Solar Water Heaters Market Size, Share & Trends Analysis Report, By Technology (ETC, FPC, UWC), By Application (Residential, Commercial, Industrial), By System, By Region, And Segment Forecasts, 2018 - 2025

Industry Insights

The solar water heaters market size was valued at USD 2.05 billion in 2016 and is predicted to exhibit a CAGR of 8.1% by 2025. This can be attributed to increasing energy prices, growing global population, and rising demand for energy-efficient water heaters. Strict government regulations to curb greenhouse gas emissions, along with growing demand for water heating systems - especially in colder regions, are predicted to augment the adoption of these systems and boost industry growth.

Demand for efficient water heaters is expected to witness rapid growth every year, along with increasing measures to control energy consumption owing to the fast depletion of non-renewable resources. This is expected to augment market growth over the forecast period. These systems are reasonably priced to cater to a wider spectrum of consumers based on their economic condition. Increasing ecological awareness in developed as well as developing regions is also expected to result in industry growth.

Growing demand for eco-friendly, dependable, and affordable technologies to heat water, especially in residential and industrial sectors, is anticipated to drive industry growth. The system’s capability to function at lower costs, 30% to 40% lower in winters and up to 75% lower in summer, is expected to spur their adoption over other products currently available in the market.

The Environment Protection Agency (EPA) has introduced regulatory standards to effectively assess the quality of solar water heaters manufactured. It also aims to implement several technical and financial plans to protect consumers against substandard products that can be potentially dangerous to use. These trends have augmented industry growth in the U.S. over the past decade and are expected to continue over the forecast period.

The introduction of stringent regulations, coupled with government incentives such as tax rebates, tax credit, and financial subsidies, will boost the adoption of these systems. The U.S. federal government has introduced a corporate tax credit system for the effective adoption of solar products, including space heat, thermal electric, water heater, photovoltaic, and thermal process heat. The credit limit has been ascertained at 30% of the production cost and the program validity is up till 2022. Technological advancements in the design of thermal energy collectors to boost efficiency and curb costs will further augment industry growth.

Solar Water Heater Market Trends

The global energy crisis has positively influenced the development of numerous household appliances functioning on renewable energy. This move has encouraged the dependency on alternative energy sources, along with various sustainable construction initiatives. Sustainability in building construction sector is a vast field and involves various steps that must be implemented from the initial stages of construction.

Active solar water heating system, particularly with a source of electricity, makes a sizeable contribution to the existing carbon footprint. It consumes electricity to pump fluid through panels, thereby making it ‘low carbon solar heaters’.

Replacement of existing solar water heaters is a key sub-segment of the market, and accounts for major share of the revenue earned. The average life span of solar water heaters ranges between 15 to 20 years. Solar energy systems need to be inspected and maintained regularly to keep them at optimum operating efficiency. Additionally, spare parts of these systems may need replacement or repair from time to time. Scaling, freezing, and corrosion are commonly occurring effects owing to genuine wear and tear of the systems.

Solar energy is among the cleanest sources of energy available in the market, every step in the life cycle of solar water heaters interacts with the environment, including manufacturing, materials, use, transportation, and final disposal or recycling. Such interactions may lead to exhaustion of natural sources, eutrophication, acidification, greenhouse effect among others. These inferences are based on the environmental impacts associated with GHG emissions of a solar water heater system during its operation phase. Large scale adoption of solar water heaters over the forecast period is expected to substantially reduce the use of fossil fuels, and electricity, reducing the greenhouse gas emissions.

Lack of consumer awareness towards renewable energy, especially solar power systems, stems from the lack of promotion to encourage and spread its environmental and financial benefits. Consumers have inadequate information regarding solar power technology systems, as these technologies are relatively new. For instance, a section of customers may consider renewable energy technologies to be unreliable because of the limited hours of sunlight. It is likely that they may be unaware that the intermittent technologies when combined with other options, such as hybrid PV/thermal, are as reliable as conventional technologies. Also, public & private electricity providers may be unaware of the benefits offered by the solar power technology systems. Therefore, lack of consumer awareness in understanding the benefits of adopting solar power is a crucial market restraint.

Technology Insights

Modest storage requirement, coupled with low maintenance requirements and high energy conversion potential, is expected to drive demand for evacuated tube collectors (ETC). In 2016, the segment was valued at USD 886.9 million and these systems are preferred for industrial and commercial applications across frigid regions.

