North America Tankless Water Heater Market Size, Share & Industry Analysis Report By Product (Electric, and Gas), By Application (Residential, and Commercial), By Country and Growth Forecast, 2025 - 2032

The North America Tankless Water Heater Market would witness market growth of 9.4% CAGR during the forecast period (2025-2032).

The US market dominated the North America Tankless Water Heater Market by Country in 2024, and would continue to be a dominant market till 2032; thereby, achieving a market value of $1,323 million by 2032. The Canada market is experiencing a CAGR of 10.8% during (2025 - 2032). Additionally, The Mexico market would exhibit a CAGR of 10.5% during (2025 - 2032). The US and Canada led the North America Tankless Water Heater Market by Country with a market share of 67.2% and 19% in 2024.

The North American tankless water heater market has gone from being a niche technology to a common choice. This is because energy efficiency standards are getting stricter, space is limited, and more people are becoming aware of the benefits. On-demand units that heat water only when needed are replacing traditional storage-tank systems. These units waste less energy and are easier to install because they are smaller. The U.S. Department of Energy's rules and state-level incentives have sped up this change, making tankless systems more cost-competitive over their entire life cycle. A. O. Smith, Rinnai, and Rheem are some of the biggest OEMs that have added more manufacturing space and new products to their lines, including advanced, connected, and condensing models. Demand has also grown because more people are moving to cities, housing units are getting smaller, and people are worried about the environment.

To stay ahead of the competition in North America, top manufacturers are putting money into new ideas, automation, and making things in different parts of the world. For example, A. O. Smith's new factory in Ciudad Juárez shows how serious the company is about increasing production and lowering costs for tankless units. Companies are also working to get into more markets by forming partnerships with big retailers and installer networks to expand their channels. Widespread adoption has been helped by better education for consumers and more access through wholesale and retail channels. Competitive dynamics are still fairly concentrated, which is good for established brands that have strong distribution networks, are in line with regulations, and have scale advantages. Even though there are problems like higher upfront costs, the segment is still growing faster than traditional systems. This shows that both residential and commercial markets are moving toward more sustainable and efficient water-heating solutions in the long term.

Product Outlook

Based on Product, the market is segmented into Electric, and Gas. The Electric market segment dominated the Canada Tankless Water Heater Market by Product is expected to grow at a CAGR of 10.1 % during the forecast period thereby continuing its dominance until 2032. Also, The Gas market is anticipated to grow as a CAGR of 12.3 % during the forecast period during (2025 - 2032).

Application Outlook

Based on Application, the market is segmented into Residential, and Commercial. With a compound annual growth rate (CAGR) of 8.3% over the projection period, the Residential Market, dominate the US Tankless Water Heater Market by Application in 2024 and would be a prominent market until 2032. The Commercial market is expected to witness a CAGR of 9.2% during (2025 - 2032).

Country Outlook

The North American tankless water heater market has evolved from a niche product to a mainstream solution, driven by rising energy-efficiency regulations, compact housing trends, and growing consumer awareness. Unlike traditional storage-tank systems, tankless units offer on-demand heating, reduced energy waste, and space-saving benefits. Regulatory support from the U.S. Department of Energy, coupled with state-level incentives, has further accelerated adoption. Leading manufacturers such as A. O. Smith, Rinnai, and Rheem are expanding production, integrating smart-home connectivity, and enhancing efficiency through innovation. Increasing urbanization and the shift toward sustainable, connected living have strengthened demand in both residential and commercial sectors. With improved installer training, broader retail access, and regulatory alignment, tankless systems are becoming a standard water-heating choice in North America, reflecting a lasting move toward efficient and environmentally conscious technologies.

List of Key Companies Profiled

• Rheem Manufacturing Company
• Bradford White Corporation
• Robert Bosch GmbH
• Rinnai Corporation
• EcoSmart Green Energy Products, Inc.
• Stiebel Eltron GmbH & Co. KG
• Noritz Corporation
• Kyungdong Navien Co., Ltd.
• Takagi Seiko Co., Ltd.
• A. O. Smith Corporation

North America Tankless Water Heater Market Report Segmentation

By Product

• Electric
• Gas

By Application

• Residential
• Commercial

By Country

• US
• Canada
• Mexico
• Rest of North America

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