How Much Does It Cost For A Tankless Water Heater

How Much Does A Tankless Water Heater Cost?

Note from the editors: We receive a commission from affiliate links on Forbes Advisor. The thoughts and ratings of our editors are not influenced by commissions. If you are considering making the move from a regular water heater to a tankless water heater that is more energy efficient, your first inquiry is usually, “How much will it cost?” The total tankless water heater cost includes the purchase price of the device as well as installation fees. The pricing range for each item is shown in the chart to the right.

Additionally, you may be interested in the tankless water heaters available at Home Depot.

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Price, customer rating, maximum GPM, heating capacity (in BTUs), and Energy Star certification were all taken into consideration while compiling this top-five ranking.

Average Cost of Tankless Water Heaters

Choosing between installing a whole-house tankless water heater or one or more single-point units is an option when upgrading to a tankless water heater.

Whole house

Depending on the layout of your home’s plumbing system, a tankless water heater for the entire house may be the best option. With this configuration, a single unit meets all of the hot water requirements of your house on demand. A whole-house system will be more expensive up front than a smaller single-point system, but you will only have to pay for one installation and you may see a reduction in your energy bills.

Single point

Installing one or more single-point tankless water heaters in properties where the plumbing is dispersed over a wider area may be a more cost-effective solution. It wastes less water and energy when the unit is closer to the point of water consumption because less time is spent waiting for hot water to arrive at the faucet.

Tankless Water Heater Costs by Size

Tankless water heaters are available in a range of sizes to ensure that a sufficient amount of water is delivered while maintaining the required temperature rise. gallons per minute is the unit of measurement for water volume rating (GPM).

Depending on whether the model is based on combustion or electricity, the heating capacity is expressed in either British Thermal Units (BTU) or kilowatts (kW). Do not attempt to save money by purchasing a tankless water heater that is too small.


Calculate the total GPM of all water outlets that will be used at the same time to determine the appropriate tankless water heater size for your property. In order to take a shower while doing laundry and running the dishwasher, add the GMP for the shower (2-2.5), washing machine (2-2.5), and dishwasher (2-2.5) and divide the total by three (1.5-2). The GPM rate of a tankless water heater should be between 5.5 and 7.5, depending on the model. The flow rates for common household appliances are listed below on a typical basis.

  • Showerheads ranging from 2 to 3 GPM
  • Older or rain shower heads ranging from 4 to 6 GPM
  • Water faucets ranging from 1 to 2 GPM
  • Dishwashers ranging from 1.5 to 2 GPM
  • Washing machines ranging from 2 to 2.5 GPM

Temperature rise

The temperature increase is defined as the difference between the temperature of the entering water and the temperature at which you require the water to be. Tankless water heaters are rated based on the premise that the water is roughly 50 degrees Fahrenheit when it enters the system. For the majority of applications, water must be heated to around 115 degrees Fahrenheit. As a result, a temperature increase of 65 degrees is required (115 – 50 = 65). In cold or warm climates, the beginning temperature will be cooler or warmer, depending on the season.

With the GPM and temperature rise calculations, you may be confident in your selection of the appropriate unit.

  • 2 to 4 GPM range from $200 to $700
  • 5 to 7 GPM range from $425 to 900
  • 8-plus GPM range from $600 to $2500 or more

Tankless Water Heater Costs by Fueling Method

The typical cost of a tankless water heater varies depending on the kind of fuel used. The majority of users prefer either electric or natural gas (natural gas or propane). Models that are powered by electricity are the least expensive to acquire. Gas-powered units are slightly more expensive up front, but they are less expensive to operate on a monthly basis and have greater power. Consumers in areas where heating oil is common may find it to be a more cost-effective alternative. The use of solar energy may be preferable for those looking for an off-grid solution.

  • Electricity costs between $450 and $1,500
  • Natural gas or propane costs between $500 and $2,000
  • Oil costs between $600 and $3,000
  • And solar costs between $1,000 and $4,000

You May Also Be Interested In Tankless Water Heaters Available On Home Depot

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Price, customer rating, maximum GPM, heating capacity (in BTUs), and Energy Star certification were all taken into consideration while compiling this top-five ranking.

Labor Costs For Tankless Water Heaters

After paying for the tankless water heater, the cost of installing it might easily quadruple the total bill. Installation prices vary depending on your present system, the type of unit being installed, the accessibility of the installation area, and a variety of other considerations.

Basic installation

Costs range from $100 to $2,000 or more on average. Installing a basic system presupposes that the site is generally accessible to the installer and that the power supply is available near the installation location. Some minor components and supplies may be included, but further pipe fitting or electrical work may be required, which will increase the overall cost. Speaking of disposal, consult with your installer on how to properly dispose of the old unit. It is possible that some installers will include this in their fee, while others will not.

Converting to a different power source

Costs range from $500 to $1000 on average. If your existing water heater is electric and you wish to replace it with a gas-powered tankless water heater, the cost of the installation will increase. If you need to install an electric tankless water heater to replace a gas-powered conventional water heater, you will need to connect a new circuit to your home’s electrical circuitry.


Costs range from $300 to $1,000. Any expenditures associated with installation may include venting the system, treating hard water, adding an access panel, painting, and other touch-up work as needed. Some of these improvements may be doable on your own, but others may require professional installation, which can add hundreds of dollars to the overall cost.

Tankless Water Heater Maintenance Costs

Hard water can cause difficulties with tankless water heaters, which makes them more prone to failure. Maintenance should be conducted by a professional twice a year to safeguard the investment and ensure that it continues to operate at peak performance. The total cost of preventative maintenance visits ranges from $45 to $200 each visit, depending on the service.

Pros and Cons of Tankless Water Heaters

Even while tankless water heaters have significant advantages over traditional tank water heaters, they may not be suitable for all households. Let’s have a look at the advantages and disadvantages.


  • Energy-efficient
  • Reduces water use
  • Saves space
  • Has a long operating life


  • Tank heaters are more costly than space heaters. During power disruptions, there is no reserve
  • More yearly maintenance is required. More than one unit is required for larger dwellings.

