From gas to electric to hybrid, to tank and tankless options, and even the need for direct, point of use, and indirect options, there’s no doubt about it — the variety of product lines available to meet water heater market demands are ever-increasing.

Recently, PHCPPros surveyed manufacturers in the industry for their insights on the trends currently impacting the water heater market and asked about the specific product innovations that set their product lines apart from the competition for our 2024 Water Heater Report. 

Electrification and decarbonization initiatives to drive greater efficiency were at the top of the list for many respondents, as is the need for greater connectivity and integrated system solutions. And no surprise: The regulatory environment continues to drive change throughout the industry. 

Team members from A. O.  Smith; Aerco; Bradford White Corp.; Bradley Co.; Chronomite Laboratories, Inc.; Heat-flo LLC; Intellihot Inc.; Lync; Navien, Inc.; PVI; Rheem Manufacturing; Rinnai; and Stiebel Eltron, Inc., participated in our annual survey and offered perspectives for both the commercial and residential markets. Read on to learn more: 

What are the current trends in the water heater industry? 

Megan Konieczka, product manager, A. O.  Smith

DOE regulatory changes regarding commercial water heating efficiencies are rapidly approaching, beginning in October of 2026. Similarly, we are already preparing for 2029’s NAECA 4 at A. O.  Smith as we continue to innovate into the future. There has been an overall shift to electrification in the past few years, and we expect for this to continue. Finally, we expect to continue to see incentives for contractors to meet efficiency standards in the form of rebates and tax credits. Our ENERGY STAR-certified Voltex AL currently allows homeowners to take advantage of these additional savings. 

Mark Croce, senior product manager, AERCO

The focus is on electrification and decarbonization, with increasing interest in high-efficiency, electric solutions that promote sustainability without sacrificing performance. For a complete decarbonization or full electrification solution, something that’s trending currently is combining electric boilers for space heating with indirect water heaters, a combination plant, which offers a streamlined approach to meet decarbonization targets and local regulations. Indirect water heaters enable facilities to fully electrify both space heating and DHW systems, enhancing energy efficiency while avoiding the need for large storage tanks or an increase in footprint — issues typically associated with heat pumps and electric water heaters.

Louise Prader, senior director, product management, Bradford White Corp.

For the heat pump water heater market, Wi-Fi connectivity has been a trend as water heaters have not previously been connected devices. Homeowners can now track energy usage and savings, plus the contractor can connect to the water heater remotely for troubleshooting if needed. For tankless products, we continue to see a trend towards 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 market. There are also ongoing efforts to enhance product designs and features.

Tony Clouse, industrial business development specialist, Bradley Co. 

Today’s specifiers and plumbing engineers are being tasked with minimizing energy consumption and cutting costs — all while improving performance in their operations. Saving valuable workspace is also important. Using tankless electric water heaters, which make operations more efficient and functional, address all of these needs. Tankless heaters provide reliable, on-demand hot water, consistent water temperature, high energy efficiency and easy installation, saving energy, time and money. Some models, like Bradley’s Electric Tankless Water Heaters, use a smaller footprint than bulky commercial tank water heaters. One unit has the capacity to efficiently feed multiple safety showers at once. 

Edward Fabrizio, vice president, general manager, Chronomite Laboratories, Inc.

Electric water heating is becoming popular with the “Green Initiative” due to the potential renewable energy source compared to fossil fuels.

Rich Corcoran, general manager, Heat-flo LLC

The regulatory environment continues to drive changes in residential and commercial water heating. We see this effecting demand for larger storage tanks, larger heat exchangers, and multi-energy capability. 

Robbie Svidron, corporate trainer, Intellihot Inc.

The industry is going through two massive changes simultaneously. First, new government regulations are requiring all commercial water heaters manufactured after October 2026 to be high efficiency systems. Secondly, we are seeing a substantial increase in the prevalence of heat pump water heating technology in commercial spaces. Intellihot is working to ensure that our customers have access to both highly efficient gas-fired water heaters and our industry first tankless heat pump water heater.

Brian Jahn, product manager, Lync

The topics of connectivity and integrated system solutions are key trends. Engineers and building owners increasingly recognize that peak performance comes from components working together, not just individual pieces. For example, a high-efficiency boiler will not perform optimally if a pump is over-circulating the system. Solutions offering complete system control and performance monitoring will be a game-changer in the coming years. Additionally, energy codes and regulations are driving the shift toward electrification and the adoption of refrigerants with low GWP (Global Warming Potential), reflecting the industry’s commitment to decarbonization and meeting emissions goals through 2050.

Chia Lin, product manager, water heaters, Navien, Inc.

