Tankless water heaters cost $950 – $3,800 for gas types, while electric on-demand water heaters cost $850 – $2,300. Professional installation will cost $1,200 – $3,200 depending on the fuel source and job complexity.
As an experienced licensed home improvement contractor, I know first hand what it should cost for various levels — from Basic, Better, and of course the best.
Use our helpful tankless water heater cost calculator to get a ballpark price near you.
Quick Navigation [show]
- Tankless Water Heater Prices By Brand:
- Tankless Water Heater Replacement Cost Factors & Considerations
- Annual Operating Cost To Run a Tankless Water Heater
- Are whole house or single point water heaters better and what’s the difference?
- How to choose the Right Tankless Water Heater?
- Benefits Of a Tankless Water Heater vs Standard Tank System
- Tankless Hot Water System - Pricing and Installation Cost Checklist
| Tankless Water Heater System Costs | Zip Code | Units | |
|---|---|---|---|
| Basic | Better | Best | |
| Material Prices | $350.00 – $645.00 | $757.00 – $965.00 | $1200.00 – $3500.00 |
| Installation Cost | $500.00 – $650.00 | $800.00 – $1200.00 | $1500.00 – $1800.00 |
| Total | $850.00 – $1295.00 | $1557.00 – $2165.00 | $2700.00 – $5300.00 |
| Total Average Cost per Units | $1072.50 | $1861.00 | $4000.00 |
How Much Does It Cost To Install a Tankless Water Heater
The average cost to install a Tankless water heater costs $1,350 – $2,800 for gas and propane systems and $950 – $1,600 for electric tankless setups. The complexity of the job will be the deciding factor.
Tankless Water Heater Cost
| Type | Average Unit Cost |
|---|---|
| Electric | $850 – $2,300 |
| Gas | $950 – $3,900 |
| Propane | $950 – $3,900 |
- A new installation of a tankless unit will take 4 to 8 hours, while a replacement of an existing tankless unit will only take about 4 hours.
- These units can save you roughly $225 per year on average in comparison to standard tank water heaters.
- Homeowners can save even more money with Federal tax incentives and manufacturer rebates.
- Tankless water heater systems can outlast standard tank systems by 7-10 years on average and carry longer warranties.
| National Average | $4,350 |
| Low | $1,650 |
| Mid-range | $4,900 |
| High-end | $5,650 – $7,850 |
Gas Tankless Water Heater Cost
The average gas tankless water heater installation cost $950 – $3,900 for an energy-efficient natural gas set-up with an annual ownership cost ranging from $185 – $270 to run. Gas models are often eligible for a $300 federal tax credit. If your looking for a higher GPM than electric models, gas tankless water heaters may be the best option for you.
Electric Tankless Water Heater Cost
Cheaper than gas models, the average electric tankless water heater costs $850 – $2,300. These systems are easier to install than gas, however, they cost more in the long-run in operating costs by as much as $650 and in most cases, these systems don’t qualify for tax rebates.
Propane Tankless Water Heater Cost
Similar to gas models, the average propane tankless water heater costs $850 – $2,300. The difference between gas and propane tankless water heaters is that the latter uses an on-site fuel tank instead of being connected to a local gas line utility service.
Tankless Water Heater Prices By Brand:
| Brand | Warranty |
*Unit Cost |
|---|---|---|
| Rinnai | 12 years | $950 – $1,900 |
| Rheem | 12 years | $675 – $1,700 |
| AO Smith | 5 years | $650 – $1,900 |
| EcoSmart | Lifetime | $750 – $2,400 |
| Takagi | 15 years | $700 – $6,700 |
| Bradford White | 12 years | $650 – $2,300 |
Rinnai Tankless Water Heater Cost
The starting price for a Rinnai tankless water heater cost $950 – $3,300 depending on the choice of model. This system comes with Wifi capability that can be controlled remotely by a smartphone app and offers a generous 12-year warranty.
We own the Rinnai RUC80 Ultra-efficient gas tankless water heater for over 14 years and love how this system operates smoothly at peak demands.