How to Find a Pro to Install Your Tankless Water Heater

When it comes to installing your tankless water heater, you should use an expert plumber like Aplumber. Plumbers are trained professionals who are capable of performing all of the essential water and gas line work, as well as basic electrical wiring. Depending on whether you’re starting from scratch or upgrading an existing electric heater, you may need to hire an electrician to build a new circuit on your electrical panel before proceeding. Make careful to verify references and only hire experts who are licensed and insured, and make sure to ask for recommendations.

Compare Quotes From Top-rated Water Heater Installers

Estimates are provided without obligation.


Tankless water heaters have the potential to reduce energy consumption by 24 percent to 34 percent in houses that consume fewer than 41 gallons of hot water per day, according to the Environmental Protection Agency.

When compared to typical tank water heaters, they also take up far less space and last twice as long.

Is one tankless water heater enough for a whole house?

In many circumstances, a tankless water heater for the entire house is sufficient. The installation of a supplementary point-of-use water heater in bigger homes, or in homes where hot water demands are dispersed throughout the house, may be essential.

Can you run out of hot water with a tankless water heater?

A tankless water heater that has been appropriately sized provides hot water on demand. It never runs out of hot water since it doesn’t store it.

How long does a tankless water heater last?

Compared to standard tank water heaters, tankless water heaters have a lifespan of around 20 years, which is up to double that of a tank heater.

Is a tankless water heater worth the expense?

The initial cost of purchasing and installing a tankless water heater is much higher than the cost of purchasing and installing a conventional water heater. However, the lower energy expenses translate into monthly savings that accumulate fast. Furthermore, because of the longer lifespan of the tankless water heater, it is significantly more cost-effective in the long term.

How Much Does A New Tankless Water Heater Cost?

We at Bankrate are dedicated to assisting you in making more informed financial decisions. Despite the fact that we adhere to stringent guidelines, this post may include references to items offered by our partners. Here’s what you need to know about There are few things in life that are more unpleasant than taking a hot shower only to be met with water that is so cold it seems like it has come straight from a melting glacier. A tankless water heater is one method to ensure that you never again have to take a cold shower when you least expect it.

The entire cost is determined on the model selected as well as whether or not your home requires retrofitting.

Tankless vs. traditional

Understand the differences between tankless and regular water heaters may be easier if you look at this chart. A typical water heater warms and stores water in a tank with a capacity of 30 to 50 gallons, depending on the manufacturer. The heated water remains in the tank until it is required, and when it is consumed, the tank is refilled and the preheating process is repeated. A tankless water heater heats water on demand by using either electricity or natural gas as a fuel source. As a result, as soon as you switch on the dishwasher or step into the shower, the water that is required is heated at the source and is instantly available for use.

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Electric or gas?

A tankless water heater has a price tag of around $1,500. The answer is dependent on whether you opt for an electric or a gas-powered type of the vehicle. The following are some variables to consider while deciding between the two options:

  • There is a one-time fee. For $500-$700, you can have an electric model, while for $1,000-$1,200, you can get a gas model. Cost of installation: The cost of installing the device and upgrading utility hookups is between $1,000 and $2,000, depending on local expenses and the amount of work that has to be done. Gas versions require the installation of a safe ventilation system, whereas electric ones do not, making the installation of gas models more expensive. Cost of utilities: Gas may be less expensive to run than electricity depending on the cost of utilities in your location. Gas-powered machines require yearly maintenance, but electric-powered units are not required. An electric tankless water heater has no negative influence on the environment since it emits no greenhouse gases and is easy to recycle at the end of its useful life.

Benefits of a tankless water heater

A tankless water heater consumes 30 to 50 percent less energy than a traditional water heater, resulting in annual savings of more than $100 for the average household on heating bills. Instead of wasting 30 percent of its energy, a tankless water heater wastes just 5 percent, according to Energy Star. Although you may have to wait a few seconds for the water to heat up at the source, a tankless water heater ensures that you will never run out of hot water in your home. A tankless water heater is more compact and takes up less space than a standard water heater.

Lastly, a standard water heater has an average lifespan of eight to ten years, but the average lifespan of a tankless water heater is closer to twenty years. If a home equity line of credit (HELOC) is not an option for your remodeling expenses, consider taking out a personal loan.

Disadvantages of a tankless water heater

It is more expensive to purchase and install a tankless water heater upfront than it is to purchase and install a regular water heater. In fact, depending on the unit and the amount of retrofitting your home required, it might cost up to twice as much as a standard unit. It might take up to ten hours to complete the installation due to the level of skill required. The time it takes for hot water to be heated and supplied is longer. You may encounter what is known as a “cold water sandwich,” which occurs when the hot water is switched on but does not have enough time to heat up properly.

The final word

It is possible to use a tankless water heater when rebuilding your house or building a new one, or while staying at home on a part-time basis and do not want to be concerned about a leaky hot water heater while you are gone. Unless you have professional-level installation abilities, installing a tankless water heater is not a do-it-yourself effort. Despite the fact that they can be purchased online or at your local home improvement shop, it is better to leave installation to the professionals because it may be necessary to adapt your home in order for the water heater to function effectively.

It is possible that a tankless water heater will be less expensive in the long term when yearly energy savings and the fact that you will only have to replace it half as frequently as a standard unit are taken into consideration.

Tankless Water Heaters Cost Breakdown & Buyer’s Guide

The most recent update was on February 21, 2022. When purchasing a new on-demand hot water system, the price will vary depending on a number of factors, including the fuel type, system size, and any extra wiring or piping improvements that may be necessary. While the initial cost of installing tankless hot water may appear high when compared to standard tanked water heating solutions, the long-term savings associated with installing tankless hot water may frequently more than compensate for the initial investment.

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How much does a tankless water heater cost?

While tankless water heater prices can range anywhere from $170 to $2,000, on average, you should expect to pay something in the neighborhood of $1,000 dollars. In the case of small gas-fueled tankless water heaters, you may pay as little as $170, but for larger units that can deliver water to numerous appliances at the same time, you could pay as much as $2,000 or more. The type of fuel used in a tankless water heater has the greatest impact on the initial cost of the unit. As a general rule of thumb, gas-powered hot water systems are often two to three times more expensive than electric alternatives.

In order to purchase and install an entire home tankless water heater fueled by natural gas, you may expect to pay up to $3,000 in equipment and installation costs.

