Global Central Heating Boilers

Report Overview

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This study examines the global market for central heating boilers. Demand for boilers is segmented by market and global geographic region. Historical data (2010, 2015, and 2020) and forecasts for 2025 and 2030 are presented for central heating boiler demand in current US dollars (including inflation) and units at the global, regional, and country regions.

Central heating boilers include:

• cast iron and steel types
• district heating boilers, including large-scale boilers and series of large-scale central boilers that generate hot water to provide heat for an industrial complex or a densely populated urban area

Excluded from the scope of this study are:

• portable versions of equipment
• products associated with combined heat and power generation systems
• fluid circulation systems, including radiators used with boilers
• used and rental equipment
• equipment used in vehicles

Data are segmented by residential and nonresidential markets:

• residential
  • single-family detached houses
  • single-family attached houses (e.g., townhouses)
  • apartment or condominium buildings with multiple dwelling units
  • manufactured homes, which are housing units constructed on a permanent chassis with wheels for on-road transportation to the site at which the unit will be placed
• nonresidential
  • institutional buildings (e.g., healthcare and educational facilities, religious establishments)
  • office and commercial structures (e.g., data centers, office buildings, retail establishments, hospitality facilities, warehousing and storage facilities not located on industrial sites, and other commercial structures such as banks and theaters)
  • industrial facilities (e.g., manufacturing plants and associated offices)
  • other nonresidential structures such as airport and bus terminals, recreational buildings, police stations, fire stations, and prisons

Housing units located in a structure whose primary purpose is something other than habitation, such as a small living space contained in a larger retail facility, are outside of the study’s scope.

Unit Demand

Global demand for boilers in unit terms is forecast to increase 1.6% per year to 8.1 million units in 2025:

• The Asia/Pacific region will account for the largest share of gains, due to strong growth in building construction activity as the region industrializes.
• Western Europe will remain a large market and will reverse recent demand declines, but growth will be sluggish. Sales will be supported by replacement demand for the region’s existing boiler stock, with attempts to replace older equipment with more energy-efficient models providing opportunities.
• Eastern Europe accounts for a larger share of demand in unit terms than in dollar terms, reflecting the large number of lower cost models sold in Russia.

Demand by Market

Global demand for boilers is projected to rise 3.5% per year to $16.0 billion in 2025. The rate of growth will be similar in both the residential and nonresidential markets, with nonresidential sales accounting for a larger share of gains. Sales increases will accelerate relative to the 2015-2020 period as both major sectors of building construction recover from the impact of the COVID-19 pandemic.

Pricing Trends

Global average prices for boilers are expected to increase 1.9% per year through 2025. Price growth will be supported by:

• ongoing trends toward higher value products, such as energy-efficient or smart models incorporating advanced components or sensors
• government standards that will further accelerate the shift toward environmentally friendly equipment

However, growth in product prices will be moderated by continuing global competition and consolidation of distribution channels.

Competitive Products

Boilers primarily compete with heat pumps and warm air furnaces:

• Boilers are expected to lose market share to heat pumps in most countries, as the strong environmental profile of heat pumps has led to these products becoming the beneficiary of numerous government incentive programs.
• The ability of heat pumps to also provide cooling functions further promotes the growth of these products over boilers in areas where both heating and cooling are desirable.
• Warm air furnaces are mainly used in the US, where the popularity of central air conditioning has contributed to building practices in which the inclusion of ductwork necessary for furnace usage tends to be standard.
• The prevalence of warm air furnaces in the US and Canada will continue to limit boiler demand in this region, but competition from these products is less relevant in areas where buildings with ductwork are uncommon.

Global demand for central heating boilers is forecast to increase 3.5% per year to $16.0 billion in 2025. In unit terms, sales will grow 1.6% annually to 8.1 million. Demand will be driven by rising building construction activity and the ongoing need for replacement boilers.

Energy Efficiency Improvements Crucial to Retaining West European Market

Western Europe has historically been a particularly large market for central heating boilers. High demand is driven by the region’s cool climates, high levels of development, and building practices that have made boilers the dominant form of heating technology.

However, boilers in Western Europe are rapidly losing share in the heating equipment market to heat pumps, a process that is expected to be ongoing throughout the 2020s. The shift toward heat pumps has been driven by the strong environmental profile of these products, which has led to them being supported by various government incentive schemes. In order to keep pace and mitigate further regulatory pressure, boiler suppliers must continue to invest in improving the energy efficiency of their products.

Climate Limits Opportunities in Many Emerging Markets

Most of the world’s most dynamic and fastest growing economies are located in warm weather regions, where climate factors will keep boiler demand limited even as economies grow. As a result, boiler manufacturers face a challenging market environment, and sustaining replacement sales in large, mature markets must represent a core strategy. However, there are some opportunities for growth in less heralded emerging markets, such as those in Central Asia, which feature cooler climates.

Hydrogen Boilers Require Development

Oil- and gas-powered boilers are increasingly being targeted by climate-related regulations, with the International Energy Agency suggesting that an aggressive plan could even completely ban gas boilers by 2025. The IEA’s proposed alternative is hydrogen-powered boilers, a technology that is in the early stages of development. Companies like BDR Thermea and Bosch have deployed hydrogen boilers in pilot projects, but there are not yet any commercially available models.

The basic technology of hydrogen boilers is relatively straightforward, and the larger challenge surrounds the logistics of hydrogen supply, as pipeline infrastructure will need to be converted and more efficient methods of transporting hydrogen will need to be developed. As such, partnership with natural gas firms and utilities will be crucial. In the short term, boiler suppliers are likely to begin deploying hydrogen-ready boilers that can operate on both current natural gas mixes and future hydrogen infrastructure.