Rheem Tankless Water Heater Cost
The price range of a Rheem tankless water heater cost $850 – $2,300 for a gas-fueled unit and carries a 12-year warranty. Their electric tankless model will cost $550 – $1,300 and comes with a 5-year warranty.
What sets Rheem tankless water heaters apart from other brands is the exclusive self-cleaning feature on all models that helps extend the life of the unit by keeping it free of mineral buildup.
Rheem is one of the most popular tankless water heater brands in the United States.
When deciding if a Rheem tankless water heater is the right fit for your home, it’s important to consider the cost of installation and maintenance as well. While Rheem tankless water heaters are some of the most expensive on the market, their quality and features make them worth the investment.
If you are looking for an environmentally friendly option, Rheem also offers a line of tankless water heaters that meet strict Low-NOx emission standards.
A.O Smith Tankless Water Heater Cost
The price range of a A.O Smith tankless water heater cost $950 – $2,400 for a gas-fueled unit and carries a 15-year limited warranty. Their electric tankless model will cost $575 – $1,400 and comes with a 5-year limited warranty. If you choose their propane model, the price tag will be $950 – $2,200 and it has a 10-year limited warranty.
A.O Smith is one of the leading brands in tankless water heaters and is a great choice for those looking for quality and durability. They offer a wide range of models to suit any budget and their products come with some of the longest warranties in the business.
Tankless Water Heater Replacement Cost Factors & Considerations
With any type of home improvement project, there will be unforeseen obstacles and that’s why it’s best to hire a reputable HVAC or plumbing company. With that said, the average tankless water heater replacement cost $2,300 – $5,900.
| Tankless Water Heater Service Type | Labor Cost |
|---|---|
| New Tankless Unit | $850 – $3,900 |
| Permit & Fees | $40 – $100 |
| Electrician | $75 – $150 per hour |
| Removal of old system | $300 – $600 |
| Upgrading Ventilation | $550 – $900 |
| Updating plumbing for code compliance | $350 – $800 |
| Relocating water tank heating system | $950 – $3,900 |
Compatibility
On occasion, tankless water heating units aren’t compatible with the location in which older heating models had been installed. This can require a bit of problem-solving and can cost money for extra materials such as pipes and insulation, both of which sell for about $12 per foot. Any reputable contractor should be able to spot this upon estimate.
Configuration
Certain electrical systems will need to be updated in order to work with the new tankless water heater. This isn’t always required but is a potential cost that should be included in the cost of materials for the updates, including the price of hiring an electrician. Expect electricians to charge an hourly-rate of $75 – $150 per hour + materials.
Existing System Removal and Disposal
In order to install a new heating system, you must first have the old system removed and disposed of. This can cost up to $300-$600 depending on how difficult the existing system is to remove. Generally, this is a relative quick process of disconnecting the electrical, draining the tank and cutting the existing plumbing lines.
Permits
Depending on the local laws in your area, a permit could be required to install a water heater. The permit fee’s normally run $10-$25 per thousand of the total job cost. For example, if your total project costs $4,000 – you should expect your permit fee to cost $40 – $100. If your contractor tries to bypass this in anyway, hire someone that will pull a permit as this is the cheapest insurance you can get knowing your system was properly installed and tested.
Rebates & Incentives
Many of these tankless water heaters qualify for a $300 Federal tax rebate and many of the manufactures offer some sort incentive to purchase their brand with mail-in rebates. According to EnergyStar.gov tankless water heaters can save nearly $225 per year on energy cost.
Cost To Convert to Tankless Water Heater System
The cost to convert your home’s existing water heater to a tankless system varies depending on a few factors. The type and size of your current water heater, as well as the complexity of the installation, will all play a role in the final cost. However, on average, you can expect to pay between $1,500 and $3,900 to convert to a tankless system.
While the initial investment may be higher than sticking with a traditional water heater, tankless systems are much more energy-efficient. This means that you’ll save money on your monthly energy bills, and over time, the tankless system will pay for itself. In addition, tankless water heaters have a much longer lifespan than traditional water heaters, so you can expect to get many years of use out of your new system.
