Tankless water heater installation typically costs between $1,200 and $3,500, with most homeowners paying around $2,800. This price includes both the unit and professional installation. The final cost depends on your fuel type, home setup, and unit size.
If you’re wondering how much to install tankless water heater in your home, you’re not alone. These on-demand systems save space and cut energy bills by 24-34% compared to traditional tanks. Let’s break down every cost factor so you can budget accurately.
Tankless Water Heater Installation Cost by Fuel Type
Your fuel choice affects both upfront costs and monthly bills. Electric, natural gas, and propane each have different installation requirements.
Electric Tankless Water Heater Installation Cost
Electric models cost $650 to $2,500 installed. The units themselves run $500 to $1,500. Installation adds another $150 to $1,000.
These systems work best in warm climates and smaller homes. They deliver 3 to 8 gallons per minute. That’s enough for one or two bathrooms running at once.
Your electrical panel might need an upgrade. Most electric tankless heaters need 120 to 160 amps. Panel upgrades add $200 to $800 to your project.
Pros of electric units:
- Lowest equipment cost
- No venting required
- Compact size fits anywhere
- Simple installation in most cases
Cons to consider:
- Higher monthly operating costs in some areas
- May need expensive electrical work
- Lower flow rates than gas models
- Less effective in cold climates
Natural Gas Tankless Water Heater Installation Cost
Gas units cost $1,650 to $3,500 total. Equipment runs $750 to $2,000. Professional installation adds $900 to $1,500.
These systems deliver the highest flow rates at 8 to 11 gallons per minute. You can run multiple showers, a dishwasher, and a washing machine simultaneously.
Gas line work often pushes costs higher. Older homes may need lines upgraded from half-inch to three-quarter inch pipe. This modification costs $400 to $800 extra.
Venting adds another $400 to $800. You’ll need stainless steel pipes running through your wall or roof. Proper venting prevents carbon monoxide buildup.
Annual maintenance runs $100 to $500. You’ll need descaling to prevent mineral deposits from reducing efficiency.
Propane Tankless Water Heater Installation Cost
Propane systems cost $1,400 to $3,500 installed. Units range from $500 to $2,000. Installation runs $900 to $1,500.
These work great in rural areas without natural gas service. Flow rates match natural gas at 8 to 10 gallons per minute.
You’ll need a propane tank if you don’t have one. A 100-gallon tank costs $400 to $800. Larger 500-gallon tanks run $1,500 to $3,000.
Propane units need the same venting as natural gas models. Some systems require conversion kits to switch from natural gas specifications.
How Much Does Tankless Water Heater Installation Cost by Unit Size?
Size directly affects your tankless water heater cost. Bigger homes need higher flow rates to handle multiple fixtures.
Point-of-Use Systems
These small units cost $150 to $500 installed. They serve single fixtures like a kitchen sink or bathroom faucet.
Flow rates run 1 to 2 gallons per minute. Perfect for adding hot water to a distant bathroom or outdoor shower.
Installation takes 1 to 2 hours. Most homeowners use these to supplement a main water heater.
Small Whole-House Units
Small systems cost $500 to $1,000. They work for apartments and condos with 1 to 2 bathrooms.
These deliver 2 to 4 gallons per minute. Enough for one shower and one appliance at the same time.
Medium Whole-House Units
Medium units cost $1,000 to $2,000. They handle 2 to 3 bedroom homes with standard water usage.
Flow rates reach 5 to 7 gallons per minute. You can run two showers plus a dishwasher without temperature drops.
Large Whole-House Units
Large systems cost $1,500 to $3,000. These serve homes with 4 or more bedrooms and multiple bathrooms.
They deliver 8 to 10 gallons per minute. Large families can use all fixtures simultaneously without running out of hot water.
You can read about: How to Install Tankless Water Heater
What Additional Costs Affect Tankless Water Heater Installation?
The cost to install tankless water heater goes beyond the unit price. Several factors add to your final bill.
Permits and Inspections
Building permits cost $50 to $200 in most areas. Some cities require separate electrical and plumbing permits.
Inspections add $75 to $150. Inspectors verify your installation meets local codes. This protects your safety and maintains your home’s value.
Old Unit Removal
Removing your old water heater costs $100 to $500. Tank size and location affect the price.
Basement installations cost less to remove than attic units. Some areas charge disposal fees for old tanks.
Structural Modifications
Wall mounting requires proper support. Reinforcing walls adds $100 to $300.
Some installations need new water lines. Copper pipe runs $2 to $4 per linear foot. PEX costs $0.50 to $2 per foot.
Water Treatment Systems
Hard water reduces tankless heater lifespan. A water softener costs $500 to $2,500 installed.
Sediment filters run $50 to $200. They protect your unit from particles that cause wear.
Condensate Drain Installation
High-efficiency gas units produce condensate. You’ll need a drain line to handle this moisture.
Drain installation costs $150 to $400. The price varies based on distance to your floor drain or sump pump.
Tankless vs. Standard Water Heaters
Understanding both options helps you choose wisely for your home and budget.
