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Solar Thermal For Domestic Hot Water (DHW) Market Revenue Growth Supported By A CAGR Of 5.98% Through 2030
The market for solar thermal domestic hot water (DHW) systems has seen significant expansion in recent times, with its value expected to rise from $4 billion in 2025 to $4.33 billion in 2026, reflecting a compound annual growth rate (CAGR) of 8.2%. This historic growth has been driven by factors such as reduced production costs for solar collectors, an increased reliance on fossil fuels, the availability of government-backed incentives for solar water heating, a boom in urban residential development, and heightened public awareness regarding renewable options for hot water.
The market for solar thermal systems used in domestic hot water (DHW) applications is anticipated to experience robust expansion in the coming years. By 2030, it is projected to reach $5.98 billion, driven by a compound annual growth rate (CAGR) of 8.4%. This forecasted period’s growth can be explained by several factors, including the wider deployment of electrified heating systems within homes, improvements in thermal storage efficiency, the incorporation of hybrid heating solutions into building designs, stricter energy efficiency standards for residential infrastructure, and better performance in next-generation evacuated tube collectors. Key developments shaping this period involve the hybrid combination of solar thermal setups with auxiliary heating technologies, a greater uptake of thermosiphon-based passive water heating systems in residential structures, an increase in rooftop retrofits for existing housing, progress in high-efficiency vacuum tube collector technologies, and a growing need for modular plug-and-play solar hot water kits that allow for rapid installation.
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#Solar Thermal For Domestic Hot Water (DHW) Market Growth Drivers And Industry Catalysts
The growing emphasis on green building certifications is anticipated to accelerate the expansion of the solar thermal for domestic hot water (DHW) market in the coming period. Such certifications serve as official acknowledgments for structures that adhere to sustainability, energy efficiency, and reduced environmental impact criteria. Their prevalence is on the rise, fueled by an increasing demand for eco-friendly and energy-efficient buildings, which motivates developers to embrace sustainable approaches. Solar thermal systems for DHW contribute to achieving these certifications by offering a renewable and efficient method for water heating, thereby lowering a building’s carbon emissions and energy usage. To illustrate, in July 2024, the Green Building Council, a US-based nonprofit, reported that over 46,000 residential projects received LEED certification, reflecting nearly a 5% boost in new applications from 2023. As a result, the upward trend in green building certifications is fueling progress in the solar thermal for DHW market.
Escalating energy costs are predicted to drive advancement in the solar thermal for domestic hot water (DHW) market. Energy costs encompass the expenses tied to generating, acquiring, and utilizing energy sources like electricity, fuel, and gas. These costs are climbing due to heightened global demand, which strains limited supplies and pushes prices upward. Solar thermal DHW systems mitigate these expenses by harnessing sunlight for water heating, which reduces reliance on electricity or fuel. For example, in October 2023, Eurostat, a European Union agency based in Luxembourg, noted that average household electricity prices in the EU increased to $31.21 (€28.9) per 100 kWh in the first half of the year, compared to $27.32 (€25.3) per 100 kWh in the same period of 2022. Consequently, rising energy costs are stimulating growth in the solar thermal for domestic hot water market.
Increasing disposable income is expected to propel the expansion of the solar thermal for domestic hot water (DHW) market. Disposable income represents the funds individuals or households have left for spending or saving after taxes and required deductions. This income is growing as wages rise, allowing people to retain more post-tax earnings for discretionary purposes. Greater disposable income encourages the uptake of solar thermal DHW systems by making initial installation costs more manageable for consumers, thereby boosting market adoption. According to Statistics Iceland, a government agency in Iceland, household disposable income increased by 6.6% in the second quarter of 2024 compared to the same quarter in the previous year. Thus, the increase in disposable income is driving the growth of the solar thermal for domestic hot water (DHW) market.
Solar Thermal For Domestic Hot Water (DHW) Market Segment Analysis Highlighting Growth Areas
The solar thermal for domestic hot water (dhw) market covered in this report is segmented –
1) By Component: Solar Storage Tanks, Heat Exchangers, Circulation Pumps, System Controllers, Expansion Tanks, Anti-Freeze Solutions, Mounting Structures And Racking
2) By System Type: Passive Solar Water Heating Systems, Active Closed-Loop Systems, Active Open-Loop Systems, Drainback Solar Water Heating Systems, Thermosiphon Solar Water Systems, Forced Circulation Solar Systems
3) By Capacity: Small Capacity Systems, Medium Capacity Systems, Large Capacity Systems
4) By Distribution Channel: Direct Sales, Distributors, Online Sales, Other Distribution Channels
5) By End User: Residential, Commercial, Industrial
Subsegments:
1) By Solar Storage Tanks: Pressurized Solar Storage Tanks, Non Pressurized Solar Storage Tanks, Single Coil Solar Storage Tanks, Double Coil Solar Storage Tanks, Integrated Collector Storage Tanks
2) By Heat Exchangers: Shell And Tube Heat Exchangers, Plate Heat Exchangers, Coil Type Heat Exchangers, Double Wall Heat Exchangers, External Heat Exchangers
3) By Circulation Pumps: Single Speed Circulation Pumps, Variable Speed Circulation Pumps, High Efficiency Circulation Pumps, Direct Current Powered Pumps, Alternating Current Powered Pumps
4) By System Controllers: Differential Temperature Controllers, Programmable Logic Controllers, Smart Digital Controllers, Timer Based Controllers, Multi Function Controllers
5) By Expansion Tanks: Diaphragm Expansion Tanks, Bladder Expansion Tanks, Open Expansion Tanks, Closed Expansion Tanks, Vertical Expansion Tanks
6) By Anti Freeze Solutions: Glycol Based Solutions, Propylene Glycol Solutions, Ethylene Glycol Solutions, Corrosion Inhibited Solutions, High Temperature Resistant Fluids
7) By Mounting Structures And Racking: Roof Mounted Structures, Ground Mounted Structures, Tilted Mounting Structures, Adjustable Angle Racking Systems, Fixed Angle Mounting Systems
Solar Thermal For Domestic Hot Water (DHW) Market Leading Companies: Who Holds Significant Market Presence?
Major companies operating in the solar thermal for domestic hot water (dhw) market are Rheem Manufacturing Company, A. O. Smith Corporation, Ariston Holding N. V., Vaillant Group, Himin Solar Energy Group Co. Ltd, Solimpeks Solar Energy Corp., Racold Thermo Limited, Jiangsu Sunrain Solar Energy Co. Ltd, Inter Solar Systems Private Limited, GREENoneTEC Solarindustrie GmbH, SunEarth Inc., Sonnenkraft Solar Systems GmbH, Sunerg Solar S. r. l., Solar Therm UK Ltd, Termosolar Energia Solar S. A., Heliodyne Inc., Ritter Energie und Umwelttechnik GmbH & Co. KG, Solahart Industries Pty Ltd, Rinnai Corporation, Nobel International EAD, Dimas Solar S. A., Termicol Energia Solar S. L.
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Solar Thermal For Domestic Hot Water (DHW) Market Largest Region By Revenue And Market Share
Asia-Pacific was the largest region in the solar thermal for domestic hot water (DHW) market in 2025. Asia Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the solar thermal for domestic hot water (DHW) market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
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