In the ever-evolving landscape of home heating solutions, tankless water heaters have emerged as a beacon of innovation and efficiency, capturing the attention of homeowners and industry professionals alike. Unlike their tank-based relatives, these sleek, compact units offer a continuous supply of hot water on demand, directly heating water as it flows through the device rather than storing it pre-heated. 

This shift translates to a reduction in energy consumption and lower utility bills, and addresses the growing consumer demand for eco-friendly and space-saving technologies in residential and commercial settings. As we delve deeper into the latest trends and technological advancements within the realm of tankless water heaters, it becomes evident why they have become a hot topic in the market.

Recent trends in the tankless water heater industry highlight a significant move toward smart home integration and eco-conscious innovation. Manufacturers increasingly focus on producing units that can be seamlessly integrated with home automation systems, allowing users to monitor and adjust settings for optimal performance and energy savings via their smartphones or other devices. 

Additionally, the push for greener, more sustainable solutions has led to the development of models that boast higher efficiency ratings, reduced carbon footprints and compatibility with alternative energy sources such as solar power. As we spotlight these advancements, it’s clear that tankless water heaters are not a fleeting trend but a pivotal shift toward more sustainable living and modern home convenience.

We asked manufacturers in the market what they see trending in the market and how their companies are preparing for future developments. From our survey responses, here is what is taking place on the horizon for A. O. Smith, Bradford White, Bradley (for Keltech), Chronomite Laboratories, Eemax, GE Appliances, Intellihot, Navien, Rheem, Rinnai, SioGreen and Stiebel Eltron. 

Isaac Wilson Senior Tankless Product Manager, A. O. Smith

We know that consumers are still very excited by the technological appeal of a tankless water heater. There has been consistent growth of the segment for quite a while as the technology is adopted more broadly. With the underlying push for higher efficiencies has come a steady shift toward condensing products with premium features. To prepare for future regulations and decarbonization trends, A. O. Smith is focusing on developing high-efficiency condensing products that include value-added technology for the entire customer value chain.

Dongtaek Lee Senior Product Manager/Specialty Products, Bradford White Corp.

The largest trend we see is high-efficiency, condensing gas tankless water heaters with integrated recirculation. Demand for water conservation and fast hot water delivery continues and as a result, more manufacturers are introducing these types of units into the gas tankless market. Another trend is the ongoing efforts to enhance product designs and features, creating a more user-friendly experience as it relates to installation and maintenance, inventory control, and more. 

The increase in decarbonization policies is also increasing homeowners’ interest in electric tankless products, which will likely lead to growth in the residential electric tankless market into the foreseeable future. As awareness and demand for tankless products increase, Bradford White will continue to meet the evolving needs of our professional contractors who install these products. We provide year-round in-person training, e-learning courses and a 24/7 technical support line to help professionals with troubleshooting. 

Tony Clouse Industrial Business Development Manager, Bradley Co. 

Key trends center on technology upgrades that improve heater performance and efficiency. Specifiers and plumbing engineers feel greater pressure to cut energy consumption and costs while improving performance in their operations, so technology must keep up with those market demands.

Specifically, Bradley’s tankless water heaters use energy only when the safety units are activated, resulting in significant cost savings over traditional water heaters. Its models — including CLE and SNA models — feature the lowest pressure drops in the industry, providing the greatest reliability and performance available. Designed for long-lasting performance, all Bradley models are precision-engineered with durable materials, such as copper tubing and robust brass castings, exceeding the standards of any application.

In addition to efficiency, performance and cost savings, Bradley’s tankless water heaters have a smaller footprint than large commercial tank water heaters. One unit has the capacity to efficiently feed multiple safety showers at once. 

Edward Fabrizio, PE Vice President, General Manager, Chronomite Laboratories

We see the overall demand for instantaneous water heating increasing to conserve water and energy. The next step for eco-friendly consumers is renewable energy sources — electric. Chronomite offers a wide range of electric instantaneous water heaters ranging from 1.4 to 154 kW to accommodate all point-of-use applications. We anticipate a 15 percent increase annually for electric heating and are taking the necessary steps now to be prepared for the future.

Stefania Parravicini Commercial Director, GE Appliances 

Consumers are choosing tankless water heaters in new home builds and replacement scenarios. Continuous hot water on demand and energy efficiency packaged in a smaller footprint have bolstered market share, which we will see continue to grow. Our product innovations, such as scale reduction technology and self-modulating temperature sensors, ensure the longevity of our products. 

Amy Turner Director of Marketing, Intellihot

Intellihot foresaw the growing electrification demand as fossil-fuel bans were being mandated in areas, resulting in exponential growth of heat pump applications. Because of this trend, we began developing technology that led to the introduction of the Electron series of tankless heat pump water heaters. While heat pump water heaters are not new, tankless commercial heat pump water heaters are. 