Upfront Costs
Traditional tank heaters cost $800 to $1,500 installed. That’s $400 to $2,000 less than tankless models.
Tankless hot water heater installation cost runs higher because of complex requirements. You’re paying for specialized equipment and skilled labor.
Operating Costs
Tank heaters cost $440 to $580 yearly to run. They constantly heat stored water even when you’re not using it.
Tankless systems cost $192 to $540 per year. Electric models run on the higher end. Gas units stay cheaper to operate.
Energy savings reach 24% for homes using 41 gallons daily. Homes using 86 gallons or more save 8% to 14%.
Lifespan Comparison
Traditional tanks last 8 to 12 years. Tankless units run 15 to 20 years with proper maintenance.
Over 20 years, you’ll replace a tank heater twice. One tankless unit covers the same period.
Space Requirements
Tank heaters need 10 to 16 square feet of floor space. They’re typically 5 feet tall and 2 feet wide.
Tankless units mount on walls using just 3 square feet. Perfect for tight spaces like closets or utility rooms.
Performance Differences
Tanks deliver consistent temperature but can run out during heavy use. Recovery time takes 30 to 60 minutes.
Tankless systems provide endless hot water within their flow capacity. No waiting between showers or loads of laundry.
Cold weather affects tankless performance more. Incoming water temperature drops, reducing flow rates. Gas models handle this better than electric ones.
DIY vs. Professional Water Heater Installation
Professional installation costs $500 to $1,500 for labor alone. This might tempt you to try DIY installation.
Why Professional Installation Matters
Licensed plumbers prevent costly mistakes. Gas line errors risk fires and carbon monoxide poisoning. Electrical mistakes can start house fires.
Professionals ensure code compliance. This protects your home’s resale value and insurance coverage.
Most manufacturers void warranties without licensed installation. You could lose thousands in coverage.
What Professionals Provide
Certified installers handle:
- Correct gas line sizing and pressure testing
- Safe electrical connections meeting code
- Proper venting preventing carbon monoxide buildup
- System calibration for optimal performance
- Required permits and inspections
- Drainage setup for condensate
- Water pressure verification
- Safety device installation
When DIY Might Work
Small electric point-of-use units sometimes suit DIY installation. You’ll need basic plumbing and electrical skills.
Required tools include:
- Pipe wrenches and adjustable wrenches
- Voltage tester and wire strippers
- Pipe cutter and solder torch
- Mounting hardware
- Teflon tape and pipe fittings
Even simple installations risk problems. One loose connection causes leaks. Incorrect wiring creates fire hazards.
The Real Cost of DIY Mistakes
Fixing amateur installation costs more than hiring pros initially. Water damage from leaks runs $1,000 to $4,000.
Insurance may not cover DIY installation damage. You’re responsible for all repair costs.
How Can You Save on Tankless Water Heater Installation Costs?
Smart planning cuts your cost of tankless water heater installation significantly.
Federal Tax Credits
The federal government offers 30% back on qualifying units. You can claim up to $600 for gas models with 0.95 energy factor or higher.
This credit applies to equipment and installation costs. Keep all receipts for tax filing.
Utility Company Rebates
Many utilities offer $100 to $300 rebates for high-efficiency water heaters. Check your local provider’s website.
Some areas combine state and utility rebates. Total savings can reach $500 or more.
Seasonal Timing
Fall and spring offer the best deals. Retailers discount models 10% to 20% during slow seasons.
Avoid winter and summer when demand peaks. Plumbers charge premium rates during busy months.
Multiple Quotes Strategy
Get three quotes from licensed plumbers. Prices vary $500 or more for identical work.
Ask each contractor to itemize costs. This reveals where you can negotiate or make changes.
Right-Sizing Your Unit
Oversized units waste money upfront and during operation. Calculate your actual needs:
Count fixtures used simultaneously. Showers use 2 gallons per minute. Dishwashers need 1.5 gallons. Washing machines use 3 gallons.
Add these together for your required flow rate. Don’t pay for capacity you won’t use.
Package Deals
Combine water heater work with other plumbing projects. Many contractors discount bundled services.
Bathroom remodels, pipe replacements, or fixture upgrades work well together.
How Does a Tankless Water Heater Work?
Understanding the mechanism helps you maintain your system and troubleshoot issues.
The Heating Process
Cold water enters when you open a hot water tap. A flow sensor detects movement and activates the heating system.
Gas burners or electric coils turn on immediately. Water flows through a heat exchanger, warming instantly.
The system shuts off when you close the tap. No energy wastes heating stored water.
Temperature Control
Internal computers monitor water temperature constantly. Sensors adjust heating power based on:
- Incoming water temperature
- Desired output temperature
- Flow rate through the system
This maintains consistent temperature even when multiple fixtures run.
Flow Rate Limits
Each unit has maximum gallons per minute capacity. Exceeding this causes temperature drops.
Gas models handle higher flow rates than electric ones. A 10 GPM unit serves large homes easily.
Electric units max out around 8 GPM. This limitation affects homes with high simultaneous demand.
