How Much Does It Cost to Install a Tankless Water Heater?

how much does it cost to install a tankless water heater

Ever wondered how much does it cost to install a tankless water heater? When you’re considering the addition of a tankless water heater to your home, understanding the costs involved is crucial.

Unlike traditional water heaters with tanks, tankless systems heat water on demand, providing a continuous supply of hot water and taking up less space.

Their energy efficiency can lead to potential savings on utility bills, but the initial investment is something you’ll want to plan for.

The cost to install a tankless water heater encompasses more than just the price of the unit; it includes factors like size, fuel type, and whether your home needs any modifications to accommodate the new system.

The installation expenses for tankless water heaters can vary widely, with considerations such as labor costs, materials, and any necessary permits. Equally important is deciding between a do-it-yourself installation and hiring a professional, which can impact both upfront costs and long-term performance.

Additionally, selecting the right model that fits your usage needs is vital to ensure efficiency and cost-effectiveness. With these considerations in mind, a well-informed choice can balance the upfront costs against the long-term benefits.

Key Takeaways

  • Tankless water heaters provide on-demand hot water and can be energy efficient.
  • Installation costs are influenced by labor, materials, and specific home modification needs.
  • Choosing a professional installation and the correct model will affect long-term savings and performance.

How Much Does It Cost to Install a Tankless Water Heater? Basic Considerations

When considering the installation of a tankless water heater, key factors like the unit type, energy efficiency, and flow rate will significantly influence both upfront and long-term costs.

Type of Tankless Hot Water Heater

Your choice between a gas-fired tankless water heater and an electric tankless water heater will have a substantial impact on installation complexity and expense.

Propane tankless water heaters typically require a venting system and a gas line, which can increase installation costs. Conversely, electric tankless water heaters might need upgraded electrical systems to handle the increased demand.

In addition to the choice between gas-fired and electric tankless water heaters, you’ll also need to consider whether you want a condensing or non-condensing unit.

Condensing tankless water heaters are more energy-efficient than non-condensing models because they capture and utilize heat from combustion gases that would otherwise be wasted. It contains a second heat exchanger that can add more heat to the water but also additional tankless water heater cost for installation.

This means they can have higher efficiency ratings and lower operating costs over time. However, condensing units are usually more expensive upfront and may require specialized venting systems to handle the condensation produced during operation.

On the other hand, non-condensing tankless water heaters are typically simpler and cheaper to install, but they may not be as efficient as condensing models, especially in colder climates.

Energy Efficiency Ratings

Tankless heaters come with Energy Factor (EF) ratings which measure their energy efficiency. A higher EF signifies a more efficient unit that will save you money on operating costs in the long run.

Be sure to check the EnergyGuide label for this information when comparing models.

Flow Rates and Demand

Evaluate your household’s hot water needs by considering gallons per minute (GPM) which denotes the flow rate of the heater. A higher GPM can deliver more hot water, designed to meet peak demand in your home.

It’s crucial to choose a model that aligns with your usage to ensure it operates effectively without wasting energy.

Installation Costs Breakdown

When you’re looking to install a tankless water heater, understanding the costs involved is crucial. They typically encompass the unit price, labor fees, and additional equipment required for installation.

Unit Price

The unit price for a tankless heater can range significantly depending on the size and brand you choose.

Expect prices from $2,000 to $5,000 for whole-house gas models as a retrofit. Electric water heaters are generally less expensive, though the costs will vary based on capacity and efficiency.

Labor Costs

Labor costs for the installation can vary based on location, complexity of the installation, and the rates of the local contractors. These costs can be influenced by whether additional work like gas line or vent modification is needed.

Additional Equipment

You may need to factor in the costs for additional equipment. This includes venting materials for gas heaters, upgraded gas lines, additional wiring, and possibly a new circuit breaker.

These components ensure your system adheres to local building codes and functions safely. Each of these additional items will contribute to the overall installation cost.

Factors Affecting Installation Cost

When contemplating a tankless water heater, it’s crucial to recognize that the installation expense encompasses more than just a single figure. Various factors come into play that can affect the final price you will need to pay.

Local Labor Rates

Your local area’s labor rates play a significant role in your tankless water heater’s installation cost. In regions with a higher cost of living, you can expect plumbers and installers to charge more for their services compared to areas with a lower cost of living.

Permitting Fees

Before the installation, permits may be required, and the cost can vary widely by location. Usually, urban areas have higher permitting fees due to the more complex bureaucratic processes in place, whereas rural areas might have lower fees.

Fuel Source

The type of fuel source your tankless water heater will use—whether it’s electric, natural gas, or propane—can also influence the installation cost. For instance, gas-powered units might need new venting or additional gas lines, which can add to the overall expense.

Potential Additional Expenses

When installing a tankless water heater, you may encounter additional costs beyond the unit’s purchase price. These can arise from updates to your home’s current systems to accommodate the new heater.

