Global Water Electrolysis Equipment Market Booms with 51.3% CAGR | PEM & Alkaline Electrolyzers in Focus - Valuates Reports

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Apr 15, 2025, 13:18 ET

BANGALORE, India, April 15, 2025 /PRNewswire/ -- Water Electrolysis Equipment Market is Segmented by Type (PEM Electrolyzer, Alkaline Electrolyzer), by Application (Power to Gas, Chemical Industry and Refining, Metallurgy and Steel Industry, Hydrogen Refueling Station, Power Industry, Electronics and Semiconductor).

The Global Water Electrolysis Equipment Market was valued at USD 885 Million in 2023 and is anticipated to reach USD 18840 Million by 2030, witnessing a CAGR of 51.3% during the forecast period 2024-2030.

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Major Factors Driving the Growth of Water Electrolysis Equipment Market:

The water electrolysis equipment market is witnessing robust growth driven by global energy transition efforts and the accelerating adoption of hydrogen as a clean energy carrier. The rising demand across industrial sectors, coupled with strong policy backing and falling system costs, is fueling market expansion. Both PEM and alkaline technologies are gaining ground, with newer entrants exploring solid oxide alternatives. Strategic collaborations, green hydrogen mega projects, and integration with renewables are propelling innovation and commercialization. As hydrogen becomes central to decarbonization, the market is poised for sustained, long-term development across diverse applications.

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TRENDS INFLUENCING THE GROWTH OF THE WATER ELECTROLYSIS EQUIPMENT MARKET:

Proton Exchange Membrane (PEM) electrolyzers are significantly contributing to the expansion of the water electrolysis equipment market due to their high efficiency and compact design. These systems are particularly favorable for dynamic operations and intermittent power supply from renewable sources like solar and wind. Their ability to operate at high current densities and produce high-purity hydrogen with rapid startup and shutdown cycles makes them ideal for energy storage and industrial hydrogen demand. Additionally, PEM electrolyzers are witnessing growing deployment in transportation applications, particularly for fuel cell vehicles, thereby expanding the scope of green hydrogen production. As countries push toward decarbonization, PEM electrolyzers play a pivotal role in enabling clean hydrogen ecosystems.

Alkaline electrolyzers are propelling the growth of the water electrolysis equipment market owing to their technological maturity, cost-effectiveness, and large-scale hydrogen production capabilities. These systems are widely used in industries such as chemicals, fertilizers, and metallurgy where continuous hydrogen supply is essential. Their long operational lifespan and lower capital costs compared to PEM systems make them particularly attractive for industrial-scale hydrogen production. Furthermore, governments and industries are revisiting alkaline systems with modernization upgrades to enhance energy efficiency and integrate them with renewable sources. This renewed interest, combined with their historical reliability, is reinforcing alkaline electrolyzers as a cornerstone in scaling up green hydrogen infrastructure.

Power to Gas (P2G) technologies are driving demand for water electrolysis equipment as they enable the conversion of excess renewable electricity into storable hydrogen or synthetic methane. This approach supports grid stability by utilizing surplus electricity and bridging seasonal energy supply gaps. Water electrolysis acts as the fundamental enabler in P2G by splitting water into hydrogen, which can be injected into natural gas pipelines or used directly in industrial applications. As energy transition accelerates, the integration of electrolysis units into P2G systems provides utilities and grid operators with a scalable solution for energy balancing and decarbonization, thereby fueling market growth.

National hydrogen strategies and policy frameworks are catalyzing market adoption. Several countries have introduced subsidies, grants, and regulatory support to encourage investment in electrolysis technologies. These initiatives are not only reducing the financial risks associated with large-scale projects but also boosting industry confidence in long-term hydrogen infrastructure development.

Industrial decarbonization goals are prompting sectors like steel, cement, and chemicals to adopt hydrogen as a clean energy substitute. Water electrolysis provides an efficient, zero-emission method of producing hydrogen, aligning perfectly with corporate ESG targets and carbon neutrality pathways, thereby expanding demand for electrolysis systems.

The global scale-up of solar and wind power installations is creating an environment conducive to electrolysis. These renewable sources supply the required electricity for electrolysis, allowing hydrogen to be produced cleanly and sustainably. The synchronization of electrolyzers with renewable energy grids enhances energy utilization and supports the growth of the hydrogen economy.

Fuel cell vehicles and hydrogen refueling infrastructure are gaining momentum, particularly in public transport and logistics. Electrolysis systems offer a clean method for producing hydrogen fuel on-site, reducing dependence on fossil-based hydrogen and cutting emissions in the transportation sector. This surge in fuel demand propels the electrolyzer market forward.

The adoption of hybrid renewable-electrolyzer systems for energy-intensive industrial processes is becoming a key growth driver. These setups enhance energy efficiency and reduce overall emissions. The seamless integration of electrolyzers into existing industrial ecosystems provides scalability and operational flexibility, expanding their market footprint.

Advancements in manufacturing and economies of scale are driving down the costs of electrolysis units. Innovations in catalyst materials, membrane technology, and modular design are improving system efficiency and lifespan. These trends are making electrolyzers more accessible to a broader range of end users, from SMEs to utilities.

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WATER ELECTROLYSIS EQUIPMENT MARKET SHARE:

Global key players of Water Electrolysis Equipment include Nel Hydrogen, Siemens, Plug Power, PERIC Hydrogen Technologies, Hydrogen Pro, etc. The top five players hold a share of about 46%.

China is the world's largest market for Water Electrolysis Equipment and holds a share of about 37%, followed by Europe and North America, with shares about 31% and 21%, separately.

In terms of product type, Alkaline Electrolyzer is the largest segment, accounting for a share of about 55%.

In terms of application, Power to Gas is the largest field with a share of about 38 percent.

Key Companies:

Cummins
Siemens AG
Teledyne Energy Systems
EM Solution
McPhy
Nel Hydrogen
TianJin Mainland
ShaanXi HuaQin
Beijing Zhongdian
H2B2
PERIC Hydrogen Technologies
LONGi Green Energy Technology
Sungrow Power Supply
Hydrogen Pro
Plug Power
Cockerill Jingli Hydrogen
Thyssenkrupp AG
Sunfire
SANY Hydrogen
Shandong Saikesaisi Hydrogen Energy
CIMC GH2 Technology
Verde Hydrogen
SPIC Hydrogen Technology

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DISCOVER MORE INSIGHTS: EXPLORE SIMILAR REPORTS!

- Water Electrolysis Hydrogen Equipment Market was valued at USD 1801 Million in the year 2024 and is projected to reach a revised size of USD 24170 Million by 2031, growing at a CAGR of 45.6% during the forecast period.

- Water Electrolysis Market

- PEM Water Electrolysis Equipment for Hydrogen Production Market

- Electrolyzed Water Generation Equipment Market

- Seawater Electrolysis System Market

- Alkaline Water Electrolysis System Market

- Water Electrolysis Proton Exchange Membrane Market

- Electrolyzer Market was estimated to be worth USD 308 Million and is forecast to reach approximately USD 999 Million by 2030 with a CAGR of 18.6% during the forecast period 2024-2030.

- Alkaline Water Electrolysis Hydrogen Production System Market

- Electrolytic Water Hydrogen Production Equipment Market

- Catalyst for Hydrogen Production from Water Electrolysis Market was valued at USD 183 Million in the year 2024 and is projected to reach a revised size of USD 1927 Million by 2031, growing at a CAGR of 40.5% during the forecast period.

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