Switching to an on-demand system gives you endless hot water and saves energy in the long run. Many homeowners want to know the true financial commitment of this upgrade before starting. You need to consider the unit’s price of tankless water heater, labor rates, and necessary home modifications for a clear picture. The average cost to install a tankless water heater typically falls between $2,400 and $4,500 nationwide, including the unit and professional labor.
In this article we will break down exactly how much to install tankless water heater by exploring every factor, from fuel type and size to the crucial modifications your home may need for the best performance from these modern tankless units.
Average Cost to Install a Tankless Water Heater
The national average for tankless water heater installation sits at around $2,800. This includes the unit itself and professional installation.
Here’s what most homeowners can expect:
- Low-end installations: $1,500 to $2,000 for basic electric models with simple installations
- Mid-range projects: $2,500 to $3,500 for standard gas or high-end electric units
- High-end installations: $4,000 to $6,500 for premium gas models with complex venting or extensive upgrades
These figures reflect complete installations in typical single-family homes. Your actual cost may vary based on your location and specific needs.
Tankless Water Heater Cost Factors
Several key factors influence your total project cost. Understanding these helps you budget accurately.
Unit Type and Brand
The unit itself accounts for 40-60% of your total cost. Basic models start around $500, while premium brands like Rinnai or Navien can exceed $2,000. You’re paying for efficiency ratings, warranty coverage, and reliability.
Labor Costs
Professional installation typically runs $500 to $1,500. Licensed plumbers charge $75 to $150 per hour in most areas. Complex installations requiring 8-10 hours of work will hit the upper end of this range.
Fuel Source Conversion
Switching from electric to gas or vice versa adds significant expense. Converting to gas requires running new gas lines, which costs $500 to $2,000. Going electric might need electrical panel upgrades costing $1,000 to $2,500.
Venting Requirements
Gas tankless units need proper venting. Direct vent systems cost $300 to $600. Power vent setups run $500 to $1,000. Existing venting rarely works with tankless models, so plan for new installation.
Permits and Inspections
Most cities require permits for water heater installations. Permit fees range from $50 to $500 depending on your location. Factor in inspection costs of $100 to $200.
Location and Accessibility
Installing in hard-to-reach areas increases labor time. Basement installations with low ceilings, tight crawl spaces, or outdoor locations requiring weatherproofing all add to installation costs.
Tankless Water Heater Cost by Size
Sizing your unit correctly prevents problems down the road. Tankless water heater prices increase with capacity.
Small Units (2-3 GPM)
Cost: $500 to $1,200
Best for: Single bathroom apartments or vacation homes
These handle one shower or a few sinks running simultaneously.
Medium Units (4-6 GPM)
Cost: $800 to $1,800
Best for: Two-bathroom homes with 2-3 occupants
The most popular size for average households. Handles multiple fixtures running at once.
Large Units (7-9 GPM)
Cost: $1,500 to $2,500
Best for: Three or more bathroom homes with 4+ occupants
Supports simultaneous showers, dishwasher, and washing machine use.
Extra-Large Units (10+ GPM)
Cost: $2,000 to $3,500
Best for: Large homes or commercial applications
Handles heavy demand from multiple bathrooms and appliances running together.
Calculate your needs by adding the flow rates of fixtures you’ll use simultaneously. A shower uses 2.5 GPM, while a sink uses 1.0 GPM.
Cost to Install a Tankless Water Heater by Fuel Type
Your fuel choice significantly impacts both upfront and long-term costs.
Electric Tankless Water Heaters
Installation cost: $1,500 to $3,000
Unit price: $500 to $1,500
The cost for tankless water heater electric models stays lower initially. Installation is simpler since you’re working with existing electrical systems. However, you might need service panel upgrades if your home has older wiring.
Electric units work best for:
- Homes without gas lines
- Point-of-use applications
- Smaller households with moderate hot water needs
Operating costs run higher than gas in most regions. Expect to pay $50 to $80 monthly in electricity for a whole-house unit.
Gas Tankless Water Heaters
Installation cost: $2,200 to $4,500
Unit price: $800 to $2,500
Natural gas and propane tankless units require more complex installation. You’ll need proper venting, gas line sizing verification, and potentially gas line extensions.
Gas tankless water heater install cost includes:
- Venting system: $400 to $1,000
- Gas line work: $200 to $2,000
- Condensate drain: $100 to $300
Gas models offer lower operating costs. Monthly expenses typically range from $30 to $50, making them more economical long-term.
Propane vs. Natural Gas
Propane installation costs mirror natural gas. The difference comes in fuel costs. Propane typically costs 2-3 times more than natural gas, impacting your monthly budget.
Additional Tankless Water Heater Costs
Several extra expenses can pop up during installation.
Water Softener Integration
Hard water destroys tankless units quickly. If your water hardness exceeds 7 grains per gallon, install a water softener. Cost: $800 to $2,500.
Recirculation System
Tired of waiting for hot water? A recirculation pump provides instant hot water at any tap. Add $500 to $1,000 to your project cost.
