Water Heater Replacement Cost
The average hot water heater replacement cost is $650 for a traditional whole-house water heater to be installed and around $1,950 for a tankless whole-home water heater. While your choice of water heater will cause a greater or lesser upfront cost, over time this will all average out to where you end up paying about the same over five years.
|National Average Cost||$933|
|Average Range||$650 to $1,611|
Table Of Contents
Water Heater Installation Cost
The cost to install a new water heater ranges from $400 to $900 for a 40 to 50-gallon tank, and between $1,470 and $2,510 for a tankless. In addition to the upfront cost, which carries significant weight in the decision for many, other factors also include the number of people in the house, any remodeling in the home, as well as the expense to operate the heater. This price also includes removal of the old unit when the project is complete.
Average cost with installation:
- A 40 to 50-gallon tank water heater will cost $650 installed.
- A tankless water heater will cost $1,950 installed.
Labor Cost To Install Water Heater
With the average tank water heater costing around $400, the labor cost to install would be approximately $250 to $500. For a tankless water heater, at an average of $1,000 for the new unit, you can expect labor costs to be between $450 to $1,200.
Tankless Vs. Tank Water Heater
The cost difference between a traditional water heater and a tankless water heater usually shows the tankless option for a whole house water heater being 2 to 3 times more expensive. A tank style water heater stores 40 to 50 gallons of water which stays heated to the temperature you set. A tankless system heats the water on-demand when you need it through a series of super-heated coils.
New Hot Water Heater Cost
On average, a new hot water heater costs between $260 and $610 for a tank, and between $215 and $1,615 for a tankless not including installation. Here are the average prices and pros and cons for each type of water heater:
|Tank Water Heater||$260 – $610||
|Tankless Water Heater||$215 – $1,615||
Tank Water Heater Cost
With a range between $400 and $900, the average homeowner can expect to pay $650 to have a new water heater installed professionally. Traditional storage water tank heaters, also known as "boilers," are the most common water heaters installed and are used for central heating and can even heat the water for your home using steam.
- Initial Cost – Tank heaters are cheaper to purchase and typically less expensive to install.
- Adequate Supply Capacity – With the right sized tank, there should never be a supply issue.
- Cost To Use – More expensive to use by as much as 24% to 34% because the 23 to 56 or more gallons of water must be kept hot night and day.
- Locations – A large place is required for installation, such as a closet, garage, or basement.
- Life Expectancy – Most warranties only cover water heaters for between 6 and 10 years.
- Scale In Water Tank – Standard water heaters can potentially build up scale and rust inside the tank over time.
Tankless Water Heater Cost
The average cost of a tankless water heater ranges between $1,470 and $2,510 installed, with most homeowners spending around $1,950. Unlike the traditional tank water heater which is selected based on the capacity of the tank inside it, a tankless water heater will be chosen on its ability to service the demand during peak usage times throughout the day.
- Energy Efficient – The tankless system only consumes either gas or electricity when someone needs hot water, using about 35% less energy than a tank water heater.
- Smaller Size – It will take up less space in your home, and it can be installed in multiple locations inside or outside the home.
- Unlimited Hot Water Supply – The right tankless setup can give users unlimited hot water from more than one outlet at the same time, as much as 7 gallons/minute, and they can have it immediately. However, in peak usage times, even the on-demand tankless water heaters could temporarily run out of hot water.
- Long Lasting – Usually comes with a warranty of 10–15 years and often last as many as 20 years.
- Cleaner Water – A tankless unit gives you cleaner and fresh hot water all the time.
- Safety – Comes with innovative safety-enhancing features such as water pressure and flow monitors. They automatically turn off in case of system failure.
- Return on Investment – Homes with tankless water heaters will sell for more than homes with traditional water heaters, especially if they are whole house water heaters.
- Heater Cost – Can be 2–3 times more expensive than a tank water heater.
- Higher Installation Cost – Additional vents, additional tankless units, upgrading a portion of your electric line to 240 volts, or updating the plumbing might be necessary.
- Maintenance – It is generally more expensive than maintenance on a traditional tank system. Homeowners with hard water should descale their tankless water heaters every year.