Electric units are normally around $600, while gas units are often around $1100.

When it comes to tankless water heaters, there are many various models to select from, each with its own set of features and perks that can have an influence on the overall cost. In this post, you will learn more about your tankless water heater alternatives as well as how to compare them.

Factors that determine your tankless water heater cost

There are several elements that influence the overall cost of installing a tankless hot water system, including the type of fuel you use, the size of your equipment, and its overall condition.

Fuel type

A tankless hot water system can be powered by either natural gas or electricity, depending on your preferences. Typically, gas-powered units are two to three times more expensive than electric units, although the price difference can vary depending on a variety of other factors. Consider the price of gasoline as one element to consider. It is true that electricity is a slightly more expensive fuel for a tankless hot water heater when compared to natural gas, but it is also true that regardless of the fuel type that you choose, you will most likely pay a similar amount for fuel throughout the lifetime of the system because the differences in fuel costs are small.

With one additional wrinkle: it is projected that the price of natural gas would rise at a faster rate than the price of electricity, implying that electric units will only become more economically beneficial over the long term.

System size

It is also vital to take into consideration the system size, which relates to how much hot water can be produced by a certain tankless water heater and hence how much it will cost. In order to evaluate system sizes amongst on-demand water heaters, the easiest method to do so is to look at their gallon per minute rating, also known as GPM. In general, the greater the GPM, the higher the expense of your equipment will be to operate. Your required gallon per minute is determined by the number of appliances you need to operate at any particular time period.

For two bathrooms, the flow rate is 8-9 GPM, and for three or more bathrooms, the flow rate is 9-11 GPM.

GPM ratings for tankless water heaters are provided by the manufacturers and are generally found on the box, however this is a best-case scenario statistic that should not be taken out of context without further investigation.

Continue reading our tankless water heater comparison post to learn more about how to choose the best tankless water heater for your needs based on the genuine GPM it produces.

Installation complexity and additional upgrades

In most cases, tankless water heater installation costs range from $800 to $3,500 on average. Additional installation expenses might raise the price of your initial purchase. For example, if you want an electrician to rewire your home systems in order to accommodate an energy-intensive electric equipment, you may be required to pay them up to $100 per hour for their services. For example, if you want the services of a home contractor to update your gas lines (which may cost as much as $750), the amount you pay up front will cover more than just the cost of water heater equipment and standard installation.

Using a point-of-use system against a whole-house system Tankless water heaters are available in a variety of sizes depending on whether the equipment is a “point-of-use” type or a “whole-house” one.

Point-of-use systems are more frequently fueled by electricity than by natural gas. Point-of-use solutions can be more effective in protecting against hot water shortages in some big homes with significant hot water use.

Tankless water heater rebates and incentives

Unfortunately, the federal tax credit for household energy efficiency measures (which included gas-powered tankless water heaters) expires in 2016, making tankless water heaters no longer eligible. Certain governments and utilities, on the other hand, have their own rebate and incentive programs for customers who switch to on-demand hot water. For example, the Mass Save program in Massachusetts provides a reimbursement of up to $700 for the installation of a tankless gas water heater that has been certified by the ENERGY STAR and meets specific efficiency requirements.

Financial benefits of tankless water heaters

On-demand water heaters, according to the Department of Energy, can be anywhere from 8 percent to 50 percent more efficient than typical storage tank water heaters, depending mostly on your water consumption patterns and system type (point-of-use vs. whole-house). This is due to the fact that, in contrast to tank storage systems, only a little amount of water is ever heated and left unused. When it comes to using on-demand hot water, the most effective method is to install separate point-of-use devices at each hot water faucet in your home.

With a tankless water heating system, you can always save money on water heating, regardless of how efficient your individual system is.

If you want to understand more about how tankless water heaters may effect more than just your money, see our article on the advantages and disadvantages of tankless water heaters.

Calculating your payback period with tankless hot water

How long does it take for a tankless hot water system to pay off its initial investment? While you will begin saving money on fuel expenses immediately after installation, the somewhat higher upfront cost of tankless water heaters as compared to storage tank systems means that it will take several years before you “break even” on your investment in a tankless water heater. An investigation by Consumer Reports found that the payback period for tankless water heaters can range from 12 years to 27.5 years, with electric versions at the lower end of the spectrum and gas units nearer to the top of the spectrum.

Environmental impact of tankless water heaters

In addition to the economical advantages of installing an on-demand water heater, updating your property’s hot water system has favorable environmental consequences that should be taken into consideration. Traditional tank-style water heaters are less energy efficient than tankless water heaters, which means that you’ll require less fuel to heat your water. This translates into less electricity being generated from fossil-fuel power plants like as coal, natural gas, and oil, which helps to reduce the amount of greenhouse gas emissions and other pollutants entering the environment.

Solar panels installed on your roof allow you to power your electric water heater (as well as the rest of your home) with free, zero-emission electricity generated by the sun.

As a result of combining your home water heating system with locally generated solar power, you may save money on heating your house’s water supply while also decreasing your dependency on fossil fuels.

Tankless Water Heater Cost: Installation & Unit Prices

The price of a tankless water heater ranges from $250 to $6,500 dollars. Get quotations from as many as three professionals! Enter your zip code below to get matched with top-rated professionals in your area. In the event that you’ve ever had to take a chilly shower throughout a frigid winter, you’ll understand how terrible it might be to go into the shower. Many households have switched to tankless water heaters in order to avoid this unpleasant experience. Although tankless water heaters are expensive up front, with a national average cost of $2,200, the energy savings and convenience they provide may make them a worthwhile investment in the long run.

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

The entire cost of your new tankless water heater is influenced by the size of your tankless water heater. To give you a ballpark estimate, plan to spend roughly $150 on a low-performance electric tankless water heater with a single point of failure. Single-use water heaters, such as those used for sinks or appliances, will only supply hot water for that specific purpose. Meanwhile, for whole-house systems that heat all of the water in your whole home, you can expect to pay around $1,500 for a gas-fired tankless water heating system.

