In today’s fast-evolving world of home appliances, tankless water heaters are gaining unmatched popularity due to their energy efficiency, space-saving design, and advanced user features. Unlike traditional water heaters that store hot water all day, tankless models heat water on demand, reducing energy consumption and offering endless hot water supply. Their adoption reflects a growing commitment to sustainable living, smarter homes, and long-term cost savings.

According to Straits Research, tankless water heaters were valued at USD 4.44 billion in 2024 and are expected to grow from USD 4.77 billion in 2025 to reach USD 8.48 billion by 2033, with a compound annual growth rate (CAGR) of 7.45% during 2025 to 2033. This solid rise is driven by rising energy costs, growing environmental awareness, and technological innovations that are making these systems smarter, more efficient, and easier to integrate into modern homes.

Recent Technological Advances and Updates

The year 2025 marks notable advancements for tankless water heaters:

• Smart Home Integration: Many new tankless models feature built-in Wi-Fi connectivity, allowing homeowners to control temperature settings remotely through smartphones or voice assistants like Alexa and Google Home. This convenience leads to improved energy management and personalized comfort.

• Energy Efficiency Improvements: Next-generation tankless water heaters use advanced heat exchangers and smart sensors to minimize energy waste. Some brands offer scale-resistant technology that prevents mineral buildup, extending unit life and reducing maintenance.

• Space-Saving Designs: Compact, wall-mounted units now dominate, freeing up valuable storage space in basements, garages, and utility closets—an important factor as minimalist and open-concept home designs rise in popularity.

• Hybrid Models and Renewable Integration: Companies are combining tankless technology with heat pump features or solar water heating systems to further boost efficiency and reduce environmental impact, responding to increasing regulatory standards and consumer demand for greener homes.

Key Players and Global Landscape

The tankless water heater landscape is shaped by a mix of established global brands and innovative newcomers:

• Bosch Thermotechnology (Germany): Bosch leads with compact electric tankless models like the Tronic 4000 C and 6100 C, which provide efficient point-of-use and whole-house solutions, known for their lightweight design and minimal maintenance requirements.

• Eccotemp (USA): Eccotemp is recognized for integrating smart technology with energy-efficient systems, actively promoting sustainable living with voice-enabled controls and easy-to-maintain designs.

• Rinnai (Japan): A pioneer in gas-powered tankless systems, Rinnai continues to innovate with enhanced safety features, digital controls, and models suited for both residential and commercial applications.

• Noritz (Japan): Specializing in high-performance gas units, Noritz excels in delivering rapid hot water on demand while reducing standby heat loss, targeting both new builds and retrofit markets.

• Rheem (USA): Rheem offers both electric and gas tankless water heaters with advanced diagnostics and energy-saving modes, focusing on seamless home integration and reliability.

• A.O. Smith (USA/China): A.O. Smith blends manufacturing strength across continents with innovations like Wi-Fi enabled tankless systems and eco-friendly performance credentials.

Region-wise, North America and Europe lead adoption driven by stringent energy regulations and consumer awareness. Asia-Pacific, particularly Japan, China, and South Korea, invests heavily in expanding smart and gas-powered tankless systems, while emerging markets are beginning to catch on as infrastructure develops and affordability improves.

Trends Shaping the Tankless Water Heater Industry

Several key trends define this sector’s evolution:

• Increasing Smart Connectivity: The trend of integrating IoT with water heaters is growing, enabling remote control, maintenance alerts, and energy usage insights via apps.

• Sustainability and Energy Codes: Governments globally are imposing stricter energy efficiency codes encouraging the shift from conventional tanks to tankless units with lower carbon footprints.

• Consumer Focus on Space Optimization: As urban living spaces shrink or are redesigned, compact and easily installed tankless systems are preferred for their minimal spatial footprint.

• Hybrid and Renewable Synergies: Combining tankless water heaters with solar thermal systems and heat pumps is becoming more popular for consumers wanting low-energy and green alternatives.

• Maintenance and Longevity Enhancements: Innovative materials and self-cleaning scale-resistant technologies are reducing upkeep and increasing lifespan, addressing long-term operational costs.

Recent News Highlights

• Bosch’s launch of the Tronic 4000 C in early 2025 received accolades for its ultra-compact size and energy efficiency, ideal for under-sink and point-of-use applications.

• Eccotemp’s latest 2025 smart product line features Alexa and Google Home compatibility along with advanced energy-saving modes, highlighting the push toward fully integrated smart homes.

• Rinnai introduced new gas tankless units with enhanced heat exchangers and safety protocols, suited for colder climates, expanding their market footprint in North America and Europe.

• The growing adoption of ENERGY STAR certifications for tankless water heaters in the USA and Europe is influencing buyers’ preferences, incentivized by rebates and tax credits.

• Asia-Pacific countries, especially China and Japan, continue R&D in digital diagnostics and hybrid models, aiming to balance efficiency with affordability in dense urban settings.

Conclusion

Tankless water heaters are at the forefront of modern home comfort and energy efficiency, offering sustainable, space-saving solutions that align with the smart home revolution and evolving environmental standards. With continuous technological innovation and growing global demand, leading companies worldwide are transforming how water heating integrates into daily life. The ongoing shift toward smarter, greener homes indicates that tankless water heaters will remain a pivotal appliance choice in the coming decade.

Article Summary
Tankless water heaters provide on-demand hot water with superior energy efficiency, space-saving benefits, and smart home compatibility. Global leaders are innovating with compact, tech-enabled designs and sustainable integrations, fueling steady growth worldwide. The future houses a strong emphasis on intelligent, green, and convenient water heating solutions.