Water heater replacement is one of the most common home improvements, and costs an average $850-1,100. Installing a tankless water heater is more expensive; you can end up spending up to $3,500.
However, price should not be your only consideration when you are looking for a new water heater. Think about your household size, water usage patterns, energy costs and fuel preferences.
Popular hot water heaters are available as traditional storage tanks or tankless devices, and they can be powered by gas, electricity or solar energy.
Lets take a look at the installation costs for different types of water heaters, as well as their pros and cons.
In this post:
Average water heater replacement cost
What is a FAIR price for a hot water heater?
Installation prices and considerations
Tank vs tankless
Gas vs electric
How to size a water heater
Splurging on an expensive hot water heater
Do you need an expansion tank
Signs of an aging or broken water heater
How much does a water heater cost?
$850 - $1270
Homeowners across the US are paying $850-2,500 to install a new water heater, including professional labor. Such a wide price range depends on the following factors:
– type of heater (tank vs. tankless)
– size/capacity (40, 50, 75 gallons)
– power type (gas, electric, solar).
In general, the most economical option is to install a gas storage tank water heater, especially if you already have the gas lines in place. This type of install costs $800-1,1000. The installation is also very quick and easy. The job can be done in under 3 hours.
Keep in mind that if you are building a new construction home, your overall water heater cost will be higher, because you also need to pay for the installation of gas lines.
When you get a price quote from a plumbing pro, it typically includes the following:
– New water heater
– All parts and materials required for the installation
– Labor (set up, install, clean up). Most plumbers charge $75-110 per hour
– All necessary permits (depending on your town, permits may cost $200 – 425)
– Removal and disposal of the old water heater (average cost $250-500)
It is very important to only hire a licensed pro, who will pull all the necessary permits. Replacing a hot water heater involves dealing with gas, electricity or both. This can be a hazard to your home and family, if the installation is done incorrectly.
If you try to save on the installation and hire a handy man to install a gas water heater or do it yourself, you run the risk of having a gas leak. Carbon monoxide is deadly, and there are av average of 400 deaths every year in the US from carbon monoxide leaks in the home.
Plumbers that come to replace or repair broken hot water heaters have to often fix the consequences of an incorrect install, rather than other issues.
Hot water heater prices
A gas storage tank hot water heater costs $600-900, but prices can be as low as $300-350.
A gas tankless water heater costs $800-1,300. High-end models are priced at $1,500-2,000+
Electric devices, both tank and tankless, are significantly cheaper than gas ones. For example an electric tankless water heater can cost as little as $200-500. An electric storage tank is $300-600.
$850 - $1270
Unreasonable pricing scams
Because most homeowners have no idea about plumbing and what this work entails, many plumbers take the liberty of charging EXTREMELY high prices for NO REASON. For example, many companies may offer to buy the hot water heater for you (they will help you select one), and then will roll their labor fees into the total cost.
As a result, many people end up paying as much as the cost of the heater itself for an easy, straight forward installation! For example, if your heater costs $700, your total charge will be $1,400, or more.
To avoid these types of companies, it is important to get estimates from 3-4 local professionals, and ask them exactly what type of work they will be performing.
It is also a good idea to conduct your own research online, ask your neighbors, etc, to see how much homeowners in your area are spending on this home improvement project.
In case you suspect that you are being overcharged, post your quoted price as well as job specs on home improvement forums. You will quickly get feedback from pros and homeowners on whether or not you are getting a good price. Keep in mind that if you live in an expensive area, your local plumbers will charge MORE! That is just the reality.
If a contractor sees that you have done your research, he will most likely give you a fair price, and will be more open to negotiations.
Factors that drive up the cost of installation
There are a number of factors that impact how much a plumber charges to install your hot water heater:
1. Type of water heater
If you want a regular gas storage tank, the job is fairly straight forward. This is especially true if you are simply replacing the device you have had before with a new model. Consequently, you should expect to pay no more than $300-450 for this work.
The price to install a tankless gas water heater starts at $1,200 because the process is more involved and time-consuming.
2. Switching from a tank to a tankless model
If you have a storage unit and want to switch to a tankless one, you should be prepared to spend a lot more. Homeowners looking to make this switch should budget $1,500-3,5000 for labor alone.
This is because in most homes the existing gas piping, meter and gas line to the meter may not be able to handle the high gas load of a tankless model.