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

Installation of a tankless water heater might be quite expensive depending on where you reside in the United States. The following table shows the average cost for ten popular cities in the United States:

  • Among the most expensive cities to live in are Austin ($2,360), Boston ($2700), Chicago ($2,100), Denver ($2,600), Miami ($1,040), Nashville ($2,400), New York ($2,200), San Francisco ($2,600), Salt Lake City ($3,600), and Seattle ($2,180).

Other elements that may influence your overall expenditures include whether you reside in a rural or urban region, as well as the natural rise and decrease of average going rates over a certain time period.

What Tankless Water Heater Can I Get on My Budget?

Not all tankless heaters are suitable for every household’s financial situation. Here is a list of what you can receive for your money:


With this price, you may buy a single-point tankless system, also known as point-of-use heaters, which heats just the water that is being used. This system is designed to function in tiny places, and it is frequently used to provide hot water for specific appliances or sinks. They are typically priced between $100 to $300, and they are simple to install.


If you want to invest in a system for the entire house but still want to save money, electric ones are your best bet. They are also the least expensive. You may have an effective, whole-house system that is vent-free, high-performance, and energy-efficient for a price ranging between $800 and $1,500.


Both natural gas and propane water heaters are priced between $1,000 and $1,500, but you must also consider the expense of operating these heaters on a year-round basis. Natural gas costs around $200 per year, whereas propane costs approximately $350 per year.


Solar panel water heater installation is the most expensive form of tankless water heater, with costs ranging from $1,700 to $5,000 for a typical installation. The good news is that, according to Energy Star, the Consolidated Appropriations Act of 2021 will provide you with a 30 percent tax credit for owning a renewable energy system.

Even with this credit in mind, it’s a good idea to set aside some money for the up-front expenditures before making a purchase.


While the majority of tankless water heaters cost less than $6,500, there are some circumstances where the installation procedure necessitates additional time and effort. Price increases might be significant if your property requires a basement renovation or other substantial rebuilding in order to accommodate the heater. Especially if you’re intending on installing a high-quality solar heater, you’ll want to account for any unexpected charges, since additional installation fees can push your budget into the $6,000 to $13,000 area.

How Much Does It Cost to Install a Tankless System Yourself?

While it is possible to install a tankless water heater yourself, you must have prior knowledge in order to save money and do so in a safe and efficient manner. It is strongly recommended that you should not attempt to accomplish this job on your own. This might result in significant harm or property damage to you or your loved ones. An inexperienced handyperson may cause an explosion or discharge carbon monoxide into the air if a tankless water heater is installed or repaired. Not to mention that if a system is not installed by a professional, many warranties will be worthless, and your house will be at a higher risk of not being up to code if you ever decide to sell your property.

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

Are you curious about how much money you can save (or spend!) by switching to a tankless water heater? One of the most accurate ways to estimate your costs is to consider the type of heater you pick. There are four different types of tankless heaters to take into consideration:

1. Electric Tankless Water Heaters

Installing an electric model is the most economical alternative, with costs typically ranging between $800 and $1,500. Keep in mind that, unlike other more expensive solutions, you will not be required to spend additional funds on ventilation systems or upkeep.

2. Natural Gas Tankless Water Heaters

The flow rate of natural gas heaters is higher than that of electric heaters. Additionally, these tankless water heaters are a little more expensive, with installation costs ranging between $1,000 and $1,500, as well as an extra cost of roughly $200 per year to operate the gas itself.

3. Propane Tankless Water Heaters

Although propane water heaters are the same price as natural gas water heaters for installation ($1,000 to $1,500), the cost of the fuel itself may add up, with propane costing approximately$350 per year to operate.

4. Solar Tankless Water Heaters

Solar heaters are the most expensive choice, with prices ranging from $1,800 to $6,000, though some may cost more than $13,000. Keep in mind that solar water heaters provide a larger return because they qualify for a 30% tax credit as well as a 50 percent to 80 percent reduction in your water heating bills due to the 30 percent tax credit.

What Factors Influence the Cost of a Tankless Water Heater?

Adobe Stock / Wavebreak3 / Wavebreak3 The cost of a typical tankless water heater is influenced by a variety of factors, including:

  • Kind: The type of tankless water heater you choose has an impact on the cost, with electric being the most economical option, followed by gas and finally solar, in that order. These expenses range from $800 to $6,000, depending on the situation. The cost of a single point or whole-house point system can range from as low as $100 to as much as $6,000, depending on the size of the system you pick. Number of heaters: If you are purchasing a single-point tankless water heater, you may find yourself having to purchase numerous heaters to fit different rooms. These heaters are typically priced between $100 to $300 per unit. Quality: You get what you pay for
  • If you want to use the heater on a regular basis, it is worthwhile to invest a little extra money on a higher-quality model. Expect to pay $1,000–$3,000 more for a high-quality tankless water heater than you would for a lower-quality tankless water heater. On-site issues: If you have a bathroom that is too tiny for a plumber and a helper to work side by side, your installation expenses may increase. Expertise of the installer: An experienced HVAC expert or plumber and his or her assistant will do the task fast, but they will charge more than a handyman service.
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Labor Costs

Tankless water heaters are installed by plumbers and HVAC specialists in your neighborhood. The cost of labor will range from $40 to $175 per hour for your project. Local supply and demand, as well as any discounts or offers offered by a contractor or plumber, all have an impact on how much you will pay for services. Removal and installation of a typical tankless water heater, with no hidden issues, takes around three hours.

As a result, total labor rates to remove an old water heater and install a new tankless system might range from $120 to $525. The placement of the tankless system within your home, the size of the tankless system, and the age of the existing pipes all have an impact on labor expenses.

Hidden Costs to Consider

When calculating the price of a tankless water heater, remember to include any hidden costs associated with the equipment, installation, and use. Example: If you require accessories to connect the tankless water heater to your plumbing system, the cost of the equipment may increase. If your home’s water pressure is inadequate, one regular and unexpected expense is the cost of adapting it. If your house pressure is low, a plumber may be required to repair a pressure regulator, clean clogged pipes, or install a bigger pressure tank (if you are on a well) in order to restore proper pressure.

This also helps to avoid disappointment if you anticipate that the tankless heater would save you a significant amount of money on fuel expenditures, which it will not.