Gas Vs. Electric Water Heater
The most common types of traditional and tankless water heaters seen in residential settings are either electric or gas-powered products. When long-term costs matter, the electric tankless water heater is the most cost-effective option, but is not the most efficient fuel source. If you are only concerned about costs over the next five years, all but the electric tank heaters are similar in price.
In 2015 SmarterHouse.org from the American Council for an Energy-Efficient Economy published findings on the total cost over 13 years for many different water heaters.
|Water Heater Type||Storage Volume in Gallons||Efficiency (EF)||Cost||Yearly Energy Cost||Life in Years||Cost Over 5 Years||Cost Over 13 Years|
|Conventional Gas Tank||40||0.60||$850||$350||13||$2,600||$5,394|
|Gas tankless (No Pilot Light)||<2||0.82||$1,600||$228||13||$2,740||$4,560|
While these numbers differ slightly from today’s national average energy costs, the chart still provides close proximity to the kinds of expenses you would incur with the different types of water heaters, with the units that cost the least to install having the most significant impact to your energy bill.
Gas Water Heater Cost
Gas-powered units must be installed near a gas line or have a line run to them, and they also will require modifications to facilitate the venting of exhaust fumes and adequate air intake for combustion. It takes 60–70 minutes to heat a 100–gallon tank (recovery rate) with gas.
Gas water heaters cost more to install than an electric water heater because of the need to either tap into an existing gas line or bring a gas line to that location ($500), and ventilation must be provided to remove the combustion fumes from the property into the outside air. According to Bob Vila, the price for a plumber to replace a gas water heater is between $400 and $550, but if this is the first installation of a gas water heater in the home, the total for an installation could go as high as $1,500–$2,300.
Electric Water Heater Cost
Generally, electric heaters have a lower recovery rate than gas-powered heaters, and the smaller the tank is in a water heater, the quicker the heater will heat the water.
For an average plumber to install a traditional tank or boiler water heater, you can expect to pay between $350 and $450, or over $500 if there are structural complexities which must be navigated by the installer.
Other Types Of Water Heaters
Heat Pump Water Heater Cost
A heat pump water heater costs $1,800 to $5,000 for the materials and installation or $1,300 to $3,600 for only the unit. Heat pumps are the most energy-efficient water heater, saving $250 to $1,000 per year. However, they're noisy and require 12’ x 12’ of air space to operate efficiently.
Heat pump water heaters work up to three times more efficienty than electric units, and can be retrofited to work with an existing water heater. These units need a condensate drain or pump and doesn’t operates best in 40° to 90°F temperatures.
A desuperheater geothermal heat pump add-on costs $250 to $800, and saves up to 55% on water heating bills. This add-on is a small heat exchanger that uses extra heat from the compressor to heat the water. A desuperheater provides 50% to 60% of a home’s hot water needs.
Propane Water Heaters
On average, propane water heater installation costs around $1,000–$1,500. A propane-powered water heater is an ideal solution for remote locations where there may not even be electricity. Many manufacturers make gas water heaters that can accept either propane or natural gas.
Propane is available as both traditional tank water heaters starting at $560, and tankless products beginning around $600, other options include a single, wall-mounted, tankless, 1.5 GPM shower unit with a battery powered igniter and a showerhead for approximately $110. Propane costs an average of $350 per year to run a heater. Propane is a more efficient and cleaner fuel but comes with a higher BTU than natural gas.
Solar Water Heater Cost
A solar water heaters costs $2,000 to $5,500 on average to install. Solar-powered water heaters have no monthly operational cost because they convert the energy from the sun to power the system. Available as both:
- Active, which uses pumps to circulate water through the system or
- Passive, which has no pumps and is convection driven.
They also sometimes operate as hybrid water heating systems, working with electric or gas heaters.
What Size Water Heater Do You Need?
Homeowners will need to allow for future additions to the family, so the system isn’t found lacking some years down the road. Getting a system with higher capacity now will typically be cheaper than paying to replace it with more capacity later.
