How much does a tankless water heater cost?
Ashburn, VA

How much does a tankless water heater cost?

Ashburn, VA

How much does a tankless water heater cost?

$1,400 – $5,600average cost with installation

Get free estimates for your project or view our cost guide below:

$1,400 – $5,600 average cost with installation


Get free estimates for your project or view our cost guide below:
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Tamatha Hazen
Written by
Tamatha Hazen
Edited by
Kristen Cramer
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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.

Tankless water heat cost by fuel type - chart
Tankless water heat cost by fuel type - chart
Tankless water heat cost by fuel type
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:

Natural gas vs. propane tankless water heater comparison
Fuel source Pros Cons
Natural gas
  • Lower operating cost as natural gas is cheaper than propane
  • Easier installation requiring no additional tanks or delivery services
  • Consistent supply of fuel since natural gas flows continuously through the pipes so you will never run out
  • Higher purchase price than propane or electric tankless units
  • Not all areas have access to natural gas lines.
  • Some safety concerns as leaks can occur and the fuel will not run out
  • Natural gas contributes to greenhouse gas emissions.
Propane gas
  • Propane tanks can be installed anywhere, making them ideal for rural areas without natural gas access.
  • High-efficiency propane burns hotter than natural gas, delivering more heat with less fuel.
  • Clean-burning propane produces fewer emissions than natural gas.
  • Propane can be more expensive than natural gas in some areas.
  • Propane storage tank refills require scheduling deliveries or visiting a retailer.
  • Propane storage tanks need proper placement and regular maintenance, including leak checks and refills during peak usage periods.

Gas tankless water heater installed outdoors
Gas tankless water heater installed outdoors

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:

Electric tankless water heater pros and cons
Pros Cons
  • Lower purchase price than gas tankless unit
  • No need for a gas line
  • Easy temperature adjustment
  • Compact size for small spaces
  • Requires a dedicated electrical circuit and may require other electrical upgrades
  • Limited flow capacity
  • Scaling from hard water
  • Higher operating costs
  • Limited cold weather performance

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.

Get free estimates from tankless water heater installers near you.

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.

Tankless water heater installation cost calculator
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:

A new tankless water heater installed by a professional plumber
A new tankless water heater installed by a professional plumber

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.

United States ground water temperature map
United States ground water temperature map

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 each system when deciding which one is right for you.

Tankless vs. standard tank water heater
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
  • Endless hot water on demand
  • Greater energy efficiency, only heating water when you need it
  • Compact size without the bulky storage tank
  • Constant temperature since there is no tank to lose heat
  • Lower upfront cost
  • Simple installation without major electric or plumbing adjustments
  • Easy maintenance
  • High flow rate
  • Mineral build-up is less of an issue
Cons
  • Higher upfront costs
  • More difficult to install, requiring upgrades to gas lines, electrical wiring, or venting
  • Limited flow rate, which means less hot water available at times of peak use
  • Energy inefficient, resulting in higher utility bills
  • Limited hot water available for use
  • Takes up more space
  • Tanks can rust or crack over time.

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.

Get free estimates from tankless water heater installers near you.

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

Contact an affordable plumber or specialty gas line plumber near you for a tankless water heater installation. Be sure to follow these suggestions to select the best professional for the job:

  • 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?