Electrical Upgrades

Your existing electrical system may need an upgrade to support a tankless water heater, especially if it has higher power demands. Expect costs for:

  • Heavy-duty wiring: Up to $1,500
  • Circuit breakers: Approximately $50-$150 each

Venting Requirements

Tankless gas water heaters often require special venting to expel exhaust safely. Stainless steel venting can add:

  • $50 to $100 per foot installed, depending on the complexity

Water System Adjustments

If your water system needs modifications, such as a water softener or pressure-relief valve, additional expenses could include:

  • Water softener installation: Typically around $800 to $1,000
  • Pressure-relief valves: Roughly $20 to $200, based on the type

Price Comparison with Traditional Water Heaters

When considering the cost of installing a tankless water heater, it’s crucial to compare initial investment and potential savings against traditional tank-style water heaters.

Initially, you’ll find that tankless water heaters are typically more expensive to purchase and install. Prices vary based on size and energy efficiency, but on average:

  • Tankless Water Heater: Your up-front cost can range from about $1,000 to $3,000.
  • Traditional Water Heater: A standard unit is generally between $500 and $1,500.

Despite the higher initial cost, tankless water heaters boast long-term savings in energy usage. They are designed to be:

  • Highly Efficient: Only heating water on-demand, potentially saving you up to 24% to 34% on energy costs if you consume less than 41 gallons of hot water per day, according to findings shared by

In contrast, traditional water heaters:

  • Consume More Energy: They keep a large volume of water heated at all times, leading to higher energy usage and costs.

Installation costs are another factor:

  • Tankless Systems: May incur higher installation costs due to potential upgrades in gas lines or electrical systems.
  • Traditional Systems: Installation is typically more straightforward, often resulting in lower initial labor costs.

Remember, the true cost includes not just the price of the unit, but the installation and ongoing operating expenses as well. While you’re paying more upfront for a tankless system, the energy savings over time can make it a cost-effective choice in the long run.

Cost-Saving Aspects

Exploring the potential cost savings is essential when considering the installation of a tankless water heater. Two primary factors contribute to potential savings: energy efficiency and unit longevity.

Energy Savings

Tankless water heaters are renowned for their energy efficiency. They heat water on demand, which means you’re only using energy when you need hot water.

According to research, heat pump units significantly reduce energy and costs compared to traditional water heaters. This could translate to considerable savings on your monthly utility bills.

Longevity and Maintenance

The long-term savings also extend to the lifespan and maintenance costs of tankless water heaters. Tankless water heaters typically boast a longer lifespan compared to conventional tank water heaters, potentially lasting up to 20 years.

Less frequent replacements and reduced maintenance requirements contribute to overall cost savings over the life of the unit.

Financing and Rebates

When you’re looking to install a tankless water heater, it’s important to know about the financial support available to you, which can significantly offset the initial cost.

Government incentives and manufacturer rebates are two key areas where you can save money.

Government Incentives

Governments often promote energy-efficient technologies through various incentives, making installation more affordable for you. For example, rebate programs in some regions can cover a portion of the cost for energy-saving water heaters.

Additionally, you might find low-interest loans or tax credits as part of government energy-saving initiatives. It’s best to check with local and federal agencies to see what programs you might qualify for.

Manufacturer Rebates

Many manufacturers also offer rebates on tankless water heaters as an incentive to encourage their purchase. By taking advantage of these rebates, you can reduce your out-of-pocket expenses.

Check with the manufacturer or your retailer for any current rebate offers and the details on how to apply for them. Remember to keep all necessary purchase documents and receipts, as they are often required for rebate applications.

Selecting a Reputable Installer

When you’re ready to install a tankless water heater, choosing the right installer is crucial. Your installer’s experience and reputation will greatly influence the quality and efficiency of the installation.

Step One: Ask for Referrals

  • Start by asking friends, family, and neighbors for recommendations.
  • Look for testimonials from customers who have had a similar installation done.

Step Two: Verify Credentials

  • Ensure the installer is licensed and insured.
  • Check for certifications specific to tankless water heater installation.

Step Three: Read Online Reviews

  • Websites like Angie’s List or the Better Business Bureau provide insights into an installer’s reputation.
  • Remember to read multiple reviews to get a balanced perspective.

Step Four: Compare Quotes

  • Get itemized quotes from several installers to compare costs and services.
  • Don’t automatically choose the cheapest; weigh the value of their service based on experience and feedback.

Step Five: Assess Their Professionalism

  • Note their responsiveness to your calls or emails.
  • A reputable installer will be willing to answer all your questions and provide a clear timeline for the installation process.

Final Tips:

  • Prioritize installers who offer a warranty on their work.
  • Check if they have experience with the specific brand or model of tankless water heater you are considering.

