Ultimate Guide to Tankless Water Heater Costs

Last Updated On January 9, 2023
tankless water heater cost worth it

Are you considering a tankless water heater but want to know the complete costs associated with the upgrade? 

You need to consider the all-inclusive costs of this investment. The true cost of a tankless water heater includes buying the unit, installation, and maintenance.

Once you figure out the costs associated with the tankless water heater you can then calculate the utility savings each month to determine if a tankless water heater will save you money in the long run. 

In this PlumbingNav guide, we will cover:

  • What Is the “True” Tankless Water Heater Cost to Consider?
  • What Does the Average Tankless Water Heater Unit Cost?
  • How Much Does a Tankless Water Heater Cost to Install?
  • How Much Do Tankless Water Heaters Cost to Run Each Month?
  • Overall Findings Regarding the “True Cost” of Tankless Water Heaters

What's In This Guide?

      How Much Does a Tankless Water Heater Cost?

      The national average tankless water heater unit will cost is $1,000. There is quite a range, tho.

      Small gas-fired tankless water heater units start at around $170. You can expect to pay $2,000 for the larger high-output heaters that can supply heat to multiple showers at a time.  

      There are many things to consider about the true tankless water heater cost. You can spend between $500 and $2,000 on the price of a tankless water heater unit alone. The cost of installation could run us another $500 to $1,500 or more, depending upon upgrade requirements with your gas line.

      The average upfront cost of a tankless water heater will be $2,216 for the unit, labor, and installation. You may spend less depending on your house size, and if connections are already in place.

      Larger homes that require a specialty unit can expect to pay upwards of $7,000 for the price of a tankless water heater that includes parts, labor, and materials. 

      There are many different styles of tankless water heaters, including gas and electric units. Each tankless water heater’s true cost varies depending on the kind of power or fuel source feeding our water heater. 

      While some tankless water heaters can save us a fortune in the long run, they can cost us more in the initial installation cost if gas upgrades are required.  

      Are you planning to switch your bulky traditional water heater tank to a new energy-efficient tankless water heater? Perhaps you’re looking for the best condensing tankless water heater. We can’t say we blame you. We want you to be aware of the true tankless water heater cost to consider before moving forward.

      Check out this video for a few little-known facts about tankless water heaters.

      What is the “True” Tankless Water Heater Cost to Consider?

      We can’t just go to any store, buy a tankless water heater, and come home and mount it on our wall.  A professional plumber will need to install the water heater for us due to permit requirements.

      Installing the tankless water heater is just the beginning. Tankless water heaters are the most efficient way for us to heat water but they will also cost us in utilities each month. Depending on your family, you might actually save money on heating costs each month if frequent showers are a factor.

      Many things can affect how much a tankless water heater costs. So what are the true tankless water heater costs to consider?  We can use the following six factors to help us calculate the entire tankless water heater cost. 

      Tankless Water Heater Installation / Upgrade Cost

      Installation is the most expensive part of any tankless water heater cost. The professional plumber will need to be paid for his time. We will also be responsible for the cost of all the materials used in the installation of the water heater. 

      A gas tankless water heater cost with installation will be more than electric. Why? A plumber will need to run a new gas line, including permit costs, in order to install it. 

      The cost of an electric tankless water heater installed is often less than a gas unit. However, if an additional circuit is required, you will need to plan for the expense of an electrician as well.

      Outside of the labor discussed above, you will have to pay for the price of the tankless water heater unit itself. When these numbers are all added together, the price tag can sometimes become more than initially estimated.

      Accessibility

      The accessibility to our tankless water heater will play a major role in the cost of insulation. It’s nice that were able to put a tankless water heater in small inconspicuous areas, however, the plumber is not going to enjoy working in such a confined space. They may charge us more if our tankless water heater has poor accessibility. 

      We can typically maintain a tankless water heater ourselves. We will save even more money doing it ourselves if our tankless water heater is in a hard-to-reach spot like an attic or crawl space. 

      Accessibility will be a costly issue every time we call a professional to work on our tankless water heater in the future.

      Brand and Style

      People often wonder why a tankless water heater cost is so high. The technology inside the most energy-efficient tankless water heaters can save us a fortune in our lifetime. It’s best to do our research as homeowners to find the best tankless water heater for our house. 

      Some energy-efficient water heaters have gotten more budget-friendly over the year. Overall cost should not be a factor in our purchasing decision. The most expensive water heating unit is not always the best for our situation.

      Whole House or Single Point

      We have two choices when replacing our standard water heater tank with a tankless water heater.

      • Whole-Home unit
      • Single-Point unit

      A whole-home unit simply swaps out the old unit with the new one. This type of tankless water heater heat all of our hot water devices in one single place. A whole-home tankless heater can save us money compared to a traditional water heater. 

      An even more efficient way to heat water in our home is to install a single-point tankless water heater at every hot water faucet in our house. By doing this, we only heat water at specific locations when we need it. 

      Type of Fuel 

      The amount of money we save using a tankless water heater will ultimately depend on the type of heat source we choose to use. 

      Most homeowners will choose to use the existing power source for the new unit. We can also choose to have a gas line piped to the water heater location. We give ourselves the option of using electricity, gas, or a combination of the two by doing this.  

      There are three different ways a tankless water heater can heat our water.