The water heater industry is experiencing several trends in the current market. There is a growing demand for smart water heaters that allow homeowners and contractors to easily be able to control and view status of their water heaters anywhere online or via a smartphone. In addition, improvements in efficiency and water savings continue to be of top priority for consumers and home builders. Finally, advancement in water heater technology, in terms of both emissions reduction and additional built-in features, such as Wi-Fi capabilities, are all high on the list. 

Helen Ringle, product manager, PVI

With the move towards decarbonization, there’s a strong shift to electric water heaters and high-efficiency water heaters that reduce carbon footprints and comply with new or anticipated future regulations. Customization is also a key trend currently, as an increasing number of businesses and institutions seek tailored solutions that meet their specific needs and unique challenges such as flexibility in fuel options, sizing, footprint, and configurations to optimize efficiency and meet sustainability goals across various applications.

Ashley Pincott, senior product marketing manager, Rheem Manufacturing 

In May 2024, the DOE published a final rule updating water heater efficiency standards in an effort to help homeowners save money on utility bills while reducing energy use and harmful carbon emissions. The ruling’s largest move accelerates heat pump water heater adoption. Although the efficiency standards of gas-fired storage water heaters are only incrementally impacted by the ruling, super high efficiency, condensing gas water heaters will become increasingly important in helping governments meet carbon emission reduction targets. Rheem’s portfolio of ENERGY STAR, super high efficiency water heaters exceed all NAECA 4 efficiency standards. 

David Federico, senior director of marketing, Rinnai 

We currently see the water heater industry calling for products with higher efficiency ratings and increased connectivity. Tankless water heaters continue to be an excellent solution as they offer efficiency ratings of up to 0.98 UEF in condensing models, and up to 0.82 UEF in non-condensing models — both far superior to traditional tank style water heaters. While Rinnai’s latest innovation has been the launch of our Sensei RX and RXP condensing tankless water heaters, our RE Series non-condensing tankless play a critical role in offering consumers a highly efficient water heating solution at an affordable price point.

Julius Goodman, head of marketing, Stiebel Eltron, Inc.

We continue to see an increased effect from electrification initiatives that are driving sales and installation of electric tankless and heat pump technology to new heights. The electric tankless market is growing, and the increasing number of competitors into the market is testament to that. The heat pump market is poised on a growth spurt, whether it is stand-alone HPWHs or larger climate heat pumps like our WPL that deliver heating, cooling, and DHW. Electric is part of the green revolution, especially as energy through renewable technologies becomes a greater source than electric generation through the use of fossil fuels. 

What innovations set your company apart from your competitors? 

Megan Konieczka, product manager, A. O.  Smith

A. O.  Smith boasts one of the broadest heat pump water heater lines with a product for nearly every heat pump application. The comprehensive residential line, the Voltex family, brings extremely high efficiency products with features such as iCOMM connectivity and integrated leak technology, ultimately saving homeowners money. A. O.  Smith’s Voltex 120V HPWH remains the only 120-volt unit available nationwide, while the Voltex AL HPWH suits everyday homeowners as one of the quietest units on the market. The Voltex MAX HPWH can deliver homeowners around 40% more hot water than similar sized electric and heat pump water heaters. 

Mark Croce, Senior product manager, AERCO

AERCO sets itself apart through several key innovations, such as water heaters that offer precise temperature control, ensuring consistent hot water delivery and greater energy efficiency. Several of our water heating products also come in a very compact footprint and with no need for storage tanks. This saves valuable space, simplifies installation, and can reduce labor costs. Our newer units come with an integrated supervisory controller that makes it easy to set up and operate them and enables multiple units to be sequenced to further enhance system efficiency and reliability which are critical factors to today’s users.

Louise Prader, senior director, product management, Bradford White Corp.

Bradford White is the only company to feature Microban antimicrobial technology in water heaters. Our Vitraglas tank lining prolongs the life of the water heater by protecting it from the corrosive effects of water. Microban provides additional protection by helping to prevent the growth of bacteria, mold and mildew on the surface of the tank lining. This industry-exclusive feature is standard on nearly all tank-type water heaters from Bradford White. Additionally, we continue to develop and innovate our Bradford White products to provide flexibility and ease at installation and enhanced performance for the end user. 

Tony Clouse, industrial business development specialist, Bradley Co. 

Bradley Electric Tankless Water Heaters, powered by Keltech, deliver on-demand ANSI/ISEA-required tepid water to emergency safety showers and eye/face washes. While traditional water heaters require energy to maintain tepid water at all times, Bradley’s tankless water heaters use energy only when the safety units are activated, saving significant costs. CLE and SNA models feature the lowest pressure drops in the industry, providing greater reliability and performance than competitive models. Bradley models are precision-engineered with durable materials, such as copper tubing and robust brass castings, exceeding the standards of any application and setting the bar for other technologies in the category. 