FAQs About the Cost of a Tankless Water Heater

To figure out how much your tankless water heater will cost, take into consideration the cost of the heater itself as well as the price of installation using an installation calculator.

What should I consider when installing a tankless water heater?

After much deliberation, you’ve decided on a tankless water heater that meets your needs. Consider the amount of labor that will be required to remove an old, conventional water heater and replace it with a new tankless water heater before investing in the installation procedure.

What other projects should I do at the same time?

It is possible that you may wish to rebuild your bathroom or replace your showerhead at the same time as installing a new tankless water heater in order to take advantage of your new tankless water heater.

Tankless Water Heater Cost: Gas & Electric Prices 2022

This page may contain affiliate links, so please keep that in mind. If you purchase a product or service after clicking on one of these links, we will get a commission at no additional cost to you. See our product review method in further detail, or read our FTC affiliate disclosure for more information. Tankless water heaters are more expensive up front than traditional storage water heaters, resulting in a larger price tag and more expensive installation costs. However, operational costs are significantly lower as a result of virtually nil standby losses, which will result in significant savings in the long term.

So, are tankless water heaters a good investment in the long run?

Discover all you need to know in our comprehensive guide below!

  • In a nutshell, the following are the cost reasons for tankless water heaters: The cost of a tankless water heater
  • Tankless water heater installation costs on average
  • Costs of operation and maintenance on a yearly basis
  • Whether tankless water heaters are a good investment or not. The best place to purchase a tankless hot water heater

In a Nutshell

Please remember that the majority of the data on this page are estimates! Installing a new tankless water heater with installation can cost anywhere from $250 to more than $5,000 USD, depending on the extent of the job and who you ask. Because this is obviously not very useful, let us break it down a bit more specifically:


It costs roughly $2,000 USD to install a big tankless gas water heater that is very efficient and has several extra features. The smallest point-of-use device costs about $100 USD, while the largest entire home system costs about $2,000 USD. The cost of an electric tankless water heater ranges from $100 USD for a point-of-use model to around $900 USD for a whole-house one, depending on the model. Tankless water heater installation costs around $1,900 – $2,000 USD on average (but the cost to install an electric heater can be as low as $150 USD).

This average covers the costs of labor, installation supplies, permit processing, and a warranty on the job performed. Continue reading for a more in-depth look at the costs associated with this project.

Tankless Water Heater Cost Factors

What is the cost of a tankless water heater? Answering this question is not as simple as it may appear at first glance. Due to the fact that there are a range of tankless water heater cost considerations to take into account, this is the case. They are as follows:

  • Type of system (fuel type, point of entrance or point of usage, and so forth)
  • Size of the unit (the number of gallons of hot water that may be delivered per minute)
  • The Energy Factor (EF) is a measure of energy efficiency. Features that are unique
  • The length and breadth of the warranty on replacement components
  • Brand

Whole House vs. Single Point

Obviously, the distinction between a whole-house system and a single point of use (POU) system is significant. A tankless water heater that provides hot water for the entire house must be significantly larger than a one that merely provides hot water for a single faucet or shower. In comparison, POE electric tankless water heaters have between 10 and 35 kW of power, whilst a POU unit may have no more than 3 kW of power.

Gas Fired vs. Electric Heaters

Tankless gas units are often more expensive than their electric counterparts, according to industry standards.

Natural Gas vs. Propane

When it comes to the initial purchase price of a water heating system, the choice between natural gas and propane makes little difference. Naturally occurring gas is less costly than other energy sources. propane is more energy efficient than natural gas at the same time.

Oil and Solar Water Heaters

We wanted to include tankless water heaters that are powered by oil and solar energy for the sake of completeness. They are both extremely rare and in the same price range as gas-fueled water heaters, which is a good thing.

Tankless Water Heater Prices

  • Small point-of-use systems start at a little more than $100 USD and go up from there. When equipped with 35,000 BTU (BTU is an abbreviation for “British Thermal Unit” and is used to measure a system’s heating power), they can deliver 1.5 to 2 gallons of water per minute
  • The largest residential whole house tankless gas water heaters can deliver up to 199,000 BTU and deliver up to 10 or 11 gallons per minute. Cost: Approximately $2,000 USD
  • Most tankless gas devices cost between $500 and $1,200 USD and have maximum flow rates ranging from 6 to approximately 11 gallons per minute. From 70,000 to 199,000 BTU, there are several options.

Rinnai is the manufacturer of our number one whole house gas tankless water heater.

  • Extremely high quality
  • Unlimited hot water for homes with up to 212 bathrooms (maximum flow rate of 6.5 gpm)
  • There are options for both natural gas and propane
  • Full remote control is available using a mobile application.

Marey GA10LP Power is intended for point of use.

  • Excellent price-performance ratio
  • Flow rates of up to 3.1 gpm are ideal for point-of-use applications. Installing it almost anywhere is simple because it is small and takes up little space. Allows you to customize the flow of gas and water to meet your specific requirements. Warranty of five years

Electric Tankless Water Heater Prices

  • Approximately $100 USD is the cost of the smallest POU electric tankless water heater. Their highest rated water flow is 3 kW, and their maximum power output is 3 kW. 5 to 1 gallon per minute is the flow rate. In this price range, some electric tankless water heaters are intended for 120 V power sources, although most require a 240 V power supply
  • The most powerful and most costly home electric tankless water heaters cost between $800 and $900 USD. With a maximum flow rate of 6 gpm and a power output of 36 kW, they can provide enough water for whole households
  • Most electric tankless systems are priced between $200 and $600 USD. Flow rates range from 2 to 6 gpm at their maximum. Power output ranges from 11 to 36 kW.

Stiebel Eltron is the manufacturer of one whole-house electric system.

  • Excellent performance
  • Large enough to feed two showers
  • Many different sizes available
  • Simple temperature control
  • Water heater is quite quiet
  • Many different sizes available Maximal energy efficiency is achieved by self-modulation (EF = 0.99).

Rheem RTEX-13 is intended for point of use.

  • A single bathroom or weekend cabin would be ideal for this unit, which is self-modulating to save energy. It is simple to adjust the output temperature by using the dial control. Design that saves on floor space
  • Warranty of five years

Want to go electric but haven’t settled on a specific model yet? We can help. Here’s where you can find the greatest electric tankless water heater! Alternatively, you can refer to this link for our size reference.

