Solar Thermal for Domestic Hot Water (DHW) Market Report 2026

The solar thermal for domestic hot water (DHW) market size has grown strongly in recent years. It will grow from $4 billion in 2025 to $4.33 billion in 2026 at a compound annual growth rate (CAGR) of 8.2%. The growth in the historic period can be attributed to declining solar collector manufacturing cost, rising fossil fuel dependency, government subsidy programs for solar water heating, increasing urban residential construction, growing consumer awareness of renewable hot water solutions.

The solar thermal for domestic hot water (DHW) market size is expected to see strong growth in the next few years. It will grow to $5.98 billion by 2030 at a compound annual growth rate (CAGR) of 8.4%. The growth in the forecast period can be attributed to expansion of electrified heating systems in households, improved thermal storage efficiency technologies, integration of hybrid heating solutions in buildings, tightening energy efficiency regulations in residential infrastructure, advancement in next-generation evacuated tube collector performance. Major trends in the forecast period include hybrid integration of solar thermal systems with auxiliary heating technologies, increasing adoption of thermosiphon-based passive water heating systems in residential buildings, growth in rooftop retrofit installations for existing housing infrastructure, advancements in high-efficiency vacuum tube collector technologies, rising demand for modular plug-and-play solar hot water kits for quick deployment.

Growing green building certifications are expected to drive the expansion of the solar thermal for domestic hot water (DHW) market in the coming years. Green building certifications are formal recognitions awarded to buildings that comply with standards for sustainability, energy efficiency, and reduced environmental impact. Green building certifications are increasing as the growing demand for sustainable and energy-efficient buildings encourages developers to adopt eco-friendly construction practices. Solar thermal systems for domestic hot water (DHW) support green building certifications by offering a renewable and energy-efficient method of water heating, thereby reducing a building’s carbon emissions and energy consumption. For instance, in July 2024, according to the Green Building Council, a US-based non-profit organization, more than 46,000 residential projects obtained LEED green building certification, indicating nearly a 5% increase in new registrations compared to 2023. Therefore, the increasing green building certifications are driving the growth of the solar thermal for domestic hot water (DHW) market.

The rising energy costs are expected to drive the growth of the solar thermal for domestic hot water (DHW) market going forward. Energy costs refer to the expenses incurred in producing, purchasing, and consuming energy such as electricity, fuel, and gas. Energy costs are rising due to increasing global demand, which places pressure on limited supply and results in higher prices. Solar thermal systems for domestic hot water (DHW) help reduce energy costs by utilizing sunlight to heat water, thereby decreasing dependence on electricity or fuel consumption. For instance, in October 2023, according to Eurostat, a Luxembourg-based European Union agency, average household electricity prices in the EU increased to $31.21 (€28.9) per 100 kWh in the first half of the year, up from $27.32 (€25.3) per 100 kWh during the same period in 2022. Therefore, the rising energy costs are propelling the growth of the solar thermal for domestic hot water market.

The rising disposable income is expected to drive the growth of the solar thermal for domestic hot water (DHW) market going forward. Disposable income refers to the amount of money an individual or household has available for spending or saving after taxes and mandatory deductions. Disposable income is increasing due to rising wages, which allows individuals to retain more post-tax income for discretionary spending. Higher disposable income supports the adoption of solar thermal DHW systems, as consumers can more easily afford the initial installation costs, thereby boosting market adoption. For instance, in October 2024, according to Statistics Iceland, an Iceland-based government agency, household disposable income increased by 6.6% in the second quarter of 2024 compared to the same period in the previous year. Therefore, the rise in disposable income is fueling the growth of the solar thermal for domestic hot water (DHW) market.

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.

Asia-Pacific was the dominating region in the solar thermal for domestic hot water (DHW) market in 2025. Asia Pacific is expected to be the rapidly expanding region during 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. The countries covered in the solar thermal for domestic hot water (DHW) market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The solar thermal for domestic hot water (DHW) market consists of sales of flat plate collectors, evacuated tube collectors, solar storage tanks, heat exchangers, circulation pumps, and integrated solar water heating systems. 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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