The global solar water heaters market size is expected to be worth USD 6.57 Billion in 2025. It can surge to a valuation of USD 9.75 Billion by 2032. The market is anticipated to exhibit a robust CAGR of 5.8% during the forecast period (2025-2032).  

The market growth is driven by increasing energy expenses globally and demand for cost-effective heating solutions. Improvements in collector and heat exchanger designs, coupled with government subsidies and waivers for renewable energy installations, can augur favorably for the market.

However, a lack of awareness of the benefits of solar water heaters can prove to be a hurdle to the market growth.

Key Market Insights

The solar water heaters market is marked by innovations in solar water heater systems, integration of heaters in rural areas, and adoption of hybrid heating systems.

• By collector, the unglazed water collector segment is expected to score a 20.0% share in 2025. This can be attributed to its use in warmer climates and in agriculture and industrial pre-heating sectors.
• By system, the pumped system segment is anticipated to attain a 37.5% revenue share of the market in 2025. The surge in installations of pumped systems in North America and Europe, owing to freeze protection and remote-flow control benefits, can drive the segment’s growth.
• By end user, the industrial segment is anticipated to contribute a significant revenue share in 2025. This can be attributed to the use of solar water heaters for preheating water for processes in the food manufacturing and chemical processing sectors. The use of evacuated tube collectors and the construction of solar water heater plants can drive the segment’s growth over the forecast period.
• By region, the Europe region is expected to account for robust share of the solar water heaters market in 2025. This can be attributed to renewable energy production policies and incentives for the installation of solar panels. Countries such as Germany, Italy, and Russia, which are enforcing laws to lower carbon emissions, are prime instances of this trend.

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Solar Water Heaters Market Report Coverage

Market Dynamics

The solar water heaters market growth is driven by the demand for eco-friendly alternatives to heating and the rollout of renewable energy policies to drive installations. Solar panel grants accorded to households can ease their energy expense bills and drive interest in installations. For instance, the Energy Company Obligation 4 (ECO4) scheme in the U.K. lets household owners from low-income groups avail themselves of the benefits of solar water heaters while the government bears their costs. The launch of similar schemes by governments can bolster the market growth over the forecast period.

Large-scale solar projects for increasing the capacity of accumulating clean energy and grid upgrades can augur favorably for the market. The development of solar parks in India, Estonia, and Latvia is evidence of the massive potential of solar energy.

Market Opportunity: Hybrid Heating Water Systems to Open the Path to New Opportunities

Hybrid heating water systems can facilitate the storage and utilization of thermal collectors to accumulate energy in regions receiving low sunlight. The ability to produce hot water in commercial, residential, and industrial settings can drive the demand in the solar water heaters market. On March 17, 2025, Nexol Photovolthermic announced the launch of a hybrid solar water heater for residential use. The item is a plug-and-play system that saves time on installation charges, making it convenient in large households. Renewable energy policies that incentivize installation can be favorable for the market growth.

Market Challenge: High Initial Capital to Prove Challenging

The high initial capital required for the procurement and installation of solar water heaters can be expensive for buyers. The lack of space for hosting solar water heaters in dense urban neighborhoods and the dependence on weather for accumulating solar energy can limit the market growth.

Analyst’s View

• The solar water heaters market growth is driven by the urgent need for lowering carbon emissions and offerings of eco-friendly water heating alternatives.
• The unglazed water collector segment is expected to perform exceptionally in 2025 owing to its efficacy in regions of warmer climates and natural sunlight.
• Key players are partnering with OEMs to work on energy efficiency directives and drive green industrial policies.

Recent Developments

On April 08, 2025, the Product Development Center was inaugurated by A.O. Smith Corporation, a leading manufacturer of water heaters in the U.S. Over the coming years, the innovation of sustainable water heaters is expected to be driven by this center.

Competitor Insights

• V-Guard Industries Ltd.
• O. Smith Corporation
• Mahindra Solar One
• SunEarth Inc.
• Rheem Manufacturing Company
• Tata Power Solar Systems
• Chromagen
• SunTank
• Rinnai Corporation
• Websol Energy System
• Himin Solar Co. Ltd.
• Azure Power India
• Vikram Solar
• Lanco Solar Private
• Viessmann
• Honeywell International Inc.
• Viessmann Manufacturing Co. (U.S.) Inc.
• Ariston Thermo Group

Market Segmentation

• By Collector
• Flat Plate Collector
• Evacuated Tube Collector
• Unglazed Water Collector
• By System
• Thermosiphon
• Pumped System
• By End Use
• Residential
• Commercial
• Industrial

Regional Insights

• North America
  • U.S.
  • Canada
• Latin America
  • Brazil
  • Argentina
  • Mexico
  • Rest of Latin America
• Europe
  • Italy
  • Germany
  • U.K.
  • Spain
  • Russia
  • France
  • Rest of Europe
• Asia Pacific
  • South Korea
  • India
  • China
  • Japan
  • Australia
  • ASEAN
  • Rest of Asia Pacific
• Middle East
  • GCC Countries
  • Israel
  • Rest of Middle East
• Africa
  • South Africa
  • North Africa
  • Central Africa