How much does a tankless water heater cost?
$800 – $3,500 Average total cost to install
Tankless water heater installation costs $800 to $3,500 on average. Tankless hot water heater prices are $300 to $2,100 for a gas or electric on-demand system, plus $300 to $2,500 for installation labor. Tankless water heaters save $40 to $200 yearly by reducing energy costs by 8% to 34%.
Get free estimates from plumbers near you or view our cost estimator below.
Tankless water heater cost
Gas tankless water heaters cost $700 to $4,600, and electric on-demand water heaters cost $600 to $2,500 with installation. Converting or replacing a tank water heater with a tankless system costs $800 to $3,500 on average. Tankless prices depend on the brand, fuel source, and flow rate.
|Fuel type||Total cost to install|
|Gas||$700 – $4,600|
|Electric||$600 – $2,500|
|Propane||$700 – $4,600|
|Solar||$1,500 – $6,600|
- Tankless systems last 10 to 20 years (5 to 10 years longer than storage tank units).
- Tankless units have a 5 to 15-year warranty.
- Saves $40 to $200 yearly on energy bills compared to tank models.
- Most natural gas and propane units are eligible for a $300 federal tax credit and additional rebates.
- Installation takes 3 to 10 hours for a new install or 2 to 4 hours to replace an existing tankless unit.
Average cost of tankless water heater
The following table shows the average cost to install a tankless water heater.
|National average cost||$2,150|
|Average range||$800 to $3,500|
*Based on 135 project costs reported by HomeGuide members.
Tankless water heater installation cost
Tankless water heater installation costs $700 to $4,600 for gas systems and $600 to $2,500 for on-demand electric units. Gas tankless water heaters are more expensive, but have longer warranties and a lower energy cost of $150 to $260 yearly. Electric systems cost $300 to $540 per year to run.
|Unit price||$400 – $2,100||$300 – $1,000|
|Labor cost||$300 – $2,500||$300 – $1,500|
|Total installed cost||$700 – $4,600||$600 – $2,500|
|Annual operating cost||$150 – $260||$300 – $540|
|Warranty length||10 – 15 years||5 – 10 years|
|Maximum gallons-per-minute (GPM)||10.6||8|
|Eligible for energy tax credits||Yes*||No|
*Depending on the model purchased.
Gas tankless water heater cost
Gas tankless water heater installation costs $700 to $4,600 total on average. Natural gas systems are the most energy-efficient water heaters with annual operating costs of $150 to $260 and provide higher GPM than electric models. Most gas units are eligible for a $300 federal tax credit.
Electric tankless water heater installation cost
Electric tankless water heater installation costs $600 to $2,500 total on average. Electric systems don't require venting and are easier to repair and less expensive to install than gas units. However, they have higher annual operating costs of $300 to $540 and aren't eligible for federal tax credits.
Propane tankless water heater installation prices
Propane tankless water heater installation costs $700 to $4,600 total on average. Propane water heaters provide up to 11 GPM of hot water and connect to an on-site fuel tank. Installing a propane tank costs $1,200 to $2,400 for a 500-gallon tank.
Solar tankless water heater system
Tankless water heaters can also connect to standard solar panels. Photovoltaic solar panels cost $10,600 to $26,400 to power an entire home and tankless water heater.
Cost to install a point-of-use water heater
Installing a tankless point-of-use water heater costs $300 to $1,500 total or $150 to $700 for the unit alone. Point-of-use tankless models are smaller than whole-house units and provide endless hot water for a single room or appliance.
Tankless hot water heater prices by brand
Tankless water heater prices from well-known brands like Rheem, Rinnai, Navien, and Takagi are $350 to $2,300 on average and come with a 5 to 15-year warranty, depending on if they're gas or electric.
|Brand||Warranty (years)||Price range|
|American Standard||12||$990 –$1,010|
|AO Smith||5||$580 – $1,550|
|Atmor||7||$280 – $1,600|
|Bosch||5||$480 – $2,350|
|Bradford White||12||$1,050 – $1,700|
|EccoTemp||10||$330 – $900|
|EcoSmart||Lifetime||$450 – $680|
|Marey||5||$480 – $750|
|Navien||5 or 15||$1,000 – $2,000|
|Noritz||12||$550 – $2,600|
|Rheem||5 or 12||$350 – $2,000|
|Rinnai||10 or 12||$500 – $2,300|
|SioGreen||3||$700 – $1,000|
|Stiebel Eltron||7||$300– $1,000|
|Takagi||15||$500 – $1,900|
*Prices for unit only. Warranty length depends on the model purchased.