Expansion Tank
Some jurisdictions require expansion tanks with tankless installations. These prevent pressure buildup and cost $150 to $350 installed.
Tank Removal
Removing your old tank-style heater costs $100 to $500. Some installers include this in their quote, while others charge separately.
Structural Modifications
Wall reinforcement, new mounting locations, or outdoor installation enclosures can add $200 to $1,500.
Earthquake Straps
Required in seismic zones, these safety devices cost $50 to $150 installed.
DIY vs. Hiring a Pro
DIY installation of tankless water heaters isn’t recommended for most homeowners.
DIY Installation
Possible savings: $500 to $1,500
You’ll need:
- Advanced plumbing skills
- Electrical or gas fitting expertise
- Knowledge of local building codes
- Proper tools and equipment
Most jurisdictions require licensed professionals for gas work. Doing it yourself voids manufacturer warranties and risks insurance claims if something goes wrong.
Electric point-of-use heaters under sinks offer the only realistic DIY option for handy homeowners.
Professional Installation
Hiring licensed professionals ensures:
- Code-compliant work
- Valid manufacturer warranties
- Proper sizing and placement
- Safe gas and electrical connections
- Passed inspections
The peace of mind alone justifies the installation costs for most homeowners.
Cost to Maintain a Tankless Water Heater
Budget for ongoing maintenance to maximize your investment.
Annual Maintenance
Professional service: $150 to $300 yearly
Maintenance includes:
- Descaling and flushing
- Filter cleaning
- Burner inspection
- Error code diagnostics
Hard water areas need service twice yearly, doubling this cost.
DIY Maintenance
Handy homeowners can flush their units using descaling kits costing $20 to $40. This takes 45-60 minutes and should happen every 6-12 months.
Repair Costs
Common repairs and their costs:
- Flow sensor replacement: $150 to $300
- Heating element (electric): $200 to $400
- Ignition system (gas): $250 to $500
- Circuit board: $300 to $600
Most tankless units last 15-20 years with proper maintenance, compared to 8-12 years for tank models.
Ways to Save Money on a Tankless Water Heater
Smart planning reduces your project cost without cutting corners.
Get Multiple Quotes
Contact at least three licensed plumbers. Quotes can vary by $1,000 or more for identical work.
Time Your Installation
Plumbers offer better rates during slow seasons (late fall and early spring). Avoid summer and winter when demand peaks.
Look for Rebates
Many utility companies offer $300 to $600 rebates for energy-efficient models. Check Database of State Incentives for Renewables & Efficiency for current programs.
Federal tax credits may apply. The Inflation Reduction Act provides credits for qualifying high-efficiency units.
Choose the Right Size
Oversizing wastes money upfront and on operating costs. An honest assessment of your needs saves hundreds.
Keep Your Old Fuel Type
Avoid conversion costs by sticking with your current fuel source. Switching from electric to gas or vice versa adds $1,000 to $3,000.
Bundle Services
If you need other plumbing work, bundling services often reduces per-job costs.
Consider Point-of-Use Units
Multiple small tankless units serving specific areas cost less than one whole-house model. This works well for additions or remodels.
You can read about: How to Install Tankless Water Heater
Conclusion
Understanding how much to install tankless water heater systems can vary based on your home’s layout, fuel type, and any upgrades required. While the upfront cost is higher than a traditional tank system, the long-term energy savings, improved efficiency, and longer lifespan make tankless units a smart investment for most homeowners.
On average, you can expect to budget $2,500 to $3,500 for a standard installation with a reliable mid-range unit. Additional costs may apply if your home needs gas line upgrades, venting modifications, or electrical adjustments.
If you’re ready to enjoy endless hot water and better efficiency, Derks Plumbing is here to help. For expert Tankless Water Heater Installation in Eagle Rock, our licensed technicians can guide you in choosing the right unit and provide a seamless, professional installation tailored to your home.
FAQs
How long does tankless water heater installation take?
Most installations take 4-8 hours. Simple replacements of existing tankless units finish in 3-4 hours. Complex installations requiring gas line work, venting, or electrical upgrades can take 10-12 hours spread across two days.
Do tankless water heaters really save money?
Yes, but payback takes time. Tankless units cost $100 to $200 less annually to operate than tank models. With higher installation costs, break-even typically occurs in 6-10 years. The 20-year lifespan means you’ll save money overall.
Can I install a tankless water heater myself?
Not recommended. Gas work requires licensing in most areas. Improper installation voids warranties and creates safety hazards. Electric installations need knowledge of high-voltage wiring and local codes. Hire professionals unless you’re installing a small point-of-use electric model.
What size tankless water heater do I need?
Calculate total flow rate for simultaneous use. Add 1 GPM per bathroom, 1.5 GPM for kitchen, and 2 GPM for washing machine. A typical 3-bathroom home needs 7-8 GPM. Cold groundwater temperature affects sizing too colder regions need larger units.
Are electric or gas tankless heaters better?
Gas models cost less to operate and handle higher flow rates. Electric units cost less upfront and install easier. Choose gas for whole-house applications in cold climates. Pick electric for smaller homes, warm climates, or homes without gas service.
