Report

India solar water heater market is projected to witness a CAGR of 7.20% during the forecast period FY2025- FY2032F, growing from USD 351.60 million in FY2024 to USD 613.21 million in FY2032. The market has experienced significant growth in recent years and is expected to maintain a strong pace of expansion in the coming years.
In India, multiple factors contributing to the growth of solar water heaters are the rise in investment in renewable energy technology and upcoming building regulations. Moreover, the rising costs of conventional energy sources have prompted consumers to opt for cost-effective solutions which drive the demand for solar water heaters in residential and commercial applications. Solar water heaters result in significant savings on energy costs and offer other benefits to the house owners, economically in the long term. The residential sector captures the highest solar water heaters market share in the country.
The high rate of urbanization in India has increased hot water demand in residential buildings, hotels, hospitals, and educational institutions which drives the demand for solar water heaters in the market. Moreover, the increasing trend toward the adoption of environment-friendly energy sources along with the efficiency and performance enhancement of heaters is another factor that promotes the growth of the solar water heaters market in coming years. The government is planning to release new quality control measures for solar water heaters to boost industry standards, which will increase the adoption of solar water heaters in the residential sector.
For instance, in October 2024, The Ministry of New and Renewable Energy (MNRE) decided to issue an official quality control order to maintain the quality of solar water heaters. Following all compliance is mandatory for the manufacturer which will improve the effectiveness of the product. This development will boost the adoption rate of solar water heaters in the market.
Growing Consumer Awareness of Renewable Energy Technologies Boosts the Demand for Solar Water Heaters
Consumers are aware of the growing concerns related to energy security on a global scale. Many traditional energy sources are in a depleting phase; consequently, energy prices are rising. Solar water heaters help reduce reliance on conventional energy sources, which often suffer from supply interruptions and price volatility. Consumers recognize the savings associated with solar water heaters in terms of significant energy savings, reduced electricity bills, and other environmental benefits, which motivate the residential sector to install them.
With the rise in consumer awareness regarding climate change and environmental issues, promoting the adoption of renewable energy technologies will help reduce the carbon footprint. Furthermore, solar water heaters are powered by sunlight, making them a green option for heating that offers greater savings and lower carbon emissions. Growing awareness of the environmental benefits of renewable energy sources is driving demand for rooftop solar water heaters. This shift towards environmentally responsible technologies is increasing demand in the solar water heater market.
In addition, manufacturers and government authorities have engaged in educational campaigns to inform consumers about the merits of renewable energy technologies, such as solar water heaters. These campaigns demystify technology and address misconceptions, making prospective consumers feel more comfortable embracing solar water heaters as their primary source of hot water.
For instance, in October 2024, the government is organizing an awareness camp named "Har Ghar Solar Campaign" at Janeshwar Mishra Park in Lucknow to make people aware of the government schemes and grants. This development will help to increase awareness regarding the new schemes which will boost the demand for solar water heaters in the market.
Rising Environmental Regulations Drive the Market Growth
The country is implementing several environmental regulations aimed at controlling carbon footprints and significantly increasing the demand for renewable energy technologies in the Indian market. Adhering strictly to these regulations creates a framework that encourages the adoption of solar water heating systems by various end-users across the country. Furthermore, the Indian government is setting ambitious targets for reducing greenhouse gas emissions by 2030. This long-term vision promotes investment in solar technology within both the residential and commercial sectors, ensuring compliance with environmental regulations. Solar water heating technologies contribute to national efforts to reduce the dependency on fossil fuels, thereby driving their demand in the market.
The upcoming environmental regulations are strongly promoting the construction of green building practices, which prioritize sustainability and energy-efficient technologies. The integration of solar water heating systems into new constructions aligns with green building regulations and helps reduce overall energy consumption and carbon emissions. The Indian government has implemented various energy efficiency standards through regulations such as the Energy Conservation Building Code (ECBC), which mandates the use of solar water heating systems to meet a specified percentage of hot water demand in households. As more builders adopt green certifications and comply with eco-friendly building codes, the demand for solar water heaters in the market will likely increase.
For instance, Union Budget 2024 has taken significant steps towards promoting sustainability by supporting the development of green buildings. The Union Budget includes PM Surya Ghar Muft Bijli Yojana, which aims to install rooftop solar plants for one crore households, which is a promising initiative that could complement green building efforts by providing clean, renewable energy directly to homes. This development will increase adoption of solar water heaters in the market.