Rheem tankless water heater prices
Rheem tankless water heaters cost $630 to $2,000 for gas systems with a 12-year warranty or $350 to $1,100 for electric units with a 5-year warranty. Rheem is one of the largest water heater manufacturers in the U.S., and their tankless gas models meet strict Low-NOx emission standards.
Navien tankless water heater prices
Navien tankless water heaters cost $1,000 to $2,000 and come with a 15-year warranty on the heat exchanger and a 5-year warranty on other parts. All Navien models are powered by natural gas or propane, designed for whole-house use, and meet Low-NOx emission standards.
Rinnai tankless water heater cost
Rinnai tankless water heaters cost $500 to $2,300 and come with a 10- to 12-year warranty, depending on the model. Rinnai also offers an optional wi-fi module that allows homeowners to control the tankless unit via a smartphone app.
Noritz tankless water heater cost
Noritz tankless water heaters cost $550 to $2,600 and come with a 12-year warranty on the heat exchanger. Noritz has been making water heaters for over 60 years and was the first company to develop gas tankless systems featuring electronic controllers.
Tankless water heater replacement cost factors
Tankless water heater replacement costs $600 to $2,650 if replacing an old tankless unit with a new tankless model, or $800 to $3,500 if switching from a storage tank to tankless. Installing a tankless unit requires upgrading the gas supply line, replacing the existing vents, and installing a new electrical outlet.
- Gas line installation costs $350 to $750 to upgrade to a larger diameter gas supply line.
- Plumber hourly rates are $45 to $150 per hour to modify or insulate the pipes.
- Replacing the vent for gas exhaust costs $100 to $600. The vent system from a tank water heater cannot be reused for a tankless water heater and requires replacing.
- Electricians charge $40 to $100 per hour to install a new outlet or upgrade a circuit. Electric and natural gas tankless models both require a dedicated electrical outlet.
- Upgrading an electrical panel costs is $850 to $2,500 and may be necessary to support a new electric unit.
Cost of on-demand water heater unit
The following table shows the average cost of an on-demand water heater system without installation.
|Fuel type||System cost|
|Gas||$400 – $2,100|
|Electric||$300 – $1,000|
|Propane||$400 – $2,100|
|Solar||$1,000 – $6,000|
*Not including tax credits and rebates.
Labor cost to install a tankless water heater
Tankless water heater installation costs $300 to $2,500 for the labor alone, depending on the size, type, complexity, upgrades, and if the unit is gas or electric. Installing a new tankless heater requires plumbing, gas, venting, and electrical modifications.
|Fuel type||Labor cost|
|Gas||$300 – $2,500|
|Electric||$300 – $1,500|
|Propane||$300 – $2,500|
|Solar||$2,000 – $3,000|
*Not including tax credits and rebates.
Cost to convert to tankless water heater system
Converting from a storage-tank water heater to a tankless water heater costs $800 to $3,500 on average. Replacing a tank water heater with a tankless model involves retrofitting the existing gas line, venting system, and electrical wiring, and may require bringing old plumbing up to code.
|Old tank water heater removal||$75 – $500|
|New electrical outlet||$140 – $275|
|Upgrade gas supply line||$350 – $750|
|Replace gas vent system||$100 – $600|
|Permit||$25 – $250|
|Bring old plumbing up to code||$75 – $500|
|Attic or closet installation||$75 – $150|
Power vent vs. direct vent on-demand water heaters
All natural gas and propane tankless water heaters need to vent harmful exhaust through a direct vent or power vent system:
- Direct vent – draws air from outdoors through a duct and vents exhaust through a separate duct or a separate chamber within the same duct. Direct vent systems may be installed in small, enclosed spaces.
- Power vent – draws indoor air from around the water heater and uses an electric blower to vent exhaust through a vertical or horizontal duct.