In terms of volume, flat plate collector (FPC) is expected to reach 863.6 thousand units by 2025. The simplistic design coupled with affordable price and convenience in installation and usage is among the important attributes like to boost the adoption of these products. FPC units are highly preferred in smaller commercial and residential sectors.

System Insights

Thermosyphon systems were valued at USD 1.22 billion in 2016 and the segment is predicted to expand at a CAGR of 7.8% over the forecast period. It accounts for the largest share in the solar water heaters market by volume as well as revenue. This is primarily owing to affordable pricing and convenient installation and usage of the product. Thermosyphons are preferred with liquid-based, preferably water-based, solar water heating systems.

Pumped systems have witnessed large-scale adoption in Europe and North America, chiefly due to the effective functioning of these systems, coupled with adaptability to frigid weather conditions in countries. The segment was pegged at 676.9 thousand units in 2016.

Application Insights

By application, the market can be segregated into residential, commercial, and industrial. The residential segment was pegged at 651.0 thousand units in 2016 and is expected to contribute over 1.16 million units by 2025. The recovery of the construction sector in developed economies is expected to bore well for the growth of this segment.

The commercial segment comprises small and large commercial institutions, sports and healthcare facilities, transportation facilities, and educational institutions. In terms of revenue, this segment is expected to exhibit a CAGR of 9.1% through the forecast period. Substantial growth in commercial construction is anticipated to contribute significantly to industry growth.

Regional Insights

The industrial and residential construction sector in Asia Pacific is projected to grow at a very high rate as compared to other regions. Energy-saving solutions are expected to gain high prominence in countries such as China, Japan, Indonesia, and India. Growing manufacturing activities are projected to boost the demand for heat pumps and heat exchangers over the coming years. The growing automotive industry in this region is also expected to propel market growth in this region.

Rapid industrialization and commercialization are anticipated to augment market demand over the coming years. The industrial sector of China is one of the largest heat consumers. Certain manufacturing processes in the chemical industry, iron and steel industry and textile industry require heat to be applied in their manufacturing process. Due to the high requirement of heat in such industries solar water heater are used.

Residential heating is another major heat application. China’s large size and varying climate conditions provide several suitable areas for the use of district heating. Rapid development in heating technologies is projected to drive demand in this region.

Recovering market conditions in Latin America are expected to boost the industrial production, which is expected to drive the demand for solar water heating equipment in this region. The increasing energy requirement in countries such as Argentina and Brazil are projected to boost the demand for water heating equipment in the industrial sector. Brazil and Argentina derive much of their energy supply from thermal plants, which is expected to drive the demand for solar water heaters.

Solar Water Heaters Market Share Insights

Several solar water heater manufacturers are training their focus on developing new technologies and systems that can function with more efficiency and can be made available even to remote areas. Multinational companies with global presence control a substantial part of the market and are concentrated in Europe and North America. Top global manufacturers account for over 60.0% of the global revenue, with China and the U.S. holding significant production and export volumes. Pricing strategies and other market programs and initiatives are swayed by the conglomerates.

Manufacturers closely follow developments in the industry to formulate new strategies to strengthen their market position in terms of volume and revenue. They have been making heavy investments to boost research and development and present pioneering product designs with enhanced features.

Report Scope

Segments Covered in the Report:

This report forecasts revenue growth at global, regional, and country levels, and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global solar water heaters market report on the basis of technology, application, system, and region.

• Technology Outlook (Volume, Thousand Units; Revenue, USD Million, 2014 - 2025)

  • Evacuated Tube Collector

  • Flat Plate Collector

  • Unglazed Water Collector

• Application Outlook (Volume, Thousand Units; Revenue, USD Million, 2014 - 2025)

  • Residential

  • Commercial

  • Industrial

• System Outlook (Volume, Thousand Units; Revenue, USD Million, 2014 - 2025)

  • Thermosyphon

  • Pumped

• Regional Outlook (Volume, Thousand Units; Revenue, USD Million, 2014 - 2025)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • Russia

    • The U.K.

    • Spain

    • Italy

    • France

  • Asia Pacific

    • China

    • Japan

    • South Korea

    • India

    • Australia

  • Central & South America

    • Brazil

    • Paraguay

    • Colombia

  • The Middle East and Africa

    • UAE

    • South Africa

    • Egypt

    • Saudi Arabia