How much does a tankless water heater cost?
How much does a tankless water heater cost?
$1,400 – $5,600 average cost with installation
Tankless water heater cost
A tankless water heater costs $1,400 to $5,600 on average with installation, depending on the fuel type. A tankless gas water heater costs $2,100 to $5,600 for the unit, labor, and required modifications. An electric on-demand water heater costs $1,400 to $3,000 installed and is cheaper and easier to install than a gas unit.
| Fuel type | Average unit price* | Total installed cost |
|---|---|---|
| Electric | $600 – $1,000 | $1,400 – $3,000 |
| Propane | $1,000 – $2,000 | $1,600 – $4,500 |
| Natural gas | $1,500 – $2,600 | $2,100 – $5,600 |
*Unit prices do not include installation.
Gas tankless water heater
Propane or natural gas tankless water heaters cost $1,000 to $2,600 for the unit alone or $1,600 to $5,600 total with installation. They provide an endless supply of hot water on demand using either natural gas or propane burners to heat the water.
Natural gas and propane tankless water heaters have several advantages over electric units, including:
Higher maximum flow rate, making them better for larger homes
Better performance in cold climates
More energy efficient for lower utility bills
If you decide a gas tankless water heater is best for you, compare the advantages and disadvantages of natural gas versus propane:
| Fuel source | Pros | Cons |
|---|---|---|
| Natural gas |
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| Propane gas |
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Energy Star certified gas tankless water heaters are eligible for a 30% federal tax credit for a maximum credit of $600.
Electric tankless water heater
Electric tankless water heaters cost $600 to $1,000 for the unit alone or $1,400 to $3,000 total installed. They rapidly heat water with electrical heating elements to provide a continuous, unlimited supply of hot water as long as the unit is properly sized for your home’s peak water flow rate.
Electric tankless heaters have several advantages and disadvantages to consider:
| Pros | Cons |
|---|---|
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Single-point vs. whole house tankless water heater
Tankless water heaters can provide hot water for a specific fixture or the entire house.
A whole-house tankless water heater costs $600 to $2,600 for the unit alone and supplies hot water to the entire house. These systems have higher flow rates to meet hot water demands from showers, sinks, and washing machines simultaneously.
A single-point water heater or point-of-service tankless water heater costs $150 to $250 per unit and is designed to provide hot water to a single faucet or appliance. These units are compact and inexpensive, with a lower flow rate suitable for meeting the hot water needs of only one application at a time.
Condensing vs. non-condensing
Both condensing and non-condensing tankless water heaters offer on-demand hot water without a bulky storage tank, but they use different technologies and have different benefits.
Condensing units are more expensive and energy efficient, using a secondary heat exchanger to capture and use the heat from the exhaust gases. They require special venting materials like PVC and drainage for condensation, which makes the installation more complex and costly.
Non-condensing units are more budget-friendly, costing about 25% less to install than a condensing unit. However, these water heaters vent hot exhaust gases without extracting any additional heat. This results in a higher environmental impact, reduced energy efficiency, and higher energy bills over time.
Tankless water heater installation cost
The cost for the tankless water heater unit itself makes up about 40% to 45% of the total project cost. Adding installation labor, supplies, and permits increases costs by another $800 to $3,000, depending on the plumbing or electrical upgrades or modifications needed for installation.
| Factor | Average cost |
|---|---|
| Unit cost | $600 – $2,600 |
| Installation labor | $600 – $2,500 |
| Additional supplies (pipes, connectors, valves, etc.) | $150 – $300 |
| Permits | $50 – $200 |
| Total installed cost | $1,400 – $5,600 |
Labor costs
The labor cost to install a tankless water heater ranges from $600 to $2,500 and typically includes 3 to 10 hours of labor by a plumber, electrician, or other professional installer. Labor estimates are based on the installer’s experience, the installation difficulty, and the gas or electrical upgrades included.
The installation may involve the following additional labor costs:
Installing a dedicated electrical circuit costs $250 to $900
Replacing the entire electrical panel costs $850 to $1,700. Upgrading to a higher-capacity panel may be necessary to support a new electric tankless water heater.
Gas line installation costs $350 to $750Â to upgrade to a larger diameter gas supply line or up to $2,000 if installing a new gas line in a home that didn't have one before.
Replacing gas exhaust vents costs $100 to $600. The old tank gas heater vents cannot be reused for a tankless water heater.
Tankless water heater cost factors
The cost to replace an outdated water heater tank with a more efficient tankless model depends on several factors, including the fuel source, unit size, labor required, and the project difficulty. Understanding these cost factors can help you set a realistic budget for the project:
Energy type: Electric models are often cheaper up front but may require some electrical upgrades such as a dedicated outlet or new electrical panel. Gas-powered units have higher installation costs due to the need for new gas lines and ventilation systems.
Condensing vs. non-condensing: Condensing units are more expensive and more efficient, while non-condensing units are cheaper to install but result in higher utility bills.
Unit size & capacity: Larger units with a higher gallon-per-minute (GPM) flow rate provide more hot water to multiple fixtures at the same time but cost more than smaller units. However, smaller units may not supply enough hot water at one time to suit your needs.
Labor costs: Labor rates vary depending on the professional you hire and the cost of living in your area. A plumber or HVAC technician costs $75 to $150 per hour on average, while an electrician charges $50 to $130 per hour, plus a service call fee.
Installation complexity: Replacing an old tankless unit with a new one of the same type or installing a tankless unit during new construction is easier and cheaper than retrofitting a tankless water heater into an existing plumbing system.
Brand & quality: High-quality brand-name heaters cost more up front but often last longer and have better warranties.
Tax credits: Certain energy-efficient home improvements, including the installation of a qualified tankless water heater, may be eligible for federal tax credits.
