Tankless Water Heaters Market in India, Forecast to FY2023

The tankless water heaters market is in a nascent stage in the country. However, it has the potential to replace storage water heaters in the long term. Increasing awareness levels of the product and the need for energy savings will drive the market. The market is dominated by storage electric water heaters. There is strong growth of solar water heaters, and instant water heaters also have found adoption. Tankless water heaters are often confused with instant water heaters, and increasing awareness campaigns by suppliers will increase penetration in the long term.

India has a fast urbanization rate and the urban population is expected to reach almost 60 crore by 2031. The growing urban population will look for efficiency, convenience, and the aesthetic appeal of the environment they live in. Tankless water heaters provide an option of concealed heaters, saving space and retaining the appeal of the environment at home. Convenience and efficiency of the product will drive demand.

Government policies have placed emphasis on energy-efficient systems. The BEE ratings have helped organized participants in the market overcome the challenge of the non-branded products. Tankless water heaters are offered a rating of 3 stars or more and have better longevity, creating an appealing prospect.

A key advantage of tankless water heaters is that they do not produce the standby energy losses associated with storage water heaters, thus saving energy. This is a big plus considering the high energy costs. The government's focus on saving energy and promoting equipment that help do so will assist growth. The residential sector is the largest revenue contributor for tankless water heaters. Revival of the real estate market (which is expected to reach INR 12.2 lakh crore by 2020 from an estimated INR 10.5 lakh crore in 2018) provides a positive base for growth. Demand will arise from commercial end users and high-value installations will boost the growth of the market.

Tankless water heater sales is restricted to the western part of the country, especially Mumbai. Tankless water heaters require high wattages and the wiring requirement and load capacity offered by the Electricity Board in Mumbai is compatible for the usage of tankless water heaters, driving adoption. The trend in Mumbai has been quick adoption of heaters that take up less space. Instant water heaters found high penetration in the region initially and the pattern is similar for tankless water heaters. This demand is likely to see adoption in neighboring cities such as Pune.

Author: Manu Tiwari