A tankless water heater costs an average of $2,875, but can range from $1,933 to $6,167* with installation. Read on to learn how an investment into a tankless model optimizes energy consumption and improves your living space. This comprehensive guide breaks down all factors affecting a tankless water heater installation cost. We pulled from our hundreds of hours of research into boiler replacements and other water heater systems to help you understand the costs of a new tankless water heater.
*Unless otherwise indicated, cost figures in this article are based on 2023 reports from The Home Depot, Reliant Plumbing, and HomeGuide.
The Cost of a Tankless Water Heater Installation
Depending on the model, a tankless water heater installation cost can range from $1,933 to $6,167. The national average cost for a tankless water heater installation is around $2,875. For large or specialty units, you may pay as much as $8,900 in total costs. These figures include the unit cost, permits, installation materials, labor fees, and removal of an old water heater.
Cost by Type
The fuel source is one of the most significant factors affecting a tankless water heater’s total cost. Below, we break down the common types of tankless water heaters and the average cost per unit.
- Electric ($550 to $2,000): Electric tankless water heaters promote energy efficiency by heating water when needed. Electric models are quieter and smaller than other tankless heaters and don’t require vents for installation.
- Propane ($600 to $3,500): Propane tankless water heaters offer consistent performance in areas with unreliable electricity supply. Propane is a clean-burning fuel, making these systems more environmentally friendly. They also offer flexible installation for homeowners with less space in urban and rural settings.
- Gas ($700 to $4,500): Natural gas tankless water heaters are ideal for households seeking a convenient and environmentally friendly solution for their hot water needs. Generally, they have a higher heating capacity than electric units, making them suitable for households with more hot water demands.
- Oil ($1,000 to $3,000): Oil tankless water heaters are particularly suitable for areas where propane and natural gas models aren’t readily available. This system also requires a storage tank of home heating oil to function.
- Solar ($1,500 to $6,000): Solar tankless water heaters use solar panels to heat water, which can result in substantial energy savings. This system is an excellent choice for environmentally conscious homeowners.
Factors Affecting Cost
Here are some additional cost factors that influence a water heater installation.
- Additional modifications: Installing a tankless hot water heater may require additional modifications to your home, such as changes to venting or gas lines. These modifications will increase the overall installation cost.
- Brand: Established and reputable tankless water heater brands, such as Rheem or Rinnai, often feature higher initial prices, but they provide better durability, efficiency, and customer support. Lesser-known brands might have lower up-front costs, but potential compromises in performance and reliability could lead to higher maintenance and replacement expenses later.
- Labor: The labor cost for installing a tankless water heater varies depending on the size, type of water heater, and complexity of the installation. Removing a previous conventional water heater, relocating the tankless water heater, or converting from gas to electric influence labor fees. The national average for hiring plumbers is $75 to $200 per hour, and tankless water heater installation takes around two to 10 hours.
- Location: Areas with higher labor costs and stricter building regulations lead to increased total costs. Colder climates might require additional equipment for proper insulation and freezing prevention, increasing the overall cost.
- Upgrades: Depending on your specific needs, you may require additional upgrades or accessories, such as a cabinet containing the heater or additional insulation for outdoor pipes, that will increase costs.
Benefits and Drawbacks of Tankless Water Heaters
Whether replacing your old water heater or installing a tankless one in a new home, you should know the significant benefits and drawbacks of owning one.
Benefits
➕Features a compact design that saves space
➕Minimizes energy waste from standby heat loss common in traditional tank heaters
➕Reduces the risk of corrosion and leaks
Drawbacks
➖Installation costs are often higher than traditional tank units
➖Flow rate might limit simultaneous use
➖Output temperature might decrease during colder weather
Professional vs. DIY Tankless Water Heater Installation
A professional tankless water heater installation minimizes the risk of errors, ensures optimal performance, and includes more peace of mind with warranty coverage. Trained technicians accurately assess your home’s requirements, make necessary adjustments to gas or electrical connections, and comply with local building codes.
Do-it-yourself (DIY) tankless water heater installation might appeal to individuals with moderate plumbing and electrical skills. However, it’s complex and risky, potentially leading to leaks, safety hazards, and voided warranties for your roof or foundation. DIY installers might struggle with intricate adjustments, gas line requirements, and electrical connections, so we advise homeowners to seek professional assistance with this home improvement project.
Our Recommendation
Tankless water heater installations and replacements are complex. With the investment’s high up-front cost, you’ll want expert execution backed by warranties and guarantees. We suggest you obtain at least three quotes from plumbing contractors to compare pricing and services. Professional companies can also help you obtain tax credits and rebates for tankless water heaters, such as ENERGY STAR rebates for whole-house tankless water heaters.
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Tankless Water Heater FAQ
What is the life expectancy of a tankless water heater?
A tankless water heater can last up to 20 years with proper maintenance and usage.
Is a tankless water heater worth the extra cost?
Yes, a tankless water heater can be worth the extra cost for many homeowners. Though they have higher up-front costs than traditional tank heaters, tankless units offer significant long-term benefits, such as on-demand heating, a longer life span, continuous hot water supply, reduced maintenance, and a space-saving design.
Can you run out of hot water with a tankless water heater?
Yes. Tankless water heaters can be overwhelmed by simultaneous high-demand usage. If multiple fixtures or appliances require hot water simultaneously, your home might exceed the unit’s flow rate, measured in gallons per minute (GPM), reducing water temperature. This scenario, known as a “cold-water sandwich” or “temperature fluctuation,” can temporarily decrease hot water output.
Does a tankless water heater need to be flushed every year?
Yes, tankless systems need to be flushed every year to maintain optimal performance and longevity. Over time, the unit experiences sediment buildup, affecting efficiency and potentially causing damage. Flushing helps prevent this issue by removing debris and maintaining proper water flow.