Our Electron products combine the energy efficiency of heat pump technology with the water safety and on-demand performance of tankless water heaters. They use a carbon dioxide-based refrigerant paired with a specially designed thermal battery that stores heat energy and enables on-demand water heating without the need to store large quantities of potable water. They also connect to the electric grid to maximize off-peak electric usage, while offering 24/7 factory monitoring. Multiple units can be wirelessly cascaded via Bluetooth and can be made solar-ready with a quick upgrade.

Chia Lin Product Manager – Water Heaters, Navien 

The demand for tankless water heaters continues to rise as it is fueled by new home builds, construction renovations and replacement of old units. Tankless water heaters offer both space and energy savings when compared to traditional tanks. Current trends in the tankless industry include units with higher efficiency ratings (above 0.95 UEF), field gas convertibility and additional built-in features, where in the past were sold separately as accessories; thus, offering more value to the customer. 

Some of these features now built into tankless water heaters include advanced control panels, built-in recirculation pumps and on-demand domestic hot water controllers. As we have entered the age of artificial intelligence (AI), we can look forward to smarter tankless water heaters soon. Water heaters are already learning how and when hot water is used. Future development will focus on three areas: efficiency, AI/smart home integration and additional value-added built-in features benefitting end-users. 

Scott Cohen Director of Marketing, Rheem Water Heater Division and Eemax 

For Eemax, there is strong consumer interest in electric tankless options because of the small size of the product, comparably low price and the lack of venting required. However, it can be challenging for a retrofit as many older homes do not have enough capacity in their electrical panels to satisfy the electrical draw for whole-home tankless. This may require upgrades to the electrical panel.

Electric tankless offers several options that are great for solving very specific hot water issues, such as small point-of-use tanks to provide hot water quickly where there are long runs from the main water heater. Also, “tank boosters” that attach to an existing electric water heater and can significantly boost output where the tank may be undersized but is otherwise in good working order.

Regulation is the major driver in the Rheem’s gas tankless category right now. These regulations have led the industry to design with new standards in mind and develop more energy-efficient models with higher efficiency ratings. Decarbonization and electrification are key buzzwords, with the Inflation Reduction Act of 2022 implementing incentives designed to push homeowners to heat pump water heaters and condensing gas tankless water heaters. Within the gas tankless category, it will tend to promote the higher Uniform Energy Factor (UEF) condensing tankless technologies.

Despite the changing regulatory environment, the gas tankless category continues to grow. Homeowners like the idea of never running out of hot water, and gas tankless is viewed as a high-end home upgrade. Rheem designs and manufactures residential tankless water heaters for all types of homes, with different sizes, flow rates, features and energy-efficiency levels.

David Federico Senior Director of Marketing, Rinnai

The tankless water heater market continues to see an increase in demand for more efficient and sustainable products, which has driven how Rinnai prepares for the future. 

Rinnai is always pushing toward better efficiencies. We recently launched the SENSEI RX Series, which has a 0.98 UEF, providing  robust efficiency and energy savings. And in this macroeconomic climate, that’s significant. End-users are looking for ways to save as much money as possible. And tankless can provide those cost savings in lower utility bills every month. 

We continue to strive toward developing more sustainable solutions and providing more energy-efficient products.

Lor Krueger Vice President Sales and Marketing, SioGreen

There is a national trend to go electric and ban gas appliances, which includes water heaters. This trend is presenting a tremendous opportunity for electric tankless water heaters. SioGreen is ideally positioned to take advantage of this movement to electric. 

Typical electric tankless water heaters have had a bad reputation. SioGreen eliminates all metal heating elements, which are the No. 1 cause of water heater failure. We have a patented Quartz Infrared heat exchanger that uses carbon-coated quartz tubes and infrared energy to heat water. 

These clean quartz tubes will not support mineral scaling and are maintenance-free. We are so confident in these heat exchangers, we guarantee them for 10 years. No other company guarantees its metal heating elements. The SioGreen Quartz Infrared electric tankless water heaters are a game-changer.

Julius Goodman Head of Marketing, Stiebel Eltron 

The electrification initiatives of recent years continue to drive interest in sales and installation of our electric tankless; our recently introduced compact models are helping with this push. More energy-efficient than electric or gas tanks, they are perfect for situations where heat pump water heaters are not suitable. 

These new models offer all the green advantages of electric tankless: no venting and a small size allow installation near a draw-off point, saving water because less cold water needs to be flushed before hot water is available, and saving energy because a shorter pipe run limits standby loss in the piping. The new models offer additional savings, including a low activation rate for water savings and self-modulation for energy savings.

We believe that as electric energy from renewable technologies rather than the use of fossil fuels increases, electric tankless will become even more a part of the green revolution.