      1. Electricity
      1. Natural Gas
      1. Propane  

      Flow Rate

      Every tankless water heater is sized by its flow rate. This is because they can’t specify how many gallons they supply, like the measurements in traditional tank-style water heaters. 

      The flow rate is measured by the GPM, which stands for gallons per minute. It also helps us adjust the temperature.

      How can we find the flow rate of our house? We should first add all the numbers of fixtures and appliances we will be using in our hot water system. We can then look up the flow rate of each device to get a total GPM.

      Did you know: You can have a propane gas line piped to your water heater regardless if it’s electric or natural gas? 

      What Does the Average Tankless Water Heater Unit Cost?

      We can finally go shopping for a water heater unit now that we know everything to consider about the true cost of a tankless water heater. The average tankless water heater unit can get expensive but there have been great budget-friendly units to hit the market. 

      We don’t have to buy the most expensive tankless water heater in the store. The most important thing is to do research as a homeowner. We can narrow down our search once we determine our necessary flow rate and fuel type. Our tankless water heater can last a long time with proper maintenance and annual flushings

      In today’s economy, we need to save money where we can. Sometimes, a less expensive unit can be perfectly sufficient for our home. Some of the top brands to look for are Noritz, Rheem, and Rinnai tankless water heaters

      facts about electric water heaters costs (1)

      Tankless Water Heater Installation Cost: How Much?

      How much does it cost to replace a hot water heater with a tankless unit? The national average for tankless water heater installation cost is $2,216. This includes the unit, labor, and installation upgrades.

      A professional plumber will either charge by the job or hourly. The typical installation cost alone will run about $500 to $1,500 for just a basic change out. 

      This cost to install a tankless water heater will skyrocket if any gas lines need to be run to the water heater location. A larger electrical circuit will be necessary for a new tankless water heater in some cases. An electrician will have to be called in when this happens. 

      Things can get expensive when we choose to have a single-point tankless water heater and need to add a circuit at every faucet. It seems that the more we spend on it the installation, the more money we save down the line.

      What Does a Tankless Water Heater Cost From an Energy Usage Perspective? 

      The following list is all the different cost ranges for the multiple fuel styles used to operate tankless water heaters

      Electric Tankless Water Heater Cost 

      Running an electric tankless water heater will cost us on average $527 per year. It is estimated that a typical four-person family will pay $45 per month for electricity using an electric tankless water heater.

      Gas Tankless Water Heater Cost 

      A family that uses a gas-power tangler tankless water heater can expect to pay much less because of the lower price of natural gas compared to electricity. The average yearly cost of a gas-powered tankless water heater is $176 for a 4-person family.

      Propane Tankless Water Heater Cost

      Propane can cost a little bit more than natural gas but it is considered a more efficient fuel. It will cost the average American family approximately $350 per year to run a propane-powered tankless water heater.

      Other Tankless Water Heater Costs to Consider

      Structural modifications – In some cases, we need to add structural support to properly install a new tankless water heater system. With the cost of lumber rising, it’s important to budget this into the overall tankless water heater cost.

      Removing the old system –  Getting a large water heater tank out of our homes can be a real chore. From draining out the water to hauling the heavy tank out the door,  removing the old water heater can often require professional help.  We can save a few bucks by finding a neighbor or friend to help us with this part of the project.

      Insulation – Our water heater system would have to be completely reconfigured if the tankless water heater won’t fit in the current water heater location. Any extra plumbing that gets installed we’ll have to be insulated properly. 

      Insulation can cost around $10 per foot. This is just another tankless water heater cost we must keep in mind. 

      Does the Overall Total Tankless Water Heater Cost Make Them Worth It?

      A tankless water heater will save us money no matter how much we pay to get it installed. The traditional tank-style heaters are becoming a thing of the past. The amount of space they take up will probably be a joke in the future. 

      It’s always best to get a second opinion and to thoroughly do our research before settling on a tankless water heater budget. 

      There are a lot of steps that we can take ourselves in the demolition of the existing water heater. It’s best to get a professional to install a tankless water heater but we should feel comfortable in trying to save money wherever we can. 

      FAQs on True Tankless Water Heater Cost 

      What is the downside of a tankless water heater?

      The main downside of a tankless water heater is the cost of installation. The temperature on a tankless water heater can be inconsistent when multiple faucets are running.   

      Is a tankless water heater worth the cost?

      Replacing a traditional water heater tank with a tankless water heater is worth the cost. It will take time to see these savings after paying so much upfront to have the system installed. 

      How much is the average tankless water heater installation cost?

      The average upfront cost of a tankless water heater will be $2,216 for the unit, labor, and installation. You may spend less depending on your house size, and if connections are already in place.

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

      One of the best things about a tankless water heater is that they don’t run out of hot water. A tankless water heater can fail to keep up if too many hot faucets are on at one time. Tankless water heaters only heat water as we need it so there is no tank to run dry.

      How long does it take to recoup the cost of a tankless water heater in saved energy bills? 

      The cost of installing a tankless water heater can be astronomical. We can expect to see a return on investment after around seven years of average water usage.

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      About Plumbing Navigator

      We write about "all things plumbing," helping you navigate common questions, repairs, and the best plumbing products on the market.

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      We write about “all things plumbing,” helping you navigate common questions, repairs, and the best plumbing products on the market.

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