Power Vent vs Direct Vent Tankless Water Heaters
If you’re considering a tankless water heater for your home, you may be wondering what the difference is between a power vent and a direct vent model. Both types of tankless water heaters have their pros and cons, so it’s important to know which one will best suit your needs before making a purchase.
- Power Vent works by drawing air from the outdoors and then venting the exhaust through a duct. This type of system is often installed in small, enclosed spaces. One advantage of a power vent over a direct vent is that it doesn’t require a separate chamber for the exhaust, which can save you space and money. However, power vents can be noisy, so if you’re looking for a quiet tankless water heater, this may not be the best option for you.
- Direct Vent also draws air from the outdoors, but it vents the exhaust through a separate chamber within the same duct. This type of system is more expensive than a power vent, but it’s also more effective at reducing noise. If you’re looking for a tankless water heater that is both quiet and efficient, a direct vent may be the best option for you.
Condensing vs. Non-Condensing Tankless Water Heaters
There are two main types of tankless water heaters on the market: condensing and non-condensing. Both have their pros and cons, so it’s important to choose the right one for your needs.
- Condensing units work by heating water as it passes through a heat exchanger. This makes them more efficient than non-condensing units, which heat the water in a tank and then pump it out. However, condensing units require a vent to get rid of the exhaust gases, so they can be more expensive to install.
- Non-condensing units don’t require a vent, so they’re less expensive to install. However, they’re not as efficient as condensing units, so you’ll use more energy to heat the same amount of water.
Annual Operating Cost To Run a Tankless Water Heater
The annual cost to run a gas tankless water heater system is roughly $227 per year in comparison to electric on-demand tankless heaters coming in at a sharp $460 per year to operate and this is why more federal tax rebates on gas-powered models vs electric.
| Tankless Water Heater Type | Monthly Cost |
Annual Operating Cost |
|---|---|---|
| Gas tankless | $19 | $227 |
| Propane tankless | $19 | $227 |
| Electric tankless | $38 | $460 |
| Standard Gas Tank | $31.50 | $380 |
| Standard Electric Tank | $46.50 | $560 |
Are whole house or single point water heaters better and what’s the difference?
Water heaters without tanks can be installed inside or outside of a building near its water use point and at a distance of no more than 50 feet away from a direct power source. It is necessary to have a tankless heater for each water source, so if you had three bathrooms and a dishwasher, you’d need to purchase and install 4 tankless units, unless each water source location were close together.
The amount of water that a tankless system can heat varies from how much a traditional heater can heat. A tankless unit can heat up to 5 gallons per minute. This fact comes into play when deciding which kind of unit to use. Most single-family homes do well with a whole house heating system, which allows multiple people to bathe, a dishwasher to run, and the sink to be used all at the same time.
If you were to use a single point system in the same single-family home, you would have to install multiple heating systems or use one system at a time.
The lifespan of water heaters is an important factor to think about when you’re deciding which type of heater to buy. Traditional water heaters typically last from 10-15 years, whereas tankless water systems can be used for up to 20.
How to choose the Right Tankless Water Heater?
Tankless water heaters don’t come labeled with gallon capacities like traditional water tanks. However, to choose which tankless water system is right for you, you need determine what your water demands are for either Gas or Electric.
Water flow rates are measured and calculated by “gallons per minute” (GPM). To understand which system is right for you, you need to figure out how many appliances/water sources you run at the same time. See the list below to help you figure GPM.
Average Water Usage for Common Household Appliances & Water sources:
- Washing machine — 1.5 to 3.0 gpm
- Dishwasher — 1.0 to 2.5 gpm
- Kitchen faucet — 3.0 to 9.0 gpm
- Bathroom faucet — 0.5 to 1.5 gpm
- Shower — 1.0 to 2.0 gpm
Installing a Tankless water heater
After you have chosen which type of system you want to use, a plumber will have to remove your old heating system and then install new gas lines or heat source access. This process may include having to open up walls or part of the ceiling, depending on where your home’s pipes run. After this is done, the new system is then set into place and installed and connected to the new gas lines.