Commercial Tankless Water Heater Prices

Whether you need 240,000 BTU or 380,000 BTU or more, the cost of a business tankless water heater can go into the thousands of dollars, depending on your unique needs. As a result, it makes little sense to discuss projections at this time. We propose that you get in touch with a handful of vendors in your region and work your way up from that point.

Price Comparison by Brand

BrandModel Price Range
Ecosmart $140-500 USD
Rinnai natural gas fired tankless heaters $700-2,100 USD
Rinnai propane gas fired tankless heaters $700-1,900 USD
Rheem electric $170-500 USD
Rheem gas fired tankless heaters $500-2,000 USD
Bosch ProTL 175N $1,200 USD
Bosch Tronic 3000 T $150 USD
Stiebel Eltron Tempra Plus $500-850 USD
Camplux CA528 $450 USD
Noritz NRC66DVNG $800-900 USD
Rinkmo 18KW 240V $350 USD

Average Tankless Water Heater Installation Cost

Electric water heaters are less difficult to install than gas water heaters. This is due to the fact that the latter requires release. In the event that you need to rewire your home or improve the electrical system in order to satisfy the amperage needs of your new electric water heater, this may be a different situation. In addition, it matters if you are only replacing an old heater, which means that most or even all of the plumbing connections and other components are already in place; if you plan to switch fuel sources; whether or not you need to make any modifications in order to meet plumbing or electrical codes; and whether or not you want to upgrade from a tank-based to an on-demand heater.

Aside from the fundamentals of labor, there are a number of other considerations:

  • The costs associated with equipment, components, and accessories (mounting hardware, pipes, valves, fittings, etc.)
  • And Cost of a permit – In most areas, permits are necessary for the installation of a new water heater. For further information, contact the municipality or city where you live. Warranty on labor for a specified period of time and within a specified scope

Example 1: Gas Tankless Water Heater Costs

(Tip for mobile users: Swipe to scroll.)

Scenario Labor Material Total Cost
Full installation (mounting, hot and cold water connections, gas line, venting) About 8 (10) hours Copper/flex piping, gas piping and kit, vent piping and kit, valves, fittings, mounting hardware, … $1,000 – $1,700 USD
Replacement of old tankless unit, already existing gas line + venting can be used 3 – 4 hours Gas kit, vent kit, valves, fittings, mounting hardware, … $200 – $700 USD
Other Cost Factors Pricing
Upgrade to larger gas pipe diameter ~$500 USD
New venting system $150 – $600 USD
Removal and disposal of old water heater $100 – $300 USD

Example 2: Electric Tankless Water Heater Costs

(Swipe to scroll on a mobile device.)

Scenario Labor Material Total Cost
Full system installation (cold and hot water connections, electrical connection) 2 – 5 hours Copper/flex piping, valves, fittings, mounting hardware, … $150 – $750 USD
Replacement of old water heater, already existing water lines can be used 1 – 3 hours Valves, fittings, mounting hardware, … $150 – $250 USD
Other Cost Factors Pricing
Outlet must be installed and wired back to electrical panel $100 – $200 USD
Home rewiring $,$$$

Cost to Remove or Replace a Tankless Water Heater

When it comes to tankless water heaters, removing or replacing an existing unit should not be prohibitively expensive in most situations. That being said, just like with standard system installation, the cost of replacing a tankless hot water heater is highly dependent on the specifics of the situation.

Hiring a Pro

Although it is hard to cover every conceivable case here, calling three or four firms in your region and asking for pricing estimates is generally the best course of action to take. Pro tip: Look for contractors who are licensed and insured, who have been in business for a number of years, and who provide a warranty on their work and materials. A service provider with an A+ rating on the Better Business Bureau website and other directories is also a solid sign of their reliability.

Yearly OperatingMaintenance Costs

Obviously, depending on the sort of tankless water heater you have, gas or electricity will be the primary source of your operational costs. In addition, the more hot water you use, the higher your utility expenses will be in the future. Which is more cost-effective: natural gas or electric power? As a general rule of thumb, a gas water heater will be around one-third less expensive to operate than an electric model, however this may vary depending on your local electricity costs. Another important consideration is temperature increase, which is dictated by the temperature of the input water as well as the temperature settings at the output.

It is possible, however, to change the thermostat on your water heater to the lowest output temperature that you are comfortable with.

PropaneNatural Gas Prizes

The cost of operating a gas tankless water heater ranges from less than $200 USD per year to more than $500 USD per year depending on the model. Only a tiny role is played by the efficiency of the system. Natural gas is the least priced choice because it is powered by a utility supply line. In contrast, propane is a more efficient fuel with a significantly greater BTU, but it must be purchased separately from the rest of the fuel. Prices for natural gas and propane vary depending on where you live.


Electric tankless water heaters have an annual operating cost that can range from less than $100 USD to more than $300 USD and even more. It is possible to overlook the effectiveness of a system.

Tankless Water Heater Maintenance Cost

When it comes to maintaining a tankless unit, all that is required is periodic descaling (also known as deliming) and flushing of the heating components to keep it operating at optimal performance. This is normally required once every 12 months, depending on the hardness of your water and how much water you consume. As a point of reference, if you have a water softener placed upstream of your instant hot water heater, you won’t have to bother about descaling. Furthermore, the methods needed are not extremely hard, so you may complete this task on your own to save a few dollars.

You would, however, be need to purchase a system descaler kit, which costs around $120 USD. It takes 1 to 2 hours for a plumber to do routine maintenance. You could expect to pay between $50 to $120 USD for this service.

Are Tankless Water Heaters Worth the Investment?

As previously stated in the introduction, a tankless water heater is a more expensive upfront expenditure when compared to a typical water heater. However, it reduces recurring expenses by a significant margin since it has virtually no standby losses – in contrast to storage tank systems, which heat water around the clock. According to the United States Department of Energy, on-demand water heaters can be up to 30 percent more energy efficient than traditional water heaters, depending on how much hot water you consume on a daily basis.

See also:  What Brand Of Tankless Water Heater Is Best

Are they worth the money?

