Tankless water heaters cost more to install than comparable traditional water heaters with storage tanks. Average installation costs for a traditional water heater with a storage tank range from $600 to $1,000.

Most homeowners spend between $1,273 to $2,300 nationally.
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Choosing a new water heater is an important decision. Having hot water in your home is crucial, and few people want to live without it. But the decision is bigger than that. Your water heater consumes as much as 30% of your home's energy budget, so you want a water heater that meets your hot water demands and helps you keep your budget in check. Tankless water heaters are one way to do this. These systems heat water only when you need it, conserving space and energy. If you're considering a tankless water heater for your home, you need to know how much these systems cost. This guide details what it costs to hire a plumber to install a tankless water heater.

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National Install Tankless Water Heater Costs

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Tankless Water Heater Installation Cost

Tankless water heaters typically cost between $1,500 and $2,000 to install, and most homeowners report paying between $1,700 and $1,800 to install a unit. Installation can cost more than $4,000 if the home requires rewiring or retrofitting that includes rerouting HVAC ducts or plumbing pipe installation, modifying the existing framing or bringing systems up to current building codes.

Tankless Water Heater Price Ranges

Tankless water heater installation prices range from just over $100 to more than $4,000. These cost ranges depend on factors like regional labor and material costs, the brand and capacity of the water heater system, and permits.

• Water Heater Type & Capacity: Gas-powered tankless water heaters cost, on average, $600 more to install than those powered by electricity. Whole-house water heaters, which produce more gallons of hot water per minute, also cost more than single-point units. A central system costs between $800 and $3,000, while single-point units cost as little as $120.
• Labor Cost: Although labor costs vary regionally, rates typically run between $45 and $150 per hour. It takes most plumbers two to three hours to install a tankless water heater, so labor costs for the plumber range from $90 to $450 for the job. If the job requires the work of an electrician or a contractor, the costs increase to accommodate that work. Electricians charge between $50 and $100 per hour for labor. These numbers may go up or down for water heater repair, depending on what needs to be fixed.
• Tax Credits: Solar-powered tankless water heaters with Energy Star ratings are eligible for federal tax credits that include installation costs. Previous tax credits for other tankless water heaters authorized by The American Recovery and Reinvestment Act of 2009 expired at the end of the 2016.
• Material Costs: Job supplies, including connectors, fittings and hardware, also add to the installation costs. Expect to pay between $20 and $50 for basic installation jobs.
• Permits: Some municipalities require a permit to install a tankless water heater. As part of the permit process, a building inspector looks at the finished product to make sure it meets local building safety codes. Permit costs range from $45 to $200.

Tankless Water Heater Types & Their Costs

Tankless water heaters fall into several categories based on power source, capacity and function. Central water heaters, referred to as whole-house systems, heat the water at a central point before sending the flash-heated water to another location in the home. Point-of-use systems provide hot water at a single sink, shower or bath in the home and are installed near that spot. Central systems cost between $800 and $1,200, and point-of-use systems cost between $120 and $220.

Tankless water heaters use electricity, natural gas or propane as power sources. Electric water heaters cost between $1,100 and $1,300 to install, but the cost increases if the house requires rewiring or new outlets to accommodate the system. The cost to install a gas water heater ranges from $1,750 to $2,000, but these costs increase if the house requires modifications to vent the system.

Costs vary between brands and models of tankless water heaters. Options range from residential point-of-use models to commercial units designed to provide hot water to large buildings. Prices of these models vary depending on where you purchase them:

Manufacturers produce tankless water heaters at all price points. Models at the lower end of the price range are usually point-of-use systems, while larger whole-house water heaters cost more.

Tankless Vs. Traditional Water Heater Installation Prices

Tankless water heaters cost more to install than comparable traditional water heaters with storage tanks. Average installation costs for a traditional water heater with a storage tank range from $600 to $1,000. The cost difference is due to the additional work required to prepare the home for a tankless system because most already have the necessary hookups for a storage tank water heater.

Electric Vs. Gas Tankless Water Heater Prices

Electric tankless water heaters also cost less to install than gas units. The installation costs for electric systems range from $800 to $1,500, while installation for gas units cost between $1,000 and $1,500. Gas water heaters require venting to prevent the buildup of harmful gases inside the home. As such, a licensed plumber should complete this work. Gas water heater installation prices increase if the house doesn't have a usable gas line in place.

Tankless Water Heater Advantages

For many homeowners, the advantages of tankless water heaters make them worth the additional installation costs. Unlike traditional water heaters, which store heated water in a canister, tankless models heat water on the spot when someone needs to use it. This design reduces energy waste and potentially damaging leaks that can occur when the tank reaches the end of its life expectancy. Tankless heaters take up considerably less space than traditional systems and last up to 20 years.

Tankless Water Heater Disadvantages

This doesn't mean tankless water heaters are the right choice for everyone. Tankless units usually don't have the capacity to work under high demand. For example, they may not be able to heat enough water for simultaneous uses, meaning a homeowner can't take a shower and do laundry at the same time. These units also don't always heat water at consistent rates, leading to temperature fluctuations when the water runs. Electric-powered tankless water heaters draw high amounts of electricity, and gas units require ventilation that leads outside. Installation costs for tankless water heaters are usually higher than the costs of traditional systems, especially if the homeowner has to rewire the house for the new system.

Find A Water Heater Contractor

Your water needs are important, whether you need a way to treat and filter your water or a way to heat it. If you're ready to take the plunge and install a tankless water heater, we can help you find qualified professional plumbers in your area. Submit your information on our website today, and we'll put you in touch with people who can install your new system.

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Last updated on Feb 27, 2019

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