Efficiency Features
Modulating burners adjust flame size to match demand. You use only the energy needed for current flow.
Heat exchangers capture maximum energy from fuel. Efficiency ratings reach 98% for top gas models.
Electronic ignition eliminates pilot lights. This saves energy and improves safety.
Advice From a Homeowner
Real experience beats theory every time. Here’s what actual owners report.
Installation Experience
Most homeowners spend $2,500 to $3,200 for complete installation. Gas line upgrades push costs higher than expected.
The installation takes 4 to 8 hours for whole-house systems. Point-of-use units install in 1 to 2 hours.
Operating Costs
Families report $20 to $40 monthly savings on utility bills. Gas models save more than electric ones.
These savings add up to $240 to $480 yearly. Over the unit’s 20-year life, you save $4,800 to $9,600.
Performance Notes
There’s a brief delay before hot water arrives. The system needs 3 to 5 seconds to start heating.
This delay feels longer at distant fixtures. Consider point-of-use units for far bathrooms.
Simultaneous use requires proper sizing. Undersized units cause temperature fluctuations when multiple fixtures run.
Maintenance Requirements
Annual descaling prevents mineral buildup. This DIY task takes 60 to 90 minutes.
You’ll need white vinegar and a small pump. Total cost runs $20 to $40 doing it yourself.
Professional maintenance costs $100 to $200 annually. Many homeowners alternate between DIY and professional service.
Common Regrets
Homeowners wish they’d:
- Verified gas line size before purchasing
- Obtained multiple installation quotes
- Sized units slightly larger for future needs
- Installed water softeners from the start
- Budgeted for all upgrade costs upfront
Is Tankless Water Heater Installation Worth It?
The answer depends on your specific situation and long-term plans.
Financial Break-Even
Most systems pay for themselves in 6 to 12 years through energy savings. Homes with high water usage break even faster.
The longer you stay in your home, the better your return. Moving within 5 years may not recoup installation costs.
Best Candidates for Tankless
These situations favor tankless installation:
- Homes with limited space for tank storage
- Families with high simultaneous hot water needs
- Households planning to stay 10+ years
- Areas with expensive utility rates
- New construction or major renovations
When Tanks Make More Sense
Stick with traditional tanks if:
- Your budget limits upfront spending
- You’re selling within 3 to 5 years
- Your home lacks proper electrical capacity
- Gas lines need expensive upgrades
- You rarely use hot water
Environmental Considerations
Tankless systems reduce energy waste significantly. Lower energy use means a smaller carbon footprint.
Gas models emit some greenhouse gases during operation. Electric versions powered by renewable energy offer the cleanest option.
Longer lifespan means less waste in landfills. One tankless unit replaces two or three tank heaters.
Property Value Impact
Tankless installations appeal to buyers seeking efficiency. Real estate agents report positive buyer response.
The exact value increase varies by market. Energy-conscious areas see better returns than others.
Modern, efficient systems help homes sell faster. They signal overall home maintenance and upgrades.
Conclusion
Understanding how much to install tankless water heater systems helps you budget accurately and choose wisely. Costs range from $1,200 to $3,500 depending on fuel type, size, and installation complexity.
Electric models offer lower upfront costs but may need electrical upgrades. Gas and propane units deliver higher flow rates with increased installation requirements. Calculate your household’s peak demand to select the right size.
Professional installation ensures safety and maintains warranty coverage. The investment pays off through 15 to 20 years of reliable service and 24% to 34% energy savings.
Ready to upgrade your water heating system? Derks Plumbing provides expert Tankless Water Heater Installation in Eagle Rock with transparent pricing and quality workmanship. Our licensed technicians handle all fuel types and ensure code-compliant installation for lasting performance.
FAQs
How much does it cost to switch from tank to tankless water heater?
Switching costs $1,200 to $4,500 total. This includes removing your old tank ($100-$500), upgrading gas lines or electrical ($400-$1,500), and installing the new tankless unit. Homes needing extensive modifications pay more.
Do tankless water heaters really save money?
Yes, they cut water heating costs by 24% to 34% for typical households. You’ll save $20 to $40 monthly on utility bills. Over 20 years, total savings reach $4,800 to $9,600, offsetting the higher installation cost.
What size tankless water heater do I need?
Calculate simultaneous hot water demand. Add gallons per minute for fixtures used at once. Small homes need 3-5 GPM. Medium homes require 5-7 GPM. Large homes need 8-10 GPM for comfortable use.
How long does tankless water heater installation take?
Professional installation takes 4 to 8 hours for whole-house units. Simple replacements finish faster. New installations requiring gas line or electrical work take longer. Point-of-use systems install in 1 to 2 hours.
Can I install a tankless water heater myself?
Small electric point-of-use units suit skilled DIYers. Whole-house systems require licensed professionals for safety and code compliance. DIY installation typically voids manufacturer warranties and creates liability risks.
What maintenance do tankless water heaters need?
Annual descaling prevents mineral buildup in the heat exchanger. DIY descaling costs $20 to $40. Professional service runs $100 to $200 yearly. Hard water areas need more frequent maintenance.
