Water Electrolysis Market Report 2026

The water electrolysis market size has grown strongly in recent years. It will grow from $8.46 billion in 2025 to $9.26 billion in 2026 at a compound annual growth rate (CAGR) of 9.4%. The growth in the historic period can be attributed to expansion of industrial hydrogen demand, availability of grid-connected electricity, early adoption of alkaline electrolysis technology, growth of chemical and refining industries, initial renewable energy integration.

The water electrolysis market size is expected to see strong growth in the next few years. It will grow to $13.16 billion in 2030 at a compound annual growth rate (CAGR) of 9.2%. The growth in the forecast period can be attributed to rising investments in hydrogen economy, increasing government decarbonization targets, expansion of renewable power capacity, growing adoption of hydrogen in mobility and storage, continuous reduction in electrolyzer costs. Major trends in the forecast period include expansion of green hydrogen production projects, rising adoption of pem and alkaline electrolyzers, growing integration with renewable energy sources, increasing focus on electrolyzer efficiency improvements, deployment of large-scale industrial electrolysis systems.

The rising demand for hydrogen production is expected to propel the growth of the water electrolysis market going forward. Hydrogen production refers to the process of generating hydrogen gas through methods such as electrolysis, steam methane reforming, and biomass gasification. This demand is driven by the increasing global focus on reducing carbon emissions and transitioning toward cleaner energy sources. Water electrolysis supports hydrogen production by using electricity to split water into hydrogen and oxygen, offering a clean and sustainable method of hydrogen generation, particularly when powered by renewable energy. For instance, in October 2024, according to the International Energy Agency (IEA), global hydrogen production reached 97 million tonnes in 2023, with less than 1% produced through low-emissions pathways. The IEA also reported that installed water-electrolyser capacity increased to 1.4 GW by the end of 2023 and is projected to reach 5 GW by the end of 2024, with China accounting for nearly 70% of committed capacity additions. Therefore, the rising demand for hydrogen production is driving the growth of the water electrolysis market.

Key players in the water electrolysis market are focusing on developing innovative products, such as proton exchange membrane (PEM) water electrolyzers, to improve hydrogen production efficiency and lower energy consumption. PEM water electrolyzers use a solid polymer electrolyte to separate water into hydrogen and oxygen through an electrochemical process, offering high efficiency and versatility in hydrogen production. For instance, in March 2024, Sungrow Power Supply Co. Ltd., a manufacturing company based in China, introduced the 300Nm³/h PEM Water Electrolyzer. This device produces 300Nm³ of hydrogen per hour with high efficiency, requiring less than 4.15kWh/Nm³. It is designed to accommodate flexible hydrogen production using renewable energy sources, ensuring optimal performance in various scenarios.

In April 2024, Andritz AG, an Austria-based machinery manufacturing firm, acquired a 13.8% stake in HydrogenPro for an undisclosed sum. This acquisition bolsters the strategic partnership between Andritz and HydrogenPro, improving their capacity to serve Andritz’s customers more effectively. HydrogenPro, based in Norway, specializes in high-pressure alkaline electrolyzers (AEL), which are essential for large-scale production of green hydrogen.

Major companies operating in the water electrolysis market are Robert Bosch GmbH, ThyssenKrupp AG, Siemens Energy AG, Linde AG, Toshiba Energy Systems & Solutions Corporation, Cummins Inc., Sungrow Power Supply Co. Ltd., LONGi Green Energy Technology Co. Ltd., Plug Power Inc., Sunfire GmbH, Nel ASA, Ohmium International Inc., Shandong AUYAN New Energy Technology Co. Ltd., HydrogenPro ASA, Ceres Power Holdings plc, McPhy Energy SA, Horizon Fuel Cell Technologies Pte Ltd, ITM Power PLC, Giner ELX Inc., SES Hydrogen, Enapter AG, Elogen SAS, Next Hydrogen Solutions Inc., CAPLINQ Corporation, GreenH Electrolysis.

Europe was the largest region in the water electrolysis market in 2025. North America is expected to be the fastest-growing region in the forecast period. The regions covered in the water electrolysis market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the water electrolysis market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Italy, Spain, Canada.

The water electrolysis market consists of revenues earned by entities by providing services such as electrolyzer installation and commissioning, maintenance and repair services, consulting, and system design. The market value includes the value of related goods sold by the service provider or included within the service offering. The water electrolysis market also includes sales of polymer electrolyte membrane water electrolyzers, high-pressure electrolyzers, and modular electrolyzers. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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