How Much Does Tankless Water Heater Installation Cost?

Average National Cost
? All cost data throughout this article are collected using the RS Means construction materials database.
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$1,000 - $5,500

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Updated On

April 6, 2024

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Tankless water heaters, also known as demand-type or instant water heaters, only provide hot water when you need it. As the name suggests, they don’t have a tank that constantly keeps multiple gallons of water hot. Instead, they quickly heat water when you turn the faucet on, so they can provide a constant stream of hot water (unless you turn several faucets and showers on at the same time). But if you install the right size and number of tankless water heaters, you can sidestep these pesky hot water issues altogether.

So, how do you figure out how much a tankless water heater installation will cost? We did the hard part for you, using our extensive experience and top-notch research skills to compile a helpful guide that walks you through what to expect.

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Highlights
  • Most homeowners pay around $3,000 for a tankless water heater installation.
  • Costs are highly dependent on factors specific to your scenario, including the fuel type, brand, labor costs, and installation difficulty.
  • While you can install a tankless water heater yourself, it’s usually best to leave this project to the pros.

Watch this video about tankless water heaters to learn why they can be an efficient option for your home.

How Much Does Tankless Water Heater Installation Cost?

The cost of a tankless water heater installation hinges on several factors, including the size you choose, the type of fuel your water heater uses, and the brand. On average, most homeowners pay around $3,000 for a tankless water heater installation. However, costs may dip to around $1,000 or rise as high as $5,500 based on factors specific to your installation.

LowAverageHigh
$1,000$3,000$5,500

How Much Do Tankless Water Heaters Cost Based on Size?

Tankless water heaters vary in cost depending on size (the flow rate measured in gallons per minute or GPM) and ‌if they are point-of-use or whole-home units. They can cost as low as $150 for a 1–2 GPM unit and as high as $2,000 for an 8-plus GPM unit.

Type/SizeCost
Whole home$500 to $2,000
Point of use$150 to $500
1 – 2 GPM$150 to $250
2 – 3 GPM$200 to $650
3 – 4 GPM$300 to $750
5 – 6 GPM$400 to $900
7– 8 GPM$500 to $1000
8 GPM and up$900+

How Does Tankless Water Heater Installation Cost Differ By Fuel Type?

The cost of your tankless water heater varies based on the type of fuel powering it. The chart below reviews the national average costs for each fuel source type.

Fuel TypeCost
Electric$500 – $1,500
Natural gas$750 – $2,000
Oil$1,000 – $3,000
Propane$500 – $2,000
Solar$1,500 – $4,000

Electric

An electric tankless water heater is the most popular of the bunch, as it’s the easiest to install and maintain. Because of this, electric models tend to be one of the more affordable options, making them popular for homeowners on a budget. Electric water heaters cost between $500 and $1,000. 

These water heaters are readily available in smaller sizes, so they’re perfect for smaller homes. However, it can be tricky to find a tankless electric water heater large enough to heat water for a larger home, so they’re usually not ideal for homes with four or more bedrooms.

Watch the video below to learn more about electric water heater options:

Natural Gas

A natural gas tankless water heater is another popular option. These models are pricier overall, ratcheting up labor and installation costs as well as upfront prices. Gas units often have a larger capacity than electric units, making them an ideal choice for homeowners with larger homes. Natural gas water heaters range from $750 to $2,000.

Oil

Some tankless water heaters employ a mixture of oil and electricity to supply hot water for your home. The burner uses a mixture of oil and water, which the system exposes to an electric spark to ignite it and heat the water. Oil water heaters typically range in cost from $1,000 to $3,000.

The ignition and heating process allows these water heaters to provide impressively quick heating times. They’re also highly efficient and suitable for homes with higher water demand.

Propane

Propane tankless hot water heaters use propane to produce heat for raising the temperature of the water. Some natural gas heaters can run using propane, although a converter is often necessary to make the switch. However, there are some units designed specifically to run on propane. On average, propane water heaters cost $500 to $2,000.

These models are particularly popular in rural areas where natural gas lines aren’t readily available.

Solar

The switch to solar makes an appearance on the tankless water heater scene, providing a more eco-friendly way to heat your home’s water. These units have incredibly low operating costs since they pull power from the sun, but they’re quite pricey to install and maintain. Solar water heaters are the most expensive option, ranging from $1,500 to $4,000.

Since they require sunlight to operate, they’re best suited to sunny climates.

How Does Brand Affect Tankless Water Heater Installation Prices?

Like many products, the brand name on your new tankless water heater can dramatically impact the final costs of your project. Some brands offer more affordable products, which helps decrease the number on your final tankless water heater installation bill.

Today’s Homeowner Tips

Tankless water heaters take up less space than traditional tank units. However, some models don’t have as much capacity, so keep that in mind when searching for a tankless unit.

However, tankless water heaters from other, often more recognizable, brands feature higher price tags. Since the cost of your tankless water heater is part of the installation price, the brand plays a critical role in the total price you pay.

The chart below offers a quick overview of average costs based on the brand name.