An average plumbing company will charge $75- $125 for this service, and installation will usually take a full working day to install and properly test the system performance throughout the home; so expect the installation cost to be around $900 – $1,800. Other costs that may arise include the costs of heat and water pumps, new pipes, and costs that might be associated with permitting. With this in mind, your total cost for installation and other materials can be upwards of $1,000.
Benefits Of a Tankless Water Heater vs Standard Tank System
There are many benefits that come with owning a tankless water heater over a standard tank system. For starters, you’ll never have to worry about running out of hot water again. With a tankless system, water is heated on demand, meaning you’ll always have a steady supply of hot water. Additionally, tankless systems tend to be more energy-efficient than their standard tank counterparts, which can lead to lower energy bills each month.
Finally, tankless systems tend to have a longer lifespan than standard tank heaters, so you can rest assured knowing your investment will last for years to come. No matter what your needs are, there’s a tankless water heater out there that’s perfect for you. So, why wait? Make the switch today!
Frequently Asked Questions
How much does a tankless water heater cost?
On average, a tankless water heater costs $1,500- $3,000. If it is a gas-powered heater, it will cost roughly $430 without the cost of installation.
How do tankless water heaters function?
Tankless water heaters are always installed near where the water will be used. When it is needed, a heating element heats the cold water as it passes through, instead of keeping the water hot all the time like traditional water heaters.
Are tankless water heaters good?
A tankless water heater can heat up to 5 gallons of water per minute, which is more than enough water for most uses.
How long will a gas water heater work?
A gas water heater that is tankless will last up to 20 years.
How much water does a 20-minute shower use?
An average shower uses roughly 2.5 – 3.0 gallons per minute and amounts to 50-60 gallons of water usage. However, tankless water heaters can handle heating water at a rate of 4-8 gallons per minute.
What temperature should you set a tankless water heater?
Manufacturers recommend a temperature to be set at 120 degrees for safety and efficiency. However, in the image above, I have mine set at a 125 degrees during the winter months and I drop it down to 115-120 in the warmer months.
How much does a new hot water heater cost?
A tankless water heater that is purchased brand new will cost up to $2,000, and a whole house water heater tank costs anywhere from $600-$800. The low-end tankless model costs about $430 minus installation, while the average purchased model costs around $1,200
Tankless Hot Water System – Pricing and Installation Cost Checklist
- Expect the Tankless Hot Water System prices to fluctuate between various companies – each and every company have different operation expenses and over-head.
- Try to get prices in late Fall, early winter – you should expect aggressive pricing discounts by waiting for a contractor’s down season.
- Try to budget and additional 7-15% more on top of what our calculator gives out for Tankless Hot Water System costs.
- Visit every supply house that sell your particular brand of Tankless Hot Water System and try to negotiate a better price with each supplier – I save on average 20%.
- Tankless Hot Water System isn’t an easy task to perform and can leave you with a sore back. You might find it more cost effective to hire a Electrician contractor to perform the work for you. Electrical companies will most always get better prices on Tankless Hot Water System — saving your back and additional costs of Tankless Hot Water System, so shop around, ask your neighbors if they can recommend someone.
View Other Water Heater and Filtration Costs: From Gas, Electric, Tankless & More
- Electric
- Gas
- Water Filtration
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How much does an Electric Tankless Water Heater Cost?
Average cost of Energy Efficient Water Heater
How much does a Gas Hot Water Heater Cost?
Whats the average cost of Gas Tankless Water Heater With Installation?
Heat Pump Water Heater installation cost
High Efficiency Water Heater Cost
Cost of Tankless Hot Water System Installed
External References:
- Energy.gov — Energy Cost Calculator for Electric and Gas Water Heaters. Added July 17, 2015
- Hud Path — Volume 8 Rehab guide – Estimating HVAC/ Plumbing
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