Unlike storage tank water heaters, tankless models may vent through an exterior side wall or the roof.
Outdoor vs. indoor instant hot water heater systems
Tankless water heaters may be installed indoors or outdoors:
- Indoor tankless models are ideal for cold or windy climates to protect from freezing temperatures and harsh weather. Gas indoor units need venting to the home's exterior and require drainage to prevent water damage from condensation.
- Outdoor tankless models are designed to withstand wind and rain and don't require venting or drainage. Outdoor units require freeze protection and may be at risk of vandalism or theft.
Condensing vs. non-condensing tankless water heaters
Tankless water heaters come in condensing and non-condensing models:
- Non-condensing tankless models use a single heat exchanger, vent the heated exhaust outdoors, and have energy efficiency rates of 80%.
- Condensing tankless models feature a second heat exchanger that captures extra heat before it escapes into the vent system and recycles it to heat the incoming water, increasing energy efficiency to 90% or more.
Tax credits and rebates
Most gas and propane tankless water heaters are eligible for a $300 federal tax credit and additional rebates or state tax incentives. Look for ENERGY STAR tankless models with a uniform energy factor of at least 0.82. Electric tankless models don't qualify for tax credits or rebates.
Permit to install a tankless water heater
A water heater permit costs $25 to $250 and is required by most cities. An inspector verifies the water heater was installed correctly and won't create a hazard. Most plumbers pull the permit and include permit fees in their estimate.
Operating cost to run a tankless water heater
Gas tankless water heater operating costs are $16 to $22 per month or $150 to $260 per year in energy usage. Electric tankless water heater operating costs to run are $25 to $45 per month or $300 to $540 per year in energy usage.
|Factor||Monthly energy cost||Yearly cost to operate|
|Gas tankless||$16 – $22||$150 – $260|
|Electric tankless||$25 – $45||$300 – $540|
|Propane tankless||$29 – $40||$350 – $480|
|Traditional gas tank||$19 – $30||$225 – $350|
|Traditional electric tank||$37 – $48||$440 – $580|
Do tankless water heaters save money and energy?
Tankless water heaters save $40 to $200 per year on energy costs and are 8% to 34% more energy-efficient than traditional water heaters. Installing point-of-use tankless units at each water fixture see even greater gas or energy savings of 27% to 50%.
What size tankless water heater do I need?
Tankless water heaters are sized in gallons per minute (GPM) and temperature rise. Follow these steps to find the ideal tankless size for a home:
- To determine the minimum required GPM—also known as the flow rate—calculate the peak water demand by adding the flow rates of all the fixtures and appliances that will use hot water simultaneously:
|Fixture type||Flow rate (GPM)|
|Shower||1.5 – 3.0|
|Tub||3.0 – 6.0|
|Bathroom sink||0.5 – 2.2|
|Kitchen faucet||1.0 – 2.2|
|Dishwasher||1.5 – 3.0|
|Washing machine||2.0 – 3.0|
- Identify the local groundwater temperature:
- Calculate the temperature rise by subtracting the local groundwater temperature from the desired hot water temperature.
For example, if the local groundwater temperature is 62° F and the desired hot water temperature is 120° F, the required temperature rise is 58° F.
- Select a tankless water heater that can provide the minimum GPM at the required temperature rise.
Homeowners in northern climates should select a tankless unit with a GPM higher than the expected peak water demand to compensate for cold groundwater temperatures.
Tankless water heater pros and cons
Pros of tankless water heaters
Tankless water heaters produce an endless supply of hot water while reducing energy costs by 8% to 34%. Tankless units last 5 to 10 years longer than storage tank units, take up less space, and minimize the chance of water damage from leaks.
Tankless water heater cons and downside
Tankless water heaters are more expensive to install at $800 to $3,500, while tank water heater installation costs $600 to $1,800. Tankless units require vent and gas line modifications and may not provide enough hot water if multiple fixtures use hot water simultaneously.
Tankless owners may experience a "cold water sandwich," an initial rush of hot water followed by a brief burst of cold water before the hot water flow resumes.
Are tankless water heaters worth it?
A tankless water heater is worth it for homeowners who want an endless hot water supply and increased home resale value. Tankless water heaters save $40 to $200 per year on energy costs, but cost more to install. Most homeowners see a total return on their investment after 20 years.
