From boiling water on stove to having solar powered heaters on the roof, the water heating industry in India has seen a phenomenal change; Mathew Job traces the growth story.
If you trace the history of water heating, we need to go back to the 1st century BC when ancient Romans used to bathe in public baths heated by underground furnaces or hypocausts. In the 1800s, in the west, modern indoor plumbing was purposely located near home’s fireplace to provide warm water. In 1868, an Englishman named Benjamin Maughan invented the electric geyser, the first instant water heater. In 1889, a Norwegian, Edwin Rudd invented the first gas-fueled water heater while in 1891, an American, Clarence Kemp patented the first commercial solar water heater. In 1927, a German company, Stiebel Eltron marketed the first electrically powered water heaters.
Gradual growth with adaptation to technology:
If you look at the water heating methods in India, they are primarily boiling, immersion heating rod, electric water heaters, solar water heaters and gas water heaters.
In terms of organised water heating, electric water heaters are the most common water heating method with a penetration of close to 10 per cent. While electric water heating is the conventional method, solar water heating is gaining significance in the last 5 years or so. Gas water heaters have been stagnant over the last couple of years because of low diffusion of piped gas networks. Since availability of hot water for bathing purposes becomes a necessity during winter months, boiling of water is the most common and affordable practice in the lower socio economic classes (SEC C and below). Higher SECs use electric or solar water heating.
The water heater industry is currently in the stage of significant growth after recently being freed from government restrictions of the “small scale industries” tag. With the penetration still low, we have seen many large players, both national and multi-nationals, entering the category.
The category is rapidly moving towards higher involvement with consumer becoming more discerning towards brands while purchasing water heaters. Consumer behavior and habits are changing, with higher focus on having a trendy bathroom.
Challenges & Opportunities:
The challenges and opportunities for the industry as a whole relate to the penetration of the category which is still low at around 10 per cent. This signifies that the potential for the category to grow is immense. With the disposable income in the Indian households going up, the penetration is definitely going to increase in the next few years. It is also pertinent to note that water heater ownership is not restricted to a single unit in a household but has a potential of multiple units, with multiple bathrooms and sometimes even kitchens. So that expands the scope of the category further.
The growth of the Indian water heating market is driven by new households and largely depends on the construction growth. Construction is the major market driver as many water heaters are installed in new homes. The replacement and refurbishment market is still small due to longer product replacement cycle.
However, we have challenges in terms of infrastructure with electricity shortages and frequent outages being major constraints for higher penetration of electric water heaters, especially in Tier 2 and 3 towns.
As per our internal estimates, roughly 30 per cent of the household electricity consumption is by water heaters. Bureau of Energy Efficiency (BEE) has introduced star ratings for electrical water heaters category as well. This has ensured that manufacturers invest in R&D and bring out products beneficial to consumers.
At the end of it all, the consumer reigns supreme with the manufacturers engaging actively with the consumer in order to meet expectations. The product offerings are getting more superior and sophisticated and consumer centric.
How to select a right heating system?
The suitability of the type of water heater depends upon the available infrastructure and usage requirements. Both Electric and Solar water heaters are popular methods in India that are gaining ground. With the penetration of water heaters being low in India, both these categories have tremendous scope of growth.
Some of the key factors to be considered, while implementing a new water heating technology include:
1. Source of Energy- Renewable, electricity or Gas.
2. Energy Efficiency especially in case of Electric Water Heaters (BEE Star Ratings).
3. Cost (Implementation and Running).
4. Durability and maintenance.
(The author is Managing Director, Racold Thermo Ltd)