Switching to a tankless water heater is becoming increasingly popular among homeowners looking to save space, reduce energy bills, and enjoy endless hot water on demand. Unlike traditional water heaters with large storage tanks, tankless models heat water only when needed, making them more energy-efficient and compact.
If you’re wondering how much is a tankless water heater, the answer depends on several factors, including the type of unit, its size, and the complexity of installation. In this guide, we’ll break down the costs of tankless water heaters, explain installation expenses, and help you determine if a tankless system is the right choice for your home.
Average Cost of a Tankless Water Heater
The price of a tankless water heater varies widely depending on fuel type, capacity, and whether it’s installed for a single faucet or the whole house. On average:
| Type | Unit Cost | Full Installation |
|---|---|---|
| Electric Tankless | $250 – $700 | $500 – $1,200 |
| Gas Tankless | $500 – $1,500 | $1,000 – $3,000 |
| Point-of-Use | $150 – $400 | $300 – $700 |
| Whole-House | $500 – $2,000 | $1,000 – $3,500 |
Keep in mind that labor, permits, and any upgrades to plumbing or gas lines can increase the total cost.
Tankless Water Heater Price by Type
Electric Tankless Water Heater Cost
Electric tankless units are usually more affordable upfront. They are ideal for small homes or apartments with lower hot water demand. A typical unit ranges from $250 to $700. Installation is generally simpler, but higher electricity usage may slightly increase monthly bills.
Gas Tankless Water Heater Cost
Gas tankless water heaters have a higher initial cost, ranging from $500 to $1,500 for the unit alone. However, they are better suited for large families or homes with multiple bathrooms, as they provide higher flow rates and more consistent hot water. Installation is more complex, often requiring venting, gas line upgrades, and permits.
Installation Cost of a Tankless Water Heater
Installing a tankless water heater involves more than just placing the unit. Average installation costs range from $500 to $3,000 depending on complexity. Key factors include:
- Labor cost: $50 – $150 per hour depending on your location
- Electrical upgrades: Required for electric units with high amperage
- Gas line upgrades: Necessary for larger gas units
- Venting requirements: Gas units often need new venting
- Permits & inspections: Local building codes may require approval
Professional installation ensures safety and efficiency, so DIY installation is not recommended.
What Factors Affect the Total Cost?
Several variables influence the final price of a tankless water heater:
- Home size: Larger homes need higher capacity units
- Hot water demand: Multiple simultaneous showers increase flow rate requirements
- Fuel type: Gas units cost more upfront but often run cheaper monthly
- Existing plumbing setup: Older homes may require extensive modifications
- Brand & warranty: Premium brands come with higher prices but longer warranties
- Location & labor rates: Costs vary depending on your city or region
Tankless vs Traditional Water Heater – Cost Comparison
| Feature | Traditional Water Heater | Tankless Water Heater |
|---|---|---|
| Upfront Cost | $300 – $1,000 | $250 – $2,000 |
| Installation | $300 – $1,500 | $500 – $3,000 |
| Lifespan | 10 -15 years | 20+ years |
| Energy Savings | Moderate | Up to 30% |
While tankless systems are more expensive upfront, they often save money over time thanks to energy efficiency and longer lifespan.
Is a Tankless Water Heater Worth the Price?
A tankless water heater is a long-term investment that offers several benefits:
- Long-term savings: Reduced energy bills compared to traditional storage tanks
- Endless hot water: Perfect for families with high hot water demand
- Space-saving benefits: Compact design frees up utility room space
- Environmental impact: Lower energy consumption reduces your carbon footprint
How to Save Money on a Tankless Water Heater
Investing in a tankless water heater can be costly upfront, but there are several ways to reduce expenses without compromising performance:
- Choosing the right size: Avoid overpaying for a unit that exceeds your household’s hot water needs. A professional can help select the proper flow rate based on your home size and usage.
- Rebates & energy incentives: Many states and utility companies offer rebates for energy-efficient tankless water heaters. Check local programs before purchasing.
- Professional sizing: Correctly sizing your unit prevents underperformance or overspending on a larger-than-needed system.
- Bundled installation offers: Some plumbing or HVAC companies provide discounts when purchasing the unit and installation together, saving both time and money.
By planning wisely, you can enjoy the benefits of a tankless water heater while keeping costs reasonable.
When to Replace Instead of Repair
Sometimes repair is not cost-effective. Consider replacing your water heater if you notice:
- Age of existing unit: Traditional water heaters typically last 10-15 years, while older tankless units may also start declining after 15-20 years.
- Frequent repairs: Repeated issues like leaks, faulty heating elements, or gas problems can indicate the system is nearing the end of its life.
- Rising energy bills: If your water heater consumes more energy than before, it might be less efficient due to age or sediment buildup.
Replacing an outdated unit with a new tankless system often saves money and provides a more reliable supply of hot water.
When to Call a Professional
While some minor water heater tasks can be DIY, tankless systems require expertise. Call a licensed professional when:
- DIY is risky: Incorrect installation can damage the unit or void warranties.
- Proper sizing is crucial: A professional ensures your unit meets your household’s hot water demand.
- Safety & code compliance: Gas units, venting, and electrical work must follow local building codes to prevent hazards.
Professional installation guarantees safety, optimal performance, and peace of mind.
Conclusion
So, how much is a tankless water heater?
- Unit cost: $250 – $2,000 depending on type and size
- Installation cost: $500 – $3,500 depending on labor, plumbing, and gas/electrical requirements
While the initial investment is higher than traditional water heaters, tankless systems provide long-term savings, energy efficiency, endless hot water, and a longer lifespan.
If you’re wondering about the exact cost for your home, the most accurate answer comes from a professional assessment. A licensed technician can evaluate your hot water needs, electrical or gas capacity, and recommend the right system, so you don’t overspend or under-size.
