How Much Does a Tankless Water Heater Cost?
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Tankless water heater costs depend on a home’s heating needs, but they typically range from $1,333 to $3,721, with the national average at $2,527.
Highlights
- The typical tankless water heater installation cost is between $1,333 and $3,721, with a national average cost of $2,527.
- Cost factors for installing a tankless water heater include the system size and flow rate, fuel type, brand, labor, and accessibility.
- Tankless water heaters have many benefits, including increased space, improved safety, easy winterization, decreased energy usage, longevity, easy maintenance, and heat consistency.
- Installing a tankless water heater is not a DIY job. Homeowners will want to hire a licensed professional plumber to make sure the installation is done correctly.
For homeowners who are tired of running out of hot water, a tankless hot water heater may be the solution. According to Angi and HomeAdvisor, tankless hot water heater costs range from $1,333 to $3,721, with the national average at $2,527.
It’s not unusual for homeowners to wonder “What is a tankless water heater?” and “How does a tankless water heater work?” Unlike tank water heaters, which store and heat water that can be pumped to the home, tankless units heat water on demand. When comparing tank vs. tankless water heaters, homeowners will note that tankless water heaters (also called on-demand water heaters) have some major advantages. Tankless heaters use energy to heat water only when you open a tap or use an appliance. They can produce an endless supply of hot water, have a lower risk of leaks, take up less space, and usually have a longer lifespan.
The overall cost of installing a tankless water heater varies depending on the type, brand, and flow rate. When hiring a professional to install a tankless water heater, homeowners can expect to pay a plumber either a flat rate for labor or an hourly fee. Some plumbers charge between $45 and $200 per hour to install and connect a tankless water heater. The ultimate costs for labor usually average between $600 and $1,850.
Factors in Calculating Tankless Water Heater Cost
Calculating tankless water heater cost depends on several factors. Prices can differ from the national average due to the type of system, whether it’s a single-point or a whole-house system, the type of fuel it uses, the flow rate, system size, brand, labor, materials, permits, accessibility, and additional charges for the removal of the existing heating system.
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System Size and Flow Rate
Tankless water heater systems will have varying prices depending on their size. The size of a tankless water heater is measured in British thermal units (BTUs), which is the amount of energy the unit is able to conduct. A whole-house system will need to have enough BTUs to quickly heat the water as it is needed. The total BTU output is determined by calculating the home’s hot water demand and the BTUs per gallon.
Another important consideration is flow rate. Flow rate refers to the amount of water that can travel through a length of pipe in a certain measure of time, and this is often determined by measuring how many gallons per minute (GPM) are needed. Homeowners can calculate the GPM needed for their home by looking at what fixtures and appliances are used simultaneously and adding those numbers together to determine the maximum GPM necessary.
“Determining the size of a heater is based on how many fixtures can demand hot water at the same time,” explains Billy Bruninga, owner at Billy’s Plumbing and Rooter. “If you have 2 showers, laundry, and a kitchen sink, you will need something providing approximately 8 gallons per minute.”
The average home needs a system between 5.5 and 7.5 GPM to have a reliable source of hot water. Peak demand can be reduced by using low-flow fixtures or not using multiple appliances and fixtures simultaneously. It’s worth noting that gas and electric tankless water heaters will have different GPMs. Gas water heaters have the highest rates at an average of 5 GPM, and electric ones have around 2 GPM.
Various household features require different flow rates, and homeowners will want to account for multiple appliances or faucets being used simultaneously.
- Kitchen sink: 1.0 to 2.2 GPM
- Dishwasher: 1.5 to 3.0 GPM
- Bathroom sink: 0.5 to 2.2 GPM
- Shower: 1.5 to 3.0 GPM
- Washing machine: 2.0 to 3.0 GPM
Fuel Type
The total cost for installing a tankless water heater depends on the type of heater. A high-end gas model can cost upward of $1,500, and a single-point electric model averages around $450. Electric, natural gas, propane, or solar power can fuel tankless water heaters. Each type has its price point and advantages.
Tankless water heaters can be fueled in various ways. They can run on natural gas, propane, electricity, oil, or solar power. Some homeowners prefer to use a tankless water heater that runs on the same fuel source as the home’s heat. Some hot water heaters can use a combination of fuel sources, like an electric heater with a propane furnace. A solar-powered unit is one of the most energy-efficient water heaters and can help reduce energy bills, but it will cost more up front to install.
