Description

The global commercial boiler market was valued at USD 1.9 billion in 2020 and is projected to reach USD 2.4 billion by 2027, growing at a CAGR of 4.2% from 2021 to 2027. Composite boilers are pressure systems that use combustible fuel or electricity to heat water for building heating. Some boilers use steam that has been converted from hot water, while others use cold water. The boiler's burners or electric coils create heat, which is then transferred to the water via the heat exchanger. The procedure generates either hot water or steam, depending on the kind of boiler. The hot water or steam is circulated throughout the commercial building via pipes. The water or steam enters radiators or other components that redistribute the heat, providing the necessary heating for your indoor spaces. Natural gas is the most common fuel used in commercial boilers. Boilers that burn fuel oil or employ electric resistance coils to generate heat from electricity are also available.

Building energy standards and increasing investment in the urban center expansion will likely drive growth in the commercial boiler industry. Modern heating systems are more efficient, have better synchronization with home automation systems, and have fewer breakdowns, all of which contribute to increased product demand. Government initiatives to decrease carbon footprint across commercial institutions have increased investment in upgrading existing buildings, driving the need for energy-efficient boilers.

Increased business sector expenditures in cost-effective and environmentally friendly infrastructure are also projected to fuel the global commercial boilers market's growth. High boiler production costs are holding down the global commercial boiler industry. In addition, these boilers are difficult to install and maintain. It is up to the users to handle the situation. The use of large-diameter cylinders is required when installing commercial boilers. The heat emitted by the radiators of commercial boilers is intolerable.

COVID-19 Impact on the Global Commercial Boiler

Some major economies suffering the COVID-19 crises include France, Germany, Italy, Spain, Norway, the UK, and others. Due to the virus outbreak, many industries have been shut down due to a lack of raw material availability and disruptions in the supply chain. The worldwide lockdown has suspended the activities of educational institutions activities, lodging, and many other sectors, which results in declining the demand for the commercial boiler. Manufacture of oil & gas, food & beverages, and other products across the globe came to a halt due to shortage of labor and unavailability of raw materials. This is expected to hamper the growth of the commercial boiler market.

The expansion of diverse end-use sectors is influenced by demand-supply gaps, price volatility, and changes in government policy. The COVID-19 epidemic has outrun any headwind regarding its immediate and long-term impact on business and consumers. Due to the economic limits imposed by the COVID-19 outbreak, the global economy of commercial boiler sectors has been rapidly slowing.

Global Commercial Boiler Market Dynamics

Drivers: Expansion of commercial tourism infrastructure

High summer temperatures and harsh winter temperatures characterize these states, resulting in highly seasonal space heating demand. Mountain states are anticipated to experience considerable development in the commercial boiler industry due to a rise in disposable income and increased tourists throughout the winter season. Due to a steady hot water demand from the hotel sector, the region's growing tourism sector is projected to make way for industry expansion. Moreover, as the educational sector in the state develops, there will be greater demand for efficient heating systems in the institutions, which is expected to complement the deployment of commercial boiler systems.

Restraints: High installation cost

The cost of steam boilers varies because of design characteristics and differing levels of after-sales service. Budget steam boilers have shorter lifespans, fewer warranties, and less customer service compared to regular steam boilers. Boilers with better performance have been developed thanks to the employment of unique metals and modern technology. The cost of installing a steam boiler system is high, making it one of the most important investments a manufacturing firm can make. The cost of installing steam boilers accounts for 15-20% of the entire boiler cost. This cost is expected to remain the same because of the high technical expertise involved in steam boilers and the separate construction of boiler houses in the utility area.

Opportunities: Rise in demand for a compact design of the steam boiler

Utility space is the major cause of concern for plant installations and existing plant expansions. Components such as the boiler, economizer, super-heater, and air preheater in process industries should have a compact design to maximize space use. With capacity installations, there is less room on the floor for utility devices. The necessity to optimize space has resulted in a significant demand for steam boilers with compact designs and low fuel use. Boiler manufacturers are focused on promoting steam boilers customized for different process requirements in various industries such as offices, hospitals, educational institutions, and lodging.

Scope of the Report

The study categorizes the commercial boiler market based on fuel type, technology, capacity, and end-users at the regional and global levels.

By Fuel Type Outlook (Revenue, USD Million, 2017-2027)

• Natural gas
• Oil
• Coal
• Others

By Technology Outlook (Revenue, USD Million, 2017-2027)

• Condensing
• Non-condensing

By Capacity Outlook (Revenue, USD Million, 2017-2027)

• Less than 10 MMBtu/hr
• 10-50 MMBtu/hr
• Others

By End-User Outlook (Revenue, USD Million, 2017-2027)

• Offices
• Hospitals
• Educational Institutions
• Lodging
• Others

By Region Outlook (Revenue, USD Million, 2017-2027)