Favorable Government Initiatives and Incentives Creates Market Opportunities
The government and related authorities such as Ministry of New and Renewable Energy (MNRE) are coming up and implementing new innovative policies for the upliftment of the solar energy market in the country. The government is initiating the promotion of renewable energy technologies by providing subsidies, tax incentives, and rebates for solar water heaters which significantly influence purchasing decisions.
Secondly, the government has initiated and implemented policies toward adoption by streamlining the process for approval of solar water heaters on rooftops. The initiatives by the government are lifting renewable energy through the reduction of barriers making the adoption of solar technology simpler for homeowners. Such initiatives directly align with goals of sustainability that will set a good environment to make the country adopt more of solar energy.
Governments are providing investment initiatives to manufacturers for research and development related to solar technologies. The research and development activities support the advancements that lower costs and further improve system efficiency. Innovations in solar water heating systems make systems more attractive to consumers, hence, creating the opportunity for market growth in the coming years. In addition, the state governments also play a vital role by implementing localized manufacturing initiatives that cater to regional needs which helps the manufacturers to increase the production in the same area.
For instance, as per the Energy Efficiency & Renewable Energy Management Centre, a subsidy scheme is available for the domestic sector for the promotion of solar water heating systems in the sector. Through this scheme, a fixed incentive/rebate is given on the installation of solar water heating systems to the homeowner. This development will increase the demand for solar water heaters in the market.
Active Solar Water Heating Systems to Dominate the Market Share
Active solar water heating systems have the largest market share and dominate the market in India. The system utilizes solar energy to heat water at a high rate which makes solar water heaters an attractive option for residential and commercial applications. Furthermore, the advancements in solar technology have enhanced the efficiency and performance of the active solar water heating systems which makes the system more dependable and effective in various weather conditions.
The system contributes to reducing carbon emissions by utilizing renewable solar energy which drives its demand in green buildings and in large industries. Smart homes are able to connect with the systems which enables better optimization of hot water storage and usage which drives its demand in the residential sector. In addition, manufacturers are adopting innovative designs and materials which help to lower the cost of active solar water heating systems and create a market opportunity for growth in the forecast period.
North Region is the Fastest Growing Market
The Northern region of the country is the fastest-growing solar water heater market and is likely to continue this trend during the forecast period. This region comprises states such as Rajasthan and Uttar Pradesh, which have high solar irradiance, making it an ideal location for the installation of solar water heaters. Furthermore, state governments offer incentives in the form of subsidies, tax benefits, and net metering policies, which make solar water heaters more financially attractive in the region.
The region is rapidly urbanizing, leading to an increased demand for renewable energy technologies. Solar water heaters are becoming a viable solution by utilizing existing roof space without requiring additional space in bathrooms, which drives their demand in the area. Both industrial and commercial sectors are adopting solar water heater technologies as part of their CSR initiatives, further boosting demand across various sectors.
Future Market Scenario (FY2025 � FY2032F)
� The environmental benefits of renewable energy sources are increasing in awareness, thus propelling the demand for the solar water heater market.
� Innovations in installation techniques and system design make it easier for consumers to adopt new solar technologies which are expected to enhance the demand for solar water heaters in the forecast period.
� Technological advancement in solar has led to the development of more efficient solar collectors and systems which drive the demand for solar water heaters in the residential sector.
� Future government policies and subsidies create opportunities for the solar water heater market in the coming years.
Key Players Landscape and Outlook
Continuous innovation characterizes the landscape of solar water heaters, as companies compete in terms of energy efficiency, product lifespan, and unique features. The market outlook remains positive, owing to increasing investments in the production of solar water heaters and a rise in the adoption of renewable energy sources for producing hot water in the residential sector. Solar water heater manufacturers are promoting their products with improved system efficiency and competitive pricing, along with technical support, to drive growth in the solar water heater market. Product launches, agreements, business expansions, collaborations, certifications, and advancements in technology are projected to increase competition in this fast-paced market.
For instance, in July 2023, Sudarshan Saur Shakti Private Limited received both the ISI mark and a coveted �3-Star Rating� from the Bureau of Energy Efficiency (BEE), operating under the Ministry of Power for the solar water heater. This development will help the company gain customer confidence in the product and revenue in the near future.