Consequently, there will be a lot of additional labor involved in the install, such as:
– retrofitting the existing gas line
– perhaps putting in a new line
– installing a proper venting system
– possibly having additional electrical wiring done (you will need to hire an electrician)
– maybe re-routing gas and water lines, and possibly electricity, depending on the layout of your basement and ventilation
– it may not be possible to vent the gas tankless heater into the chimney and the installer will need to do a direct vent outside
3. Installing an electric tankless water heater
Similarly, if you are switching to an electric tankless device, an electrician will need to do a lot of work to rewire and expand your home’s existing system to handle the extra power usage from the heater (which is VERY high). Some of the most powerful electric tankless models can use as much as 120 amps.
So if you have a 100 amp service, you can’t use a tankless electric water heater without upgrading the electric panel to at least 200 amps. On average, this will cost an extra $1,000-1,500. However, you cost can be as high as$3,000 depending on the complexity of labor involved, such as having to open walls, etc.
4. Your location
While this may not seem fair to you as a homeowner, the reality is that contractors’ rates vary depending on where you live. In high-income suburban areas, as well as expensive cities such as San Francisco, New York, Boston, Miami, etc. a plumber will charge as much as 15-25% more for labor, compared to areas where incomes are significantly lower.
Tank vs tankless water heater
If you have been researching various water heater options, you way be wondering if its worth it to pay more for a tankless model. Perhaps a traditional hot water heater would be just as good?
Storage water hater
A storage tank is the most common and budget friendly hot water heater. It continuously heats and stores a specific amount of water (40, 50, 75, 100 gallons), in an insulated tank. The stored water is delivered via pipes, when it’s needed.
Lower-end models can cost as little as $300, but on average they run $650-850, by brands like Westinghouse. High-end tank heaters cost over $1,000, by brands like A.O.Smith.
Pros to consider:
- It will (almost) always be 2-3 times cheaper to install, compared to a tankless device. Figure average $900-1000 for a storage heater vs $2000-$3500 for an on-demand one.
- If your power goes out, or gas stops flowing, you won’t have hot water with a tankless device. However, a tank will always have a reserve of about 40-50 gallons of hot water!
- More cost efficient than a tankless water heater in the following cases:
– when you need to upgrade your electric panel to 200 amp
– move the gas unit toward an exterior wall
– re-rout gas lines for proper venting.
- Quick and easy install that takes 2-3 hours.
- Much easier, quicker and cheaper to repair than a tankless device.
- If your home runs exclusively on electricity, a water tank may be a smarter choice. This is because your home may not have enough power to support an electric tankless model, especially if you have a large household that uses a lot of water.
Tankless water heater
On demand or tankless water heaters DON’T store water. Instead, they use special heating coils to heat water when you need it. These devices can cost significantly more than tank models of the same size (although high-end water heaters cost about the same).
Prices start at around $800 for a gas heater from brands like Rheem, and can go up as high as $1,500+ for premium brands such as Noritz.
Electric tankless water heaters cost $160-500. EcoSmart, being a very popular, highly rated brand.
$850 - $1270
A typical on-demand unit is more expensive than a storage one, because it offers a number of significant advantages:
- Delivers hot water on demand, which is very convenient. You will be getting about two to three gallons of hot water per minute.
- It will save you money on electricity or gas, because you will not waste energy on keeping the water constantly hot inside the tank. According to data from Energy.gov if your household uses an average of 41 gallons or less daily, a tankless water heater will be 24–34% more energy efficient than a conventional storage tank. If your home uses around 80-86 gallons of hot water a day, a tankless model can be about 8-14% more energy efficient
- Lasts on average 20+ years. This is around 8-10 years longer than a tank water heater.
- Has easily replaceable parts, which further extends its service life.
- Avoid the standby heat losses associated with a storage tank.
- Comes with warranties of 10-12 years, compared to 5-6 years for tank models.
- Takes up very little space, thus offering you a lot more installation options, compared to large, bulky storage type water heaters. Unlike a regular hot water heater, a tankless model can even be installed outside!
- Has a much longer life span, because there is no TANK, which is the prime failure point of storage water heaters; no “tank pressure”, valves, leaks, etc.
- Many old, malfunctioning tank heaters cause flooding in the basement, which is an annoying and expensive issue to deal with, on top of repairing or replacing the water heater itself. A tankless model will not have this problem.
- Costs the same as 2 or 3 storage tank units. So if your 50 gallon tank lasts 6 years, and you replace it 3 times, its life span will be 18 years and your cost will be $3,000. Comparatively, a tankless device will last 12-18 years and your cost per year will be similar to a tank heater. So in the long run, the two types of water heaters actually cost about the same.
- You will not run out of hot water and will not have to wait for more water to heat up again, which is the case with a storage heater.
- A point-of-use tankless water heater may be an ideal choice if you live in an RV or a tiny home.