• North America (US, Canada, Mexico)
• South America (Brazil, Argentina, Colombia, Peru, Rest of Latin America)
• Europe (Germany, Italy, France, UK, Spain, Poland, Russia, Slovenia, Slovakia, Hungary, Czech Republic, Belgium, the Netherlands, Norway, Sweden, Denmark, Rest of Europe)
• Asia Pacific (China, Japan, India, South Korea, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, Cambodia, the Philippines, Singapore, Australia & New Zealand, Rest of Asia Pacific)
• The Middle East & Africa (Saudi Arabia, UAE, South Africa, Northern Africa, Rest of MEA)

The natural gas segment is projected to account for the largest market share by fuel type

On the basis of fuel type, the commercial boiler market is segmented into natural gas, oil, coal, and others. In 2020, the natural gas segment generated the highest market share of 35.4% in the commercial boiler market. Natural gas is the second-largest energy source and the largest purchased energy source for commercial boilers. Natural gas and by-product/waste account for more than 80% of commercial boiler fuel consumption. Natural gas is an extremely efficient, economical fuel for heating in the commercial sector and is used for both water and steam systems.

Due to the priority given to natural gas by the governments, considering the environment as the main factor, the consumption of natural gas is increased compared to other fuels, which fostered the demand for natural gas in commercial boilers. In addition, natural gas is 90% more efficient, eco-friendly, and economical, which acts as the main driving factor for natural gas in the commercial boiler market. Moreover, less disruption than other fuel and instant boiling system features is the main growth factor for natural gas fuel in the commercial boiler market. Furthermore, commercial structures such as hospitals, schools, hostels, complexes, and others use instant boiling systems for convenience. They are the main driving factor for natural gas fuel in the commercial boiler market.

Europe accounts for the highest CAGR during the forecast period

Based on the regions, the global commercial boiler market has been segmented across North America, Asia-Pacific, Europe, South America, and the Middle East & Africa. Globally, Europe is expected to grow at the fastest rate with a CAGR of 6.1% during the forecast period. The European commercial boiler market is estimated to witness significant growth during the forecast period. Most building structures, such as educational institutions and healthcare facilities in the UK, depending on heating systems to supply heat at low pressure. In these settings, commercial boiler units are installed with a centralized plant to meet the heating demand in extremely cold weather.

Retail and the healthcare sectors are expected to contribute significantly to the commercial boiler business in the UK. There is a substantial need to replace traditional boilers with new commercial boilers in these industries, which will provide attractive growth opportunities for the sector. Furthermore, increased commercial infrastructure development expenditures could increase product demand over the projection period. The market for commercial boilers in the UK is projected to be driven by a rising preference for environment-friendly energy products, in line with legislation aimed at reducing carbon emissions.

Key Market Players

The commercial boiler market is consolidated in nature with few players such as A.O. Smith Corporation, Cochran Limited, Bosch Thermotechnology, Cleaver-Brooks, Parker Boiler, Slant/Fin Corporation, Superior Boiler Works, Inc., Fulton Boiler Company, Vaillant Group, and Weil-McLain holding a significant share of the market. These players have been adopting various strategies to gain higher shares and retain leading positions in the market. Product launch is the most adopted strategy by Bosch Thermotechnology, Cochran Limited, Cleaver-Brook, and Weil-McLain Corporation.

Recent Developments

• In November 2020, Bosch Thermotechnology supplied a new “Hydrogen ready” UT-L for the Wunsiedel Energy Park in the fichtel mountains in Germany. This boiler is 100% hydrogen and produces carbon-neutral thermal energy. This product launch will grab the government's attention and increase their building and energy technology segment.
• In June 2018, A.O. Smith Corporation partnered with ENERGY-STAR to launch a new contractor locator tool to connect A.O. Smith installers with consumers interested in energy-efficient heat pump water heaters. This partnership will enhance the heating boilers and upgrade them into energy-efficient boilers.
• In August 2019, A.O. Smith Corporation acquired Water-Right, Inc., a Wisconsin-based water treatment company. The acquisition includes all Water-Right subsidiaries, real estate, and sister company Minera-Right, Inc.
• In October 2018, A.O. Smith Corporation opened its new research & development lab named Lloyd R. Smith Corporate Technology Center, located adjacent to the companies headquarter in Milwaukee. This R&D center will lead to business expansion of commercial boilers in terms of innovation, emerging technologies, and designing state-of-the-art water technology solutions such as boiler-based water heater tanks.

Key Issues Addressed

• What is the market size by various segmentation of the commercial boiler by region and its respective countries?
• What are the customer buying behavior, key takeaways, and Porter's 5 forces of the commercial boiler market?
• What are the key opportunities and trends for manufacturers involved in the commercial boiler supply chain?
• What are the fundamental dynamics (drivers, restraints, opportunities, and challenges) of the market?
• What and how regulations, schemes, patents, and policies are impacting the growth of the market?
• What are the upcoming technological solutions influencing market trends? How will existing companies adapt to the new change in technology?
• The market player positioning, top winning strategies by years, company product developments, and launches will be?
• How has COVID-19 impacted the demand and sales of commercial boilers in the global market? Also, the expected BPS drop or rise count of the market and market predicted recovery period.
• Detailed analysis of the competitors and their latest launch, and what are the prominent startups introduced in the target market? Also, detailed company profiling of 25+ leading and prominent companies in the market.