Old tank removal: Removing and disposing of the existing water heater costs $75 to $500, depending on if the tank has been drained and disconnected. However, some plumbers include this cost in their new water heater installation estimate.
What size tankless water heater do I need?
To find the proper size for a tankless water heater, look for a tankless heater with a flow rate capacity in gallons per minute (GPM) that will meet the number of hot water devices in your home you'll likely use at the same time.
1 – 2 fixtures (shower + sink): 3.5 GPM is the minimum suggested size.
2 – 3 fixtures (shower + sink + dishwasher): 5 GPM is recommended.
3 – 4 fixtures (multiple showers + laundry + kitchen appliances): 7 GPM or higher is needed.
Secondly, don’t forget to consider your temperature rise requirements. Temperature rise refers to the difference between the incoming cold water temperature and the desired hot water temperature. Colder climates have a greater temperature difference, requiring a more powerful heater.
To calculate the temperature rise for your home, subtract the average cold ground water temperature for your region from the desired hot water temperature. For example, if your ground water is 50°F and you want it heated to 115°F, your temperature rise requirement would be 65°F.
Tankless water heater vs. standard tank
Tankless water heaters save energy and provide unlimited hot water but are more expensive than tank models and may not suit every family's budget or heating needs. For comparison, a traditional tank water heater costs $600 to $3,100 with installation, depending on the tank size.
Consider the initial cost, the needs of your household, and the pros and cons of tankless water heaters when deciding which type is right for you.
| Factor | Tankless water heater | Tank water heater |
|---|---|---|
| Average installed cost | $1,400 – $5,600 | $600 – $3,100 |
| Annual energy cost | $220 – $480 (gas) $340 – $540 (electric) |
$250 – $420 (gas) $530 – $600 (electric) |
| Lifespan | 15 – 20 years | 8 – 12 years |
| Pros |
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| Cons |
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The cost for a tank water heater falls on the higher end for models with a larger tank size and capacity. Generally, the larger your family and hot water needs, the more you will spend.
A 40-gallon water heater tank costs $600 to $3,000 installed and can supply enough hot water for a small household of a 1 or 2 people with low hot water usage.
A 50-gallon water heater tank costs $700 to $3,100 installed and provides enough hot water for a larger family with higher hot water needs.
Solar water heaters are another energy-efficient alternative to a standard tank water heater. A solar water heater costs $3,000 to $9,000 with installation before deducting available tax incentives and rebates.
Tankless water heater FAQs
What is a tankless water heater?
A tankless water heater is a compact unit that heats water directly as it flows through the system. Unlike a conventional system that stores hot water in a tank and runs constantly to maintain the water temperature, a tankless heater provides on-demand or instantaneous hot water only when you need it for greater energy efficiency.
How does a tankless water heater work?
A tankless water heater works on demand. When you turn on a hot water tap or start the dishwasher, a built-in flow sensor detects the water flow and starts the heating process using a gas burner or high-powered electrical coils inside the heat exchanger.
Thermostats and flow sensors adjust the burner or heating element to precisely control the water heating. When the hot water tap is turned off or the demand for hot water stops, the unit stops heating the water.
Is a tankless water heater worth it?
Tankless water heaters are worth the cost if your family uses a lot of hot water, you have limited space, or you want to reduce your energy consumption. Though the initial costs are higher, you can recoup your initial investment in as little as 3 to 7 years thanks to the available rebates and energy savings.
How long does a tankless water heater last?
A tankless water heater lasts 15 to 20 years with proper maintenance, nearly doubling the lifespan of a traditional tank water heater.
How do I clean a tankless water heater?
Cleaning a tankless water heater involves removing mineral deposits and scale buildup from the heat exchanger by:
Draining the system
Flushing with a garden hose
Running a descaling solution of 50% white vinegar and 50% water solution through the unit
Flushing the unit with clean water
Getting estimates from plumbers
Follow these suggestions to find the best tankless water heater installer near you:
Look for plumbers experienced with installing tankless water heaters.
Check reviews of the plumber on HomeGuide or Google to ensure quality work.
Verify the plumber is licensed, bonded, and insured. Ask for proof.
Get a detailed written estimate outlining all costs including materials, labor, permits, etc.
Make sure the quote price includes any necessary permits and old water heater removal and disposal.
Understand the warranty coverage on labor and parts. Get warranty terms in writing.
Avoid paying 100% up front. Stick to a payment schedule tied to work milestones.
Ask about their emergency after-hours services and policies if issues arise.
Inquire if they offer any rebates, discounts, or specials on installations.
Do not feel pressured into last-minute add-ons. Stick to the initial quote.
Do a final walkthrough, test the hot water, and review the invoice before paying the balance owed.
Questions to ask a plumber about tankless water heater installation
Ask these important questions when hiring a plumber or other professional to install a tankless water heater:
What experience do you have installing tankless water heaters? How many have you installed?
How do you determine the proper tankless water heater size for my home's demand?
Should I get a whole-house or point-of-use tankless system? What are the differences?
Which fuel type–gas, electric, propane–do you recommend for a tankless water heater in my situation?
What kind of venting does my home require for a new tankless installation?
Will the existing gas line, electrical, or ductwork need modifications to accommodate the tankless system?
Which tankless water heater brands do you recommend and why?
Are there any rebates available on tankless water heaters I should know about?
Does your estimate include full removal and disposal of my old water heater system?
What permits and inspections will be required for the tankless installation?
How long does a typical tankless water heater installation take?
What is the warranty coverage and period for the tankless unit and your labor?
What is the expected lifespan of this tankless model with proper maintenance?
What kind of annual maintenance is required for optimal performance?
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.