Tank Water Heater Sizes
The capacity needed for traditional tank water heaters based on the number of occupants is: 
|Number of inhabitants||Tank capacity|
|For 1 to 2 people||23 to 40 gallons|
|For 2 to 3 people||36 to 50 gallons|
|For 3 to 4 people||46 to 60 gallons|
|For 5+ people||56 to 80 gallons|
Tankless Water Heater Sizes
Tankless water heaters are not measured on the capacity of water they hold but on how many gallons of hot water they can produce per minute. According to the Energy.gov website, tankless heaters can provide between 2–5 gallons per minute, with gas-powered units producing the higher GPM.
Outside of the GPM produced by most tankless heaters, there are a few heaters that go beyond the average, heating 7.5–11 GPM. Even if your current water heater is traditional, tankless, or electric or gas-powered, you can always add a single-point electric tankless unit under a sink or in a new bathroom as demand increases in your home.
Signs You Need A New Water Heater
With a typical lifespan of 10 to 15 years, replacement is more common than water heater repair. Here are the main signs your hot water heater is going out:
- Age – The serial number on the water heater should also contain the date of manufacture, which will give you the heater’s age. Traditional tank water heaters generally last between 10 and 12 years.
- No Hot Water – If it doesn’t heat your water anymore and you have already checked the pilot light is on, and the igniter still works, and you have also tested the gas supply to the heater, it is quite likely it has finally come to the end of its useful life.
- Dirty Water – If you discover anything unexpected in the water like mud, sand, or if the water has a rusty appearance, then you can be sure something has gone seriously wrong in your heater, and it’s most likely beyond repair. Also, any unusual smell or taste to the water could indicate the disintegration of your tank. However, if you have the same issues in your cold water, then it is not your water heater at fault.
- Strange Sounds – Generally, a water heater that is failing can make a rumbling noise, because it’s designed to operate silently (except for the sound of the burners in a gas-powered unit). Loud pops or cracks indicate that the heating element is failing and needs to be replaced.
Best Water Heater Brands
Here are the best hot water heaters available from your local home improvement stores such as the Home Depot and Lowe's:
|Rheem Gas XG40T06EC36U1||Tank||$439|
|Rheem Electric XE40M06ST45U1||Tank||$344|
|Rheem Gas ECOH200DVRHLN||Tankless||$1,399|
|EcoSmart Electric ECO||Tankless||$425|
|AO Smith Gas G6-T4034NV||Tank||$449|
|AO Smith Electric E6-40R45DV||Tank||$349|
|AO Smith Gas V65IN – Energy Star||Tankless||$899|
|Stiebel Eltron TEMPRA 29 PLUS||Tankless||$799|
Energy Efficiency Cost Comparison
Heating water can account for 33% of your energy bill. The energy factor (EF) reflects a water heater's energy efficiency which is measured by factoring in the amount of hot water the heater creates per unit of fuel used per day. According to the US Department Of Energy, this includes the following:
- Recovery efficiency – how efficiently the heat from the energy source is transferred to the water
- Standby losses – the percentage of heat loss per hour from the stored water compared to the heat content of the water (water heaters with storage tanks)
- Cycling losses – the loss of heat as the water circulates through a water heater tank, or inlet and outlet pipes.
Water Heater Energy Cost Calculator
To calculate the cost to operate the heater over a year, you will need to know the heater’s EF and what your energy cost will be to operate the heater. In order of total energy costs over 13 years:
|Water Heater Type||Storage Volume in Gallons||Efficiency (EF)||Cost||Yearly Energy Cost||Life in Years||Cost Over 13 Years|
|High-Efficiency Gas Tank||40||0.65||$1,025||$323||13||$5,220|
|High-Efficiency Electric Tank||50||0.95||$820||$439||13||$6,528|
|Solar With Electric Back-Up||n/a||1.20||$4,800||$175||20||$7,072|
Some electric tankless water heaters, like products from EcoSmart, are self-regulating, and instead of always applying the most power to heat the water, they only apply the amount of power needed for the actual demand at that time, and that makes them a lot more efficient.