Average Cost Savings

“Water heating is the second most energy-intensive end-use in the home (.).” It accounts for 16.8 percent of home energy usage and can cost a household anywhere from $200 to $600 per year,” according to the Energy Information Administration. (Image courtesy of the Internet Archive) When moving from a gas tank-based to a gas tankless water heater, a typical family of four consuming 64 gallons of hot water per day may save around $115 USD each year. In the case of high hot water consumption (about 85 gallons per day), energy savings of 8 – 14 percent are achievable.

Overall, tankless water heaters have a relatively lengthy payback period of around 20 years, which is approximately the same amount of time that the average system lasts.

Tankless Water Heaters – Pros and Cons

What are the advantages and disadvantages of putting up a tankless water heater in your home?


The following are some of the advantages of tankless water heaters:

  1. When compared to standard water heaters, they are more energy efficient than those. This is due to the fact that they do not hold any hot water, therefore eliminating standby losses. The heating takes place instantly, allowing you to save up to 30% on energy costs. Heating water on demand also ensures that you will never run out of hot water. Tankless water heaters provide an infinite supply of hot water since they are tiny and therefore easier to install in confined spaces. Having a new water heater will also free up room in your basement or wherever you decide to install it. They are simple to prepare for the next winter season. As previously said, a tankless water heater may last up to 20 years, but a standard water heater with a tank can only last 15 years.


The following are some of the disadvantages of tankless water heaters:

  1. Both the purchase and the installation are more expensive in the beginning. As a result, the payback period is lengthy
  2. Tankless water heaters are susceptible to sluggish flow
  3. Electric tankless systems are restricted in terms of the amount of hot water they can produce at any given moment. However, even the largest units designed for residential usage are unable to heat more than 6 gallons per minute under optimum conditions.

Where to Buy a Tankless Hot Water Heater

Where is the most convenient location to purchase a new tankless water heater? Of course, we always prefer to shop online, for example at Amazon or Home Depot, in order to get the greatest deal possible. However, most manufacturers also sell their hot water heaters through local dealers and/or licensed contractors, which is a common practice in the industry. Home improvement stores and big-box retailers are another feasible choice. If you have any queries concerning the price of a tankless water heater, please don’t hesitate to ask them in the comments section below!

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Learn how much it costs to Install a Tankless Water Heater.

Published on the 10th of January, 2022. Cati O’Keefe, Expert Home BuildingSustainability Contributor, has reviewed this article. HomeAdvisor has contributed to this article.

Tankless Water Heater Cost

Installation of a tankless water heater costs around $2,320, or between $1,196 and $3,447, depending on labor rates. Tankless model costs vary according on the manufacturer, model type, and flow rate. Comparing estimates from local contractors is the most efficient approach to plan a budget for a new tankless water heater. Inquire with your local professional to see whether your tankless system qualifies for a tax refund. If these devices are installed and linked appropriately, they have the potential to save you money in the long term.

Hiring a professional is the best way to get the most of your investment and ensure that the equipment functions at peak performance. They will have the knowledge and skills to accelerate the installation while also ensuring that it is done correctly.

Tankless Water Heater Cost Calculator

Let’s run some numbers to see what the costs are. What part of the world are you in? What part of the world are you in?

National Average $2,320
Typical Range $1,196 – $3,447
Low End – High End $350 – $5,200

The cost information in this report is based on real project costs provided by 2,696 HomeAdvisor users.

Tankless Water Heater Installation Cost

A professional might charge either an hourly rate or a flat price, depending on the services provided to the customer. Installing a tankless water heater will cost you between $45 and $150 per hour on average, depending on how long it takes. Final labor costs range from $100 and $450 on average.

Cost Factors

Labor and the sort of heating equipment you pick are the two most important cost elements to consider. Consumers will also need to figure out how much material and labor will be required for the appropriate pieces. Typical accessories required include the following:

  • Termination vent kits range in price from $40 to $100
  • Gas connector kits range in price from $20 to $35
  • And a two-piece lead-free brass valve set ranges in price from $60 to 110. Fittings and mounting hardware range from $10 to $30
  • Insulation and pipe are priced at $10 per foot.

Other costs to consider include the removal and disposal of the existing heating system, electrical upgrades, additional insulation, and possible structural changes to make room for the new unit.

Get a Quote for Your Tankless System

The sort of equipment you choose will have a significant impact on the overall cost of your project. Single-point electric units cost around $150 apiece, and a high-end gas model for the entire house may cost more than $1,500.

Tankless Type Average Unit Cost
Natural Gas or Propane $1,000 – $1,500
Electric $500 – $1,500
Solar $1,400 – $6,000

First and foremost, you must determine what sort of unit you will require.

  • Noritz gas tankless unit with a BTU output of 199,000: A typical family with many bathrooms will be able to get by with this amount. It might take up to ten hours to complete the installation. Installation of suitable ventilation to avoid carbon monoxide poisoning, as well as the modification of the size of gas lines and fittings, will be more expensive in terms of labor. Model with an electric motor and a point-of-use interface: This is something that can be fitted under the sink. Installation takes an average of about two hours. It is necessary to have an electric timer, an outlet, and supply lines.

Whole House or Single Point

Tankless systems that are installed at a single point, or at a “point of use,” are those that are installed expressly by and for individual appliances and faucets that require them. They are quite simple to install and range in price from $100 to $300 per unit. They will be more efficient than utilizing a single one for the entire home because the water will only travel a small distance and will thus be wasted less frequently. The fact that they work independently of one another makes these single point systems particularly helpful in homes with several bathrooms and appliances.

Village Plumbing, LLC is based in Henderson, Nevada.

Natural Gas or Propane Water Heaters

Installation of natural gas and propane models often costs between $1,000 and $1,500. While all of these types of gas will feed your system in a similar manner, there are some significant variations in the costs of purchase and operation between the two. propane must be purchased separately from natural gas since it is dependent on a utility supply line to be available. If you reside within a specific distance of a natural gas pipeline, you may be obliged to connect to it to heat your home. This isn’t a problem for the vast majority of homeowners.

Propane, on the other hand, is a more environmentally friendly and energy-efficient fuel that has a larger BTU capacity than natural gas.