Gas vs electric water heater
An electric water heater costs significantly less than a gas one. Among tankless models, the majority cost between $200-350. A device that costs between$700-800 is considered the very top of the line, from brands like Stiebel.
By comparison, the $700 dollar range is a fairly low average for a tankless gas water heater. The vast majority of gas devices cost between $1,200-1,800.
When it comes to storage water heaters the difference in price between electric vs gas-powered models is less pronounced. The range for most electric heaters is $300-600, and you can find many gas heaters in the same price range. Still, gas tank style water heaters are more expensive overall, with many costing well over $1,500.
How to size your water heater
With tank-style models, the size of the hot water heater has a direct affect on the cost. The bigger the tank, the higher the price.
The difference between 40 vs 50 gallons is about $150-250, depending on the manufacturer. However the difference between 50 vs. 75 gallons can be as high $400-600. Tanks that hold 100 gallons are very expensive. They often cost double or even triple the price of a 50 gallon tank of the same brand.
Tips on choosing the right water heater (video):
Quickly determine the right water heater size for your house
- 1-2 people in the household = 40-50 gallons tank, depending on how long you spend in the shower
- 3-4 people in the household = 50-60 gallons tank
- 4+ people in the household = 60-75 gallons tank OR two 5 gallon tanks
It all boils down to how much hot water you use. Some people like 30-minute showers and long baths, while others are in and out in 5 minutes, and never/rarely take a bath.
I was going to get us a 40 gallon tank, because I take 3-5 minute showers. But my plumber convinced me to go with 50 gallons, and he was absolutely right! My kids take baths (we have a large jacuzzi tub), and when they do, hot water disappears!
With tankless models, efficiency is determined by the maximum temperature rise possible at a given flow rate, known as GPM. Average size tankless heaters have a GPM rating between 5-6. More powerful devices can go as high as 11-12 GPM. Roughly, every additional GPM costs about $100 extra, depending on the manufacturer.
Keep in mind that gas tankless water heaters produce a larger temperature rise per GPM than electric models. This means that if your household water usage is very high and frequent, you are better off paying more for a tankless gas model.
Note, whether you go for a storage or tankless device, its important to get the RIGHT size, based on a real calculation of your household’s water usage. This may mean spending more money upfront, but its well worth it!
If you get a heater that is too small, your family will be very uncomfortable for the next 10-12 years in all daily tasks, from taking showers to doing laundry.
Whats the best hot water heater brand?
When you browse different devices, you will quickly notice that some water heater brands cost at least double the price of others, when all else is equal.
However, high-end brands are often more expensive for the following reasons:
– they have better quality internal parts that last longer
– overall better design
– offer longer, more comprehensive warranties
Surely, you will also be paying a premium for the prestige of certain brands.
It may not be worth it to splurge thousands of dollars on a water heater by A.O Smith or Westinghouse, but it is also safer to steer clear of budget brands.
While you will save a few hundred dollars upfront, in the long run, you will spend more on repairing or replacing a device that stopped working way before the expected end of life.
Your best bet is to go for good quality brands such as Rheem, Tagaki – this is where the BEST VALUE is.
Do I need a water heater expansion tank?
This depends on whether your house runs on a closed or an open water supply system. If you have a closed system, having a water heater expansion tank is a MUST. When the water in your tank gets heated, it naturally expands, this is called “thermal expansion”. As a result, pressure builds up, and this water needs somewhere to escape.
In an open system, the water will simply flow into the city’s water supply. However, in a closed system, this water can cause your tank to burst, if it has nowhere to go. When you have this extra expansion tank, the water will temporarily go in there, and your house will be safe.
6 Signs its time to replace your water heater
There are some easy ways to tell that your water heater is beginning to show signs of trouble. These may be fixable, but often signal that its time to replace your water heater.
1. Old age: if your water heater is older than 10 years, get ready to replace it within the next few years. Or you can do it now, instead of waiting for it leak or break
2. Sudden leakage around the tank. This is a sign of serious internal damage, and you need to call a plumber right away
3. The water temperature is not as hot as it used to be, or worse yet, its cold. This is the one that makes homeowners call their local plumber right away – no one likes cold showers in the morning!
4. You hear loud crackling sounds or banging coming from the device
5. The color of the water that comes out is not clear. Often it has a rusty color
6. The hot water that comes out has an unusual smell, or an unpleasant taste
If your hot water heater is not old and you are having trouble with it, repairing it should be the first course of action. On average, water heater repairs cost $150-500 and are fairly easy to do.
However, if there is a major issue and it will cost more than $400-500 to repair the existing device, you might as well as consider replacing it.
$850 - $1270