Brand
There are many brands to choose from when buying a tankless water heater. Some will be more budget-friendly, while others will be more expensive. It’s recommended that homeowners consider all the options for a tankless system and not just the overall cost. Warranties are another important factor—some brands may come at a relatively low price but have a warranty period of only a few years. It may be worth looking through some tankless water heater reviews to find out which brand is best.
| Brand | Average Cost (Unit Only) |
| American Standard | $990 to $1,010 |
| A.O. Smith | $580 to $1,550 |
| Atmor | $280 to $1,600 |
| Bosch | $480 to $2,350 |
| Bradford White | $1,050 to $1,700 |
| Eccotemp | $330 to $900 |
| EcoSmart | $450 to $680 |
| Marey | $480 to $750 |
| Navien | $1,000 to $2,000 |
| Noritz | $550 to $2,600 |
| Rheem | $350 to $2,000 |
| Rinnai | $500 to $2,300 |
| SioGreen | $700 to $1,000 |
| Stiebel Eltron | $300 to $1,000 |
| Takagi | $500 to $1,900 |
Labor
When plumbers install tankless water heaters, they typically charge between $45 and $200 per hour, depending on the location. It usually takes close to 3 hours to install a tankless water heater, based on water heater type, fuel source, and location. Installation typically involves opening up walls, which will add to the overall cost of the project. There may be additional fees added for repairs and paint. To install an access door for water heater repairs, homeowners can hire a carpenter. Additional costs for installing ventilation and insulation may accrue if you live in a colder climate. Fuel type can also affect cost if new fuel lines will need to be run to the heater.
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Accessibility
If the existing water heater is difficult to access, homeowners will need to be prepared to pay more for its removal and to install a new one. The prices will depend on the exact home and situation, but for units that are difficult to access, homeowners can expect to spend an additional 10 to 15 percent more. This is because it takes longer to work in a tight space, so the labor may take longer than usual.
Additional Costs and Considerations
There will be additional price factors and considerations beyond the basics when budgeting for the cost to install a tankless water heater. These can include whether the unit is a single-point or whole-house system, removal of an old water heater, permits, electrical work, insulation, gas line installation, structural modifications, whether the unit uses a power vent or a direct vent, and condensing versus non-condensing tankless water heater models.
Single-Point vs. Whole-House System
A point-of-use or single-point tankless water heater system is placed by the faucet, appliance, or shower that needs it. These are easy for a professional to install and cost between $100 to $300 each. They are efficient since the water has a short distance to travel, so less water is wasted. Single-point systems are standard in homes with multiple bathrooms and appliances. These water heater systems can be installed inside or outside the house and no more than 50 feet away from an adjoining power source using an electric heater. This requires a separate water heater for each water source. A single-point unit produces from 0.5 to 2 gallons of hot water per minute.
A whole-house system can cost between $450 and $1,500 and is typically installed near an exterior wall for proper venting for gas units. One whole-house system can provide hot water for multiple appliances and bathrooms even when they’re being used simultaneously, and homeowners can choose from a variety of sizes to suit their needs. A whole-house system produces between 5 and 10 gallons of hot water per minute. Some houses may need multiple whole-house units if several people are showering, doing laundry, and running the dishwasher simultaneously. If the home’s output exceeds the maximum 198,000 BTUs for residential water heaters, it’s recommended to go with two smaller tankless water heaters that will work in tandem. Some homeowners decide on a whole-house tankless system with a few single-point units for specific rooms. It’s a good idea to consult a tankless water heater professional for advice on which of the best tankless water heater systems is the right fit for the home.
Existing Water Heater Removal
If it’s time to replace an old water heater, the removal of the current water heating system can cost $500 or more, depending on the size of the unit, the accessibility, and the hourly rate of the contractor. When shopping around for installation estimates, homeowners will want to be sure that the price quote includes the removal and disposal of your current water heater.