What is a tankless water heater?
A tankless water heater provides hot water on demand, heating water only when needed rather than continuously using fuel to heat water in a storage tank. When a hot water tap is turned on, cold water travels through the heat exchanger in the tankless unit and is warmed instantly.
- Whole-house tankless systems deliver hot water to all the fixtures and appliances throughout the home.
- Point-of-use tankless models are smaller units designed to provide hot water to a single fixture or appliance.
Who installs tankless water heaters?
Plumbing services install gas and electric tankless water heaters. Home Depot and Lowe's also offer water heater installation through their network of licensed plumbers.
How long does it take to install a tankless water heater?
Tankless water heater installation takes 3 to 10 hours for a new install or 2 to 4 hours to replace an existing tankless unit. Tankless water heaters are not as easy to install as storage tank models because they require upgraded gas supply lines, new venting, and a new electrical outlet.
How long do tankless water heaters last?
Tankless water heaters last 10 to 20 years on average. Extend the water heater's lifespan by performing regular maintenance and flushing the tank once per year to remove mineral deposits that corrode the unit's internal components.
Installing a water softener system costs $800 to $2,500 and reduces mineral and sediment buildup from hard water, extending a tankless water heater's life.
How long is a tankless water heater warranty?
Tankless water heater warranties last 5 to 15 years and are only valid if the unit is professionally installed. Most warranties cover defective components for the entire warranty period but only 1 year for labor costs.
Cost to service and maintain a tankless water heater
Tankless water heater maintenance costs $75 to $350 for a routine flush or $300 to $1,300 for repairs on average. Most repairs can be avoided by flushing and descaling the unit at least once per year.
Will a tankless water heater work without electricity?
A tankless water heater does not work without electricity. Natural gas and propane tankless water heaters need electricity to operate the internal PC board, ignition, and thermostat.
Hiring a tankless water heater installer
Hire a local plumber to install or replace a tankless water heater. Before signing a contract, be sure to:
- Get at least three estimates from licensed plumbers to compare.
- Look for plumbers with experience installing tankless water heaters.
- Check out their reviews and previous work on HomeGuide, Google, and the Better Business Bureau (BBB).
- Select companies that are licensed, insured, and bonded.
- Make sure the quote includes removal of the old water heater.
- Get an itemized estimate, contract, and warranty in writing before the work begins.
- Never pay in full before the project starts. Follow a payment plan instead.
Questions to ask
- What flow rate and temperature rise should my tankless water heater be able to handle?
- Would a gas, propane, or electric tankless water heater be best for my home, and why?
- Which tankless water heater brands do you offer, and why do you recommend those brands?
- Are there any manufacturer rebates available?
- Does your estimate include removing and disposing of the old water heater? If not, how much extra will that cost?
- What additional costs should I expect?
- What permits do I need, and will you obtain them?
- How long will the installation take?
- How long is the warranty, and what does it cover?
- What kind of maintenance will my new tankless water heater require?
Get free estimates on HomeGuide from trusted plumbers:
- Thomson, James. 2020 National Plumbing & HVAC Estimator. PDF File (2020).
- HomeGuide Water Heater Survey of 172 Professionals. (2021).
Sizing a New Water Heater. (n.d.).
How Much Does it Cost to Install a Water Heater? (2021).
Equipment Tax Credits for Primary Residences. (2021).
Tankless Water Heaters - Water Heaters - The Home Depot. (2021).
Tankless Electric Water Heaters at Lowes.com. (2021).
Water Heater Installation Cost (2021). (2021).
How much does water heater installation or replacement cost? (2021).
How Much Do Plumbers Charge To Install A Water Heater? (2020).
Need a tankless water heater installation? (2021).
The Pros and Cons of Tankless Water Heaters. (2021).
Tank Vs. Tankless Water Heater - Which One is Better? (2021).
Tankless Water Heaters vs. Storage Tank Water Heaters. (2019).
Tankless Coil and Indirect Water Heaters. (n.d.).
Ferguson - Tankless Water Heaters. (2021).
Are Tankless Water Heaters Worth It? 10 Pros and Cons. (2017).
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