Brand NameAverage Cost Range
A.O. Smith$600 to $1,550
Bosch$180 to $2,400
Bradford White$500 to $1,700
EcoSmart$170 to $1,600
Navien$1,000 to $2,000
Noritz$500 to $2,600
Rheem$370 to $2,000
Rinnai$500 to $2,300
Takagi$500 to $2,000
Westinghouse$350 to $2,000
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Which Factors Impact Tankless Water Heater Installation Cost Estimates?

Several factors aside from the size, fuel type and brand of your tankless water heater can impact the total on your project bill. From labor costs to home structural changes, the list of necessary expenses to complete the project can be extensive.

Labor

Labor costs for a plumber to install your water heater are a major factor contributing to the final cost of your home’s tankless water heating system. Labor costs vary by the type of fuel your tankless water heater runs on, raising or lowering the final total on your project bill.

For example, labor cost to install solar-powered tankless water heaters is usually substantially more than that of their standard electric counterparts. But no matter the water heater type, what you’ll pay for labor depends on the installation difficulty, ease of access, and hourly cost.

Water heater typeLabor costs
Electric$150 – $1,000
Natural gas$900 – $1,500
Oil$1,200 – $2,000
Propane$900 – $1,500
Solar$2,000 – $4,000

Materials

To install a tankless water heater you’ll need various materials depending on the type of water heater — for example, a gas connector kit for natural gas-powered models, which runs between $20 and $40. A termination vent kit (to vent gas exhaust from your home) usually costs between $40 and $100.

Aside from the necessary add-ons, you’ll incur additional costs for mounting brackets, fittings, valve sets, piping, insulation, and more. On average, piping and insulation cost around $10 per foot, while the other items usually cost $175 or less.

Condensing vs. Non-Condensing

Most tankless water heaters are either condensing or non-condensing. The former type offers better energy savings, as it recaptures and uses the exhaust heat in a secondary heat exchanger. However, it tends to be the pricier of the duo.

Non-condensing tankless water heaters use a single heat exchanger and are less efficient than their condensing counterparts by about 17%.

Location

Your location can play a key role in the final cost of your tankless water heater installation. For example, if you decide to switch to a tankless water heater that uses solar power in an area with high demand, you’ll likely pay more for the installation.

Additionally, your location and local living costs can drive up the cost of labor, leading to higher installation costs overall.

Structural Changes

In some cases, structural changes to your home are necessary to accommodate a new tankless system. If you need to modify your home for the new installation, the total on your bill will climb. The exact amount you’ll pay is highly variable, as it depends on the difficulty of the project and the type of renovations necessary.

Old Heater Removal

If you have an old heater that needs to go, like a tank-style water heater, you’ll incur more costs for the removal process. The accessibility and size of the system will determine how expensive this part of the project will be, but the contractor’s hourly rate may also affect it.

Most homeowners pay around $500 or more to remove an old water heater setup. Ensure the quote you receive includes the removal and disposal of the old system.

Permits

Some areas require homeowners to obtain permits before completing certain home improvement projects or replacements. In some locations, permits might be necessary to install a tankless water heater in your home. You might need permits to make necessary structural changes or build a cabinet around the heater.

If you’re unsure whether you need permits for your project, talk to your local building authority or your contractor or plumber. The cost of the permit will vary based on your location and water heater fuel type. The permit usually costs around a few hundred dollars or less.

What Are the Benefits of a Tankless Water Heater?

Tankless water heaters have a clear edge over tank-style traditional water heaters. If you’re on the fence about a tankless water heater for your home, consider the following benefits, as they may help you decide one way or the other.

Save on Energy Bills

Unlike their tank-style counterparts, tankless units are highly energy efficient, making them some of the cheapest ways to heat water for your home. Tank-style water heater systems heat and reheat water stored in the tank to keep it constantly hot and ready for use, which consumes a considerable amount of energy.

On the flip side, tankless water heaters deliver on-demand hot water to your faucets, minimizing the energy usage necessary to keep 40-plus gallons of water hot. They are often used in hydro-air heating systems and can save up to a whopping 50% in energy costs compared to a tank-style water heater.

So, if you’re looking to cut total costs and save the most on your energy bills, a tankless water heater might be the perfect fit.

Never Run Out of Hot Water

One of the key benefits of a tankless water heater is its never-ending hot water supply. As long as there’s cold water flowing into it, you’ll have hot water in mere minutes. Tankless water heaters produce hot water on demand, ensuring you always have water when you need it.

In contrast, a tank-style water heater can run out of hot water, especially if multiple people shower at once or you have multiple hot-water-using appliances running. This can become a nuisance, especially when you’re hoping for a toasty bath or have guests over.

Take Advantage of Tax Credits

The efficiency of tankless water heaters makes them eligible for various tax credits. Since they conserve water and save energy due to their unique tankless design, the government will give you a credit to use toward your next tax return.

While this won’t save you money upfront, it can cut costs and minimize what you owe during the next tax season.