They are also available in a variety of outputs ranging from 140,000 BTUs to 380,000 BTUs and in both residential and commercial categories. If a natural gas connection is installed in your neighborhood, double-check that your existing appliances can be converted before making the move.

Electric Tankless Water Heater Prices

240V 80 Amp hard-wired electrical service is required for electric whole-house tankless water heaters, which means your home must have a minimum of 150 Amp of electrical service to run all of the equipment. Cati O’Keefe is an expert home builder and contributor to the Home BuildingSustainability website. Electric variants are less costly than gas counterparts, with installation costs ranging from $800 to $1,500 on average. Because there is no requirement for venting, the installation work required is less difficult as compared to gas types.

In comparison to a tank-based unit, the tankless electric unit is 20 percent to 30 percent more energy efficient and produces no greenhouse emissions.

In most cases, electricians charge between $50 and $100 per hour.

  • Electric hybrid water heaters are initially more expensive than ordinary electric ones, but they heat water more quickly than conventional electric models. Despite the fact that they are not considered tankless, they have many of the characteristics of a tankless system: They do not require any ventilation and are extremely cost-effective. However, they are only available in versions with a maximum BTU output of 8,700. Electric Models for Point-of-Use: $100 to $300 per unit- These have a number of appealing characteristics, including as their price and ease of installation. Aside from that, they are quite easy to use beneath sinks and in compact spaces, including near washing machines. This is a fantastic alternative for folks who want compact units for campers, boats, and other modest restroom requirements. They are non-corrosive, insulating, visually appealing, and light-weight in design. They contribute to water conservation by easily heating and delivering it swiftly
Find a Pro to Get Your Heater Installed

Solar heaters range in price from $1,700 to $5,000 to install. Prices have been reported to go as high as $13,000. These approaches, on the other hand, produce some of the biggest returns. First and foremost, they are eligible for the 30 percent tax credit. For a $6,000 installation, that equates to $1,800 in return. Second, studies have shown that they may save water heating costs by 50 percent to 80 percent, depending on the model. Tankless heaters can be used in conjunction with solar power systems to maximize energy savings.

Solar water tanks can be used to store hot water collected by solar collectors, which can then be utilized by the tankless water heater in the residence.

Tax Credits

Another aspect that will have an impact on expenses is a discount that is being provided on solar-electric equipment. Solar water heaters are eligible for a 30 percent tax credit on the cost of installation from the federal government. More information on the solar tax credit may be found at Energy Star. Inquire with your installer about tax credits and manufacturer rebates, as well as other financial incentives.

Popular Tankless Heater Brands

Tankless Prices by Brand
A.O. Smith $600 – $4,000
Bradford White $500 – $2,000
EcoSmart $150 – $6,000
Rheem $200 – $2,000
Rinnai $500 – $4,300
Takagi $500 – $7,000

Choosing the Right Tankless Water Heater

“The advantage of using a tankless water heater is that you are avoiding any liability from leaks. We receive calls on a regular basis from customers whose conventional tank heaters have failed. Even the new ones fail since they are only capable of carrying 50, 40, or 100 gallons of water each. That leak might cause substantial harm if you’re on vacation and it happens to you. The advantage of using a tankless system is that you won’t have to worry about it.” Twin Home Experts is owned and operated by Jim Schuelke in Phoenix, Arizona.

So, how can customers choose which one is the best fit for their needs and preferences?

The flow rate is measured by counting the number of gallons that are produced every minute (gpm).

Customers should establish which appliances and fixtures are being utilized at the same time in order to calculate the maximum gallons per minute (gpm) that is needed. Check out the table below to determine which tankless water heater capacity is most appropriate for you: 1.

Average Water Usage for Common Household Features

  • Washing machine flow rates are 1.5-3.0 gpm
  • Shower flow rates are 1.0-2.0 gpm
  • Bathroom faucet flow rates are 0.5-1.5 gpm
  • Dishwasher flow rates are 1.0-2.5 gpm
  • Kitchen flow rates are 3.0-9.0 gpm.
Compare Quotes For You Tankless Heater Installation
  • Installation that is more time-consuming and expensive
  • Prices are higher
  • Units take up more space
  • They are better for larger places.

Pros of Tankless Units

This is not a project that the ordinary do-it-yourself homeowner should attempt. Many homes will need to be modified in order to suit this system, which may need the installation of new wiring or gas lines, the installation of new plumbing and fittings, and the rebuilding of drywall. This task must be conducted by a qualified professional in some areas, which is required by law. This is due to building rules governing carbon monoxide emissions, heat resistance, ventilation, and state-specific codes, such as seismic straps in California, among other things.

Additionally, they may make certain that you have the proper equipment for your property.

Using a professional ensures that the job is completed quickly and accurately, preventing your house from becoming flooded while you wait for a plumbing permit.

Locate a Professional in Your Area


The payback time for these products is rather lengthy. Despite the fact that they are expected to endure for 20 years, it will take around 20 years for your energy savings to match your initial outlay. So the value of these models is determined by their use to you and their potential utility in attracting future home purchasers to your neighborhood. By selecting the most appropriate model for your consumption requirements, you may increase the return on your investment.

Are tankless hot water heaters better?

The advantages of these models over conventional models are numerous. They save water by heating as they go, and they can help you save money on your energy bills. As a result, they are more durable and require less maintenance than conventional tanks since they do not store water, which may erode tank material and create leaks.

Do tankless hot water heaters work without electricity?

In the event of a power failure, these units will not function. Even gas versions require power to operate their spark igniter, which is a common problem with gas models.

What temperature should you set a tankless water heater?

The Consumer Product Safety Commission recommended that products be stored at 120 degrees Fahrenheit for the greatest amount of safety and efficiency. Do not set your unit to a temperature higher than 140 degrees Fahrenheit under any circumstance.

What is the best rated tankless water heater?

Rheem and EcoSmart are two brands that have received great ratings. In spite of this, the business is always changing and each home and family will have its own set of requirements. It’s advisable to speak with a professional to determine which option is best for you.

How much water does a 20-minute shower use?

A typical shower consumes 2.5 to 3.0 gallons per minute, resulting in a 20-minute shower consuming 50 to 60 gallons of water. In most cases, these water heaters are capable of producing 4 to 8 gallons of hot water per minute.

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