Permits
Depending on the building codes in a particular area, having a tankless water heating system installed in a home may require a permit. Some areas consider a water heater replacement and a new water heating system as two different jobs. One may require a permit while the other may not. A professional plumber would know the difference and whether your installation project needs a permit. Propane-powered heating systems typically require that the installation is handled by an insured and licensed professional. Depending on the home’s location, permits may cost anywhere from $50 to $100.
Electrical Updates
An insufficient electrical supply is likely to result in the electric water heater not working as it should. If a homeowner chooses an electric tankless water heater, some electrical designs and systems may need to be updated to aid with the voltage requirements of the new water heater. An electrician is likely to charge between $50 and $100 per hour, and the project typically takes 2 hours at most. Converting from gas to electric will also require the help of an electrician.
Insulation
Some tankless water heaters cannot be installed in the same location and configuration as a tank-style heater. A plumber and electrician may have to design a new setup with additional materials like piping and insulation, which can cost $10 per foot. If the home is located in a location with a cold climate, the water pipes will need to be insulated. Plumbers typically charge $45 to $200 per hour to insulate or modify pipes.
Gas Line Installation
Tankless gas water heaters require more time and effort to install. The gas line that runs to the tankless heater needs to be fitted specially to the heater. If there isn’t an existing gas line or an offshoot where the water heater will be installed, a gas line will need to be run. Gas line installation costs can increase the project total by up to $1,000. Keep in mind that tankless gas water heaters have restrictions on where they can be installed, especially if they need to be vented to the outside.
Structural Modifications
Some homes may need structural modifications when a tankless water heater is being installed. Older homes may require a permit for building a cabinet for a tankless heater, but it’s a good idea to ask the contractor if structural considerations are included in a plumbing or electrical permit.
Vent Types
Whether they’re natural gas or propane, all tankless gas water heaters need to be vented to the outside. They can be vented in two ways: with a power vent or direct vent. A power vent draws indoor air surrounding the water heater and utilizes an electric blower or fan to vent the exhaust through a horizontal or vertical duct. A direct vent brings in air from the outside through a duct and exhausts through a different chamber or duct within the same duct. Small and enclosed spaces work well for a direct vent. Tankless water heaters can be vented via the roof or an exterior side wall.
Condensing vs. Non-Condensing
Tankless water heaters are available in condensing and non-condensing varieties. Condensing tankless units have a second heat exchanger that traps the extra heat before it exits to the venting system and uses it to heat the water. This increases the energy efficiency of the water heater to 90 percent or more. Non-condensing tankless water heaters utilize a single heat exchanger and vent the exhaust heat to the outside. These types of water heaters have an energy efficiency rate of 80 percent.
Types of Tankless Water Heaters
Tankless water heater cost can vary depending on the type of water heater that’s installed. A natural gas or propane heater will cost more in upfront costs but will save money down the road. Electric water heaters are cheaper to install, but the cost of running them over the appliance’s life depends on the local cost of electricity. A solar-powered water heater is one of the most expensive heaters to install, but they will save money in the long run by using a renewable power source.
| Tankless Water Heater Type | Average Cost (Materials and Labor) |
| Electric | $800 to $1,500 |
| Natural gas | $1,000 to $1,500 |
| Propane | $1,000 to $1,500 |
| Solar | $1,700 to $6,000 |
Electric
Electric tankless water heaters are less expensive to install than natural gas or propane heaters. They typically run between $800 and $1,500 to install, and since there is no need to vent to the outside, the installation is not as complicated. Electric heaters are easier to maintain, have high energy ratings, and perform well. A tankless electric water heater is more energy efficient than a tank-style heater.
This type of tankless water heater is very popular with homeowners. It’s environmentally friendly since it only needs electricity to run and requires minimal maintenance, but it’s rare to find an electric heater with outputs of more than 7 or 8 GPM. If a homeowner has above-average hot water usage and wants to have an electric heater, it may be recommended that they opt for a tank-style heater instead. If they are set on a tankless option, a different fuel source may work better for their household.
When converting from a natural gas heater, it may be necessary to hire an electrician on top of a plumber for $50 to $100 per hour. A professional can help homeowners pick out the best electric tankless water heater for their home, whether it is a point-of-use or whole-home model.
Natural Gas
Natural gas water heaters cost between $1,000 and $1,500 to install. Natural gas water heaters are a popular choice and work wel