Save Space in Your Utility Room

Tank water heaters are large, often consuming a considerable chunk of space in your garage or utility room. The bigger the house, the larger the water heater. By switching to a tankless water heater, you can use the space left by your tank-style water heater for something else. This makes them particularly sought out for smaller and mobile homes.

Store your oodles of holiday decor in that spot, or use it for overflow linens and bedding that seem to consume so much space. What you do with that space is up to you, but if you’re already short on room, scrapping the tank-style water heater can be beneficial on multiple fronts.

Go Longer Between Replacements

Tankless water heaters can last considerably longer than their tank-style counterparts. In some cases, they can last as much as two times longer. This translates to more savings over time, as you won’t need to replace the system as frequently.

Since water heaters, with or without a tank, are expensive, this is a notable perk.

Professional vs. DIY Tankless Water Heater Installation

Some home projects are DIY-friendly, allowing you to save on labor costs by doing the work yourself. While you can DIY a tankless water heater installation with the proper knowledge and experience, it’s usually best to leave this project to the professionals.

Doing Tankless Water Heater Installation Yourself

Installing a tankless water heater by yourself is doable, but you’ll need to know the ins and outs of this type of project. If you’re an avid DIYer with ample experience installing similar systems, this project will likely be a breeze for you.

However, it’s generally best to leave this project to the professionals if you don’t have experience with tankless water heater installations. These projects can be dangerous if done improperly, potentially causing explosions or releasing carbon monoxide into the air.

So, while it’s possible to DIY the installation, it’s best to have a professional do it for you.

Hiring a Professional for Tankless Water Heater Installation

Going the professional route for tankless water heater installations is usually the best choice. This way, you can rest assured knowing the unit was installed to code and that it should function beautifully for years to come.

Plus, you usually get the most out of your water heater warranty when you have a professional install the system. In some cases, DIYing the installation voids your warranty, leaving you without coverage.

Here’s how to pick a professional to handle your tankless water heater installation:

  1. Research options in your area: Do a quick internet search to find local experts near you.
  2. Ask neighbors, family, and friends: Ask trusted individuals in your life about their installer recommendations and add those options to your pool of choices.
  3. Obtain quotes: Get quotes from a few highly-rated providers in your area.
  4. Compare your options: Use the quotes you get to compare your options to find the right fit for you.
  5. Pick a provider: Select the best provider for your needs and let them know you want to move forward and schedule an installation date.
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So, Is Tankless Water Heater Installation Worth It?

A tankless water heater can be an excellent addition to many homes. It provides on-demand hot water, effortlessly meeting most demands. It saves you money in replacement costs due to less frequent replacement requirements and more in energy savings each month on your utility bill.

However, while a tankless water heater might be perfect for some homes, it might not be the best for everyone. Ultimately, it hinges on your individual needs and expectations, so use those factors to determine the best path for you.

If you decide to go with a tankless water heater, you can expect to pay around $3,000 for installation, although you might pay as much as $5,500 or as little as less than $1,000.

FAQs About Tankless Water Heater Installation

What is the downside of a tankless water heater?

While tankless water heaters have abundant benefits, there are a couple of drawbacks to consider. For example, you’ll pay considerably more upfront than you would for a tank-style water heater. On top of that, whole-house tankless water heaters may not be able to keep up with aggressive hot water demands (more than a few people showering and multiple hot-water-using appliances running).


Can you install a tankless water heater yourself?

While you can install a tankless water heater yourself, it can be dangerous, so it’s best to leave this project to the professionals. Plus, you risk voiding your warranty with a DIY installation, so going the professional route is best.


How much does tankless water heater installation cost?

On average, installing a tankless water heater costs about $3,000. However, it can cost less than $1,000 or more than $5,000 based on factors specific to your installation, including the project’s difficulty and labor costs.


Is it worth the cost to install a tankless water heater?

The cost of a tankless water heater can be entirely worth it for many homeowners, especially those who are dissatisfied with the performance of their tank-style water heaters. However, the answer to this question ultimately hinges on your individual needs.


Editorial Contributors
avatar for Jonathon Jachura

Jonathon Jachura

Contributor

Jonathon Jachura is a two-time homeowner with hands-on experience with HVAC, gutters, plumbing, lawn care, pest control, and other aspects of owning a home. He is passionate about home maintenance and finding the best services. His main goal is to educate others with crisp, concise descriptions that any homeowner can use. Jon uses his strong technical background to create engaging, easy-to-read, and informative guides. He does most of his home and lawn projects himself but hires professional companies for the “big things.” He knows what goes into finding the best service providers and contractors. Jon studied mechanical engineering at Purdue University in Indiana and worked in the HVAC industry for 12 years. Between his various home improvement projects, he enjoys the outdoors, a good cup of coffee, and spending time with his family.

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Lora Novak

Senior Editor

Lora Novak meticulously proofreads and edits all commercial content for Today’s Homeowner to guarantee that it contains the most up-to-date information. Lora brings over 12 years of writing, editing, and digital marketing expertise. She’s worked on thousands of articles related to heating, air conditioning, ventilation, roofing, plumbing, lawn/garden, pest control, insurance, and other general homeownership topics.

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