By investing time in selecting a reputable installer, you’re taking a crucial step towards ensuring that your tankless water heater will be installed efficiently and effectively.

DIY vs Professional Installation

When choosing to install a tankless water heater, you have two main options: doing it yourself (DIY) or hiring a professional. Each approach has its costs and considerations.

DIY Installation:

  • Upfront Costs: You will save on labor costs, which can be significant.
  • Skills Needed: You should have a good understanding of plumbing and electrical systems.
  • Tools: Must own or rent the necessary tools. This can increase your costs if you don’t already have them.
  • Time: Be prepared to invest your time. It could take a weekend or more to complete.
  • Risk: Mistakes can lead to leaks or inefficient operation, potentially costing you more in the long run.
Pros of DIYCons of DIY
Lower initial costRisk of mistakes
Sense of achievementTime-consuming
Learn new skillsMay void warranty

Professional Installation:

  • Labor Costs: Hiring a professional often means paying about 15% of the total project cost for labor, according to a snippet from a Google Book on DIY solar projects.
  • Expertise: Professionals have the experience to install quickly and efficiently.
  • Tools: They come with their own tools, saving you those expenses.
  • Assurance: Work is often guaranteed and less likely to void warranties.
  • Permits: They can handle any necessary permits or inspections.
Pros of ProfessionalCons of Professional
Expertise and efficiencyHigher upfront cost
Warranty protectionDependence on contractor’s schedule
Assistance with permits

Consider your skills, budget, and the value of your time when deciding between DIY and professional installation. Remember, a well-installed tankless water heater can offer long-term energy savings, regardless of who installs it.

Long-Term Considerations

When considering the installation of a tankless water heater, you’ll want to think about how it will affect your home’s value and what kind of service plans are available to you for long-term peace of mind.

Resale Value Impact

Investing in a tankless water heater might boost your home’s appeal to potential buyers. The promise of endless hot water and energy savings can be a strong selling point.

Reports suggest that homes with energy-efficient features can be more attractive in the real estate market.

Warranty and Service Plans

A strong warranty can protect your investment in a tankless water heater. Typically, these warranties last from 5 to 12 years, but it’s crucial to read the fine print to understand what’s covered.

Service plans can also contribute to the longevity of your device, so consider opting for regular maintenance to catch any issues early on.

Conclusion: Is a Tankless Water Heater Worth the Investment?

When it comes to upgrading your water heating system, the decision largely hinges on balancing the upfront costs with the potential long-term savings and benefits.

A tankless water heater, while it may have a higher initial price tag, stands out for its durability and efficiency.

  • Energy Efficiency: Tankless models heat water on demand, which means no standby energy losses associated with storage water heaters.
  • Space Saving: Since they don’t require a tank, you reclaim precious space in your home.
  • Longevity: They typically outlast traditional water heaters by several years, meaning you might not need to replace it as soon.

It’s clear that the benefits are substantial, but you need to consider your household’s hot water usage. If your demand is high, the savings on your energy bill can be significant over time, helping to offset the initial investment.

Furthermore, tax incentives or rebates may be available, making it a more attractive investment.

In essence, if you’re in a home you plan to stay in for a while, a tankless water heater can be a wise investment. It’s all about examining your own needs and deciding if the long-term savings align with your lifestyle and budget.

When looking for a new tankless water heater, your choices can vary widely based on your budget and needs. Here’s a concise list to help guide your decision:

  • Budget-friendly Option: For those keeping an eye on expenses, consider a model like the EcoSmart ECO 11. This electric tankless water heater is compact and is ideal for small apartments or point-of-use applications. One drawback, however, is that it may not be suitable for colder climates or simultaneous, multiple uses.
  • Mid-range Pick: The Rheem RTEX-24 hits a sweet spot in terms of price and performance. It’s known for consistent hot water flow and energy efficiency. It’s a bit more robust than the budget options and can handle a moderate demand for hot water. But installation can be tricky, and you might want to hire a professional.
  • High-end Choice: If you’re ready to invest in top-tier quality, the Stiebel Eltron Tempra 24 Plus offers superior performance and self-modulating technology for excellent energy savings. It’s capable of satisfying high hot water demand, even in colder regions. The cost is steeper upfront, and professional installation is a must to ensure safety and warranty coverage.

Remember to examine the warranty, availability of customer service, and read reviews regarding reliability before committing to a purchase. This way, you’ll find a tankless unit that aligns with your expectations and household needs.


  • Edmund Yeo

    🌱 I'm passionate about sustainable living and renewable energy, and I'm thrilled to share my journey towards a greener, brighter future with you. Join me as I explore the latest innovations, eco-friendly lifestyle tips, and inspiring stories from the forefront of the green energy revolution. Note: This website uses affiliate links which may earn a commission for purchases made at no additional cost to you.

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