Edward Fabrizio, vice president, general manager, Chronomite Laboratories, Inc.

Designing point of use electric instantaneous water heaters with the smallest heating chamber thereby conserving water, energy and delivering improved heating performance.

Rich Corcoran, general manager, Heat-flo LLC

Heat-flo LLC has prepared for the future, offering the widest range of indirect water heaters, buffer tanks, storage tanks and electric water heaters. We are certified to add electric back-up heating elements to any of our products — critical capability that supported the move to heat pumps and other renewable heat sources. Our platform features high-capacity heat exchangers, ideal for application with air to water heat pumps. A line of multi-energy tanks that features dual coils and electric back up provides the installer maximum flexibility. 

Robbie Svidron, corporate trainer, Intellihot Inc.

Innovation is integral to Intellihot’s mission. Our commercial tankless products make on-demand water heating possible for every project type and size. Currently, the innovation that sets us apart is the Electron Series: the world’s first and only tankless heat pump water heaters. Using a CO2-based refrigerant, these units deliver superior cold-weather performance at the lowest global warming potential. The Electron Series’ tankless design allows businesses to electrify without requiring large amounts of space or complicated installation parameters. Some other innovations include our drop-in tankless units, which have the same connections as traditional boilers, and our guaranteed, six-dimensional sizing calculator.

Brian Jahn, product manager, Lync

Lync leads the decarbonization of the water heating market for commercial applications with comprehensive system solutions. Our Aegis heat pump system goes beyond just a heat pump, offering an integrated water heating and storage solution complete with all necessary accessories. Additionally, Lync’s custom tank solutions provide duplex stainless-steel tanks and electric storage heaters, ensuring that the Aegis system can be tailored to fit a wide range of applications. This holistic approach sets us apart, delivering complete, adaptable solutions for optimal performance across diverse settings.

Chia Lin, product manager, water heaters, Navien, Inc.

Navien continues to be a leader in the tankless water heater market with innovations like our ComfortFlow system, consisting of both a built-in recirculation pump and a buffer tank. This setup helps with water savings and at the same time reduces issues commonly associated with a tankless recirculation system, namely low flow and temperature fluctuations. Navien’s EZNav multi-line control panel with built-in intuitive software allows for ease of installation and troubleshooting. Not to mention Navien’s dedication to excellent customer service and inventory management for reliable product delivery in times of need. 

Helen Ringle, product manager, PVI

PVI excels in terms of its unique materials, processes and customizable solutions. Our AquaPLEX tanks, a blend of austenitic and ferritic steels, offer superior corrosion resistance, which promotes greater reliability and longer lifespan. We also offer a one-of-a-kind, environmentally friendly anti-scale solution to mitigate the ever present challenges of hard water. Most of PVI’s products are configurable and customizable. For example, we provide various fuel options, including gas, electric, steam, and hybrid systems, making PVI’s offerings versatile and solution driven to meet diverse customer needs.

Ashley Pincott, senior product marketing manager, Rheem Manufacturing 

Rheem’s comprehensive suite of high-efficiency water heaters empower installers and homeowners to drive a more sustainable future with zero tradeoffs in value and comfort. ENERGY STAR certified heat pump, condensing gas, boiler and combi boiler innovations and their industry-leading technologies, reduce carbon emissions up to 75% by reducing energy use. Water heaters with built-in Wi-Fi powered by EcoNet technology and Ecoport (CTA-2045 port) allow easy connection to utility energy programs. Participation in utility energy programs reduces stress on the electric grid, prevents service disruptions and saves more on utility bills. Explore Rheem’s ENERGY STAR certified water heaters at Rheem.com/water-incentives.

David Federico, senior director of marketing, Rinnai 

The SENSEI RX and RXP are Rinnai’s most recent innovations in the tankless water heating category. They are the most advanced condensing tankless water heaters on the market that set the standard for efficiency at the industry leading 0.98UEF. These products were designed with the professional in mind, providing SKU consolidation by allowing the same unit to be installed inside or outside, with the addition of our Versa Vent vent cap. The units can be set up for propane or natural gas leveraging Smart Sense adaptive gas valve technology. All can be set up via Bluetooth using Rinnai Central app.

Julius Goodman, head of marketing, Stiebel Eltron, Inc.

Advanced Flow Control is a unique feature in our several models of our electric tankless water heaters. Invented by Stiebel Eltron more than 50 years ago and awarded German patent DE 3805441 C2, among others, our electric tankless water heaters have had a version of Advanced Flow Control since 1970. If demand temporarily exceeds capacity, Advanced Flow Control automatically reduces the flow rate just enough to maintain the set temperature. Water heaters from other manufacturers can deliver colder water than desired, but there is never a cold water surprise with Advanced Flow Control. No other manufacturer has anything like it.