Be sure to choose the right number of BTUs for your unit. BTUs are the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit. The difference between the temperature of the water from the local supply coming into the home and the temperature of the water that the water heater produces is called rise. A house in a warmer climate will require a tankless system with a lower gallons-per-minute rating than a home in a more northern state because it doesn’t take as much energy or BTUs to heat the water in a southern climate.
Additional Costs and Enhancements
If your current system is outdated, there will be other costs such as replacing the ductwork or plumbing. Also, plumbers charge for removal and permits.
- Warranty – These may cover the parts for ten years. Traditional water heaters typically carry 6 to 12-year warranties, while tankless heaters last around twice as long and can come with warranties of up to 15 or more years.
- Removal – Most plumbers will charge between $250 and $500 to take the old water heater out and take it away for proper disposal.
- Permits – Permit fees and inspections generally cost between $200 to $400 nationwide.
- Replace ductwork – This could add anywhere from $200 to $500 to the project.
- Replace plumbing – This can cost between $8 and $10 per foot
- Add electrical breakers – This can be carried out by most plumbers for as little as $250.
Water Heater Expansion Tank
If the backflow which runs between the main water supply and the house is blocked, you have a closed plumbing system, and closed systems require an expansion to handle the pressure created when the water expands once it is heated. The rise in pressure needs to be released to prevent causing damage to your tank and your home.
A water heater expansion tank usually costs under $100 to add. Typically wall mounted near your system; this metal chamber can be added to your setup to protect you from expensive repairs. If a professional plumber installed a closed system, it is unlikely that an expansion chamber or tank was not installed at the same time.
Backup Hot Water System For Solar Systems
A basic solar water heater system can cost $1,000–$4,000 to install, minus possible tax credits of up to 30% off the cost. The need for a backup water heater is to add additional hot water capacity when the demand exceeds the ability of a primary solar water heater.
There are two types of backup system – the one-tank system and the two-tank system. In the one tank system, the solar storage and the backup heater are all part of the same unit, and in the two-tank system, the solar component in the system heats the water before it is fed through to the water heater. One tank is usually more efficient.
“In a single two coil tank, the solar can heat the bottom half from cold AND the top half from 120 (or the maintained temp) to 180 (or the max tank temp). In a two-tank system, the solar can't heat the boiler tank at all (unless you add a transfer pump or some other way to flip the two tanks)” (Revision Energy).
Another alternative for off-grid water heating is to use a propane-powered water heater which uses a battery-powered igniter, and they start at $110 for a simple shower unit. Single-point electric tankless units start at around $115, or gas-powered, single-point tankless can be used to supplement for about $130.
Frequently Asked Questions
What Is The Cheapest Water Heater To Buy?
An electric storage heater is the least expensive to buy, but it's going to cost you more to run than a gas-powered water heater.
What Is The Cheapest Water Heater To Install?
An electric storage water heater is the cheapest to install because there are no gas lines to run to the location, and electricity is usually pretty close to an area where you would want a heater installed, plus there are no ventilation requirements, which will also save you money.
What Is The Cheapest Water Heater To Use?
The solar water heater with a backup water heater will be the cheapest type of heater to use, with annual costs of around $175 for the backup heater operation. For those who don’t live somewhere with a lot of sunlight, the electric heat pump water heater is the second cheapest to use, but the upfront cost is twice that of a traditional gas storage heater. In third place is the gas-powered tankless water heater.
How Long Can I Expect My Water Heater To Last?
It really depends on the brand you buy, and the cost of the model purchased, but a traditional water heater will last 10 to 13 years, and a tankless water heater will generally last up to 20 years.
Do I Have To Hire A Professional To Install A Water Heater Or Can I Install It Myself?
There are several significant downsides to doing the work yourself, but the main risk is that you will need to have it inspected and permitted and it might not be up to code. If it isn’t, you’ll have to pay to have it professionally installed all over again before you can sell your house. Professional installation avoids the risks of carbon monoxide poisoning, explosions, or fire with proper venting, gas lines, and wiring.
Can I Buy An Extended Warranty For My Water Heater?
Most manufacturers will let you purchase an extended warranty to cover most of their products, except in the case of some of the cheapest products. An extended warranty can start as low as $60 for up to 5 years.
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