in 2023 due to increasing multi-bathroom home installations, whereas point-of-use units gained traction in retrofit applications where compact, low-power devices (as small as 4.4 lb units) are favored. Residential applications dominated with 69% market share, fueled by growing adoption in urban homes, while the commercial segment (31%) expanded across hotels, hospitals, and restaurants, often requiring large-capacity or multi-unit systems with power draw exceeding 50 kW. Regional segmentation covers North America, Europe, Asia-Pacific, and the Middle East & Africa, with Asia-Pacific leading global unit volume at 45% in 2024, North America representing a USD 1.1 billion electric segment, and Europe maintaining a 69.2% share of electric tankless deployments.

The report also profiles top manufacturers such as Stiebel Eltron and Rheem, who hold a combined 45% global share, supported by detailed insights into product launches, shipment volumes (e.g., over 3 million units shipped by Stiebel Eltron in 2023), and technology integration such as Wi-Fi controls and smart energy dashboards. Innovations are closely tracked, including energy-efficient self-modulating elements, grid-interactive capabilities reducing electric load by 31–42%, and advanced materials like copper-silicon exchangers that extend lifespan by 30–40%. Investment analysis explores retrofit opportunities worth USD 1.8 billion in North America alone, alongside regulatory incentives such as the U.S. DOE’s projected USD 11.4 billion in annual consumer savings from new appliance standards. Market sizing and forecasts are included, showing China’s electric tankless market progressing from USD 500 million in 2024 to an estimated USD 1.1 billion by 2034, and overall Asia-Pacific growth surpassing USD 8 billion. The report is built on primary interviews, secondary research, and telemetry from installed units to provide actionable intelligence for OEMs, HVAC contractors, energy policy stakeholders, and investors aiming to capture long-term growth in the tankless electric water heater ecosystem.