How Much Does Water Heater Installation Cost? (2024)

Typical cost range:
$1,519–$4,148

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Water heater installation costs around $1,917, but the project’s total cost ranges from $1,519–$4,148 for tank and tankless water heaters. Find out just how much you might pay in our guide.

Written by Brenda Woods + 1 other Reviewed by Mark Howey Updated 07/09/2024

An average water heater installation costs about $1,500, but you might get away with paying less depending on your water heater style and size.* Installation typically takes one to three hours, and labor costs between $40 and $200 per hour. Understanding the various pricing factors for this project is important when selecting the best water heater for your home. Our cost guide breaks down everything you need to know about the types of water heaters and their average costs.

Key Takeaways

Water heater installation costs $1,519–$4,148, depending on your heater’s size and tank style.
Homeowners often take advantage of a new water heater installation to switch fuel types, but switching your fuel source for a water heater costs significantly more than a standard replacement, often adding $1,500–$2,300.
More energy-efficient water heaters, such as a solar heaters, are among the most expensive types but will last the longest at around 20 years.

*Cost figures taken from national averages from The Home Depot, Fixr, and Homewyse.

What Are Signs You Need a New Water Heater?

If you currently have a water heater, look out for the following warning signs that it may be time for a water heater replacement. You can prevent these issues by maintaining your system with products from reputable companies, such as Corro-Protec.

A hot water heating system that’s older than 15 years
Discolored or odd-tasting water
Loud or odd noises coming from your water heater
Leaks
Water that takes longer than normal to heat or doesn’t heat at all

Read more: How to Maintain a Water Heater

What Is the Average Water Heater Installation Cost?

The type of water heater you want greatly influences your price. A tank water heater may cost as little as $1,519, while a tankless water heater costs $2,120 and up for a whole house unit. Labor for the installation typically costs $40–$200 per hour and takes between one and three hours. So the average labor cost to install a tankless water heater is around $360.

Note that water heater replacement costs have risen quickly in the last few years, and rates also vary widely by region. We’ll go over the various cost factors in more detail below.

Water Heater Cost by Size

Below is a breakdown of the national average water heater cost by tank size.

40-gallon: $600–$1,519
50-gallon: $800– $2,000
75-gallon: $1,91–$2,575
80-gallon: $1,350–$4,200

What Does Water Heater Installation Cost by Type?

Water Heater Type	Average Installation Cost	Average Annual Cost	Life Span	Efficiency Factor (EF)
Gas	$800 (+venting)	$250	8–12 years	0.58%–0.60%
Electric	$850	$500	8–12 years	0.92%–0.95%
Tank	$1,519–$2,278	$250	8–12 years	0.58%–0.60%
Tankless	$2,120–$4,148	$175	15–20 years	0.92%–0.95%
Hybrid heat pump	$2,750–$3,500	$250	8–12 years	2%
Indirect	$1,200–$4,148	$355	15–20 years	0.59%–0.90%
Solar	$2,000–$5,500	$175	20 years	1.0%–1.1%

How Much Are Tank vs. Tankless Water Heater Costs?

Tank and tankless water heaters are two of the most common types of water heaters available.

Storage tank water heaters constantly hold and heat gallons of water. They’re installed out of sight, often in a garage, basement, or utility closet. Tank water heaters typically use electricity, natural gas, or propane.

Storage tank water heaters are generally easier to install than their tankless counterparts, requiring about three hours of labor. This makes them less expensive, with an overall cost between $1,519 and $2,278.

Although a more affordable option, tank heaters have higher energy costs since they constantly run to maintain the desired tank temperature. This means higher utility bills and a shorter life span. Tank water heaters have an efficiency factor (EF) of 0.58%–0.60%, meaning that between 58 and 60% of their energy is converted into heated water. Tank heaters typically last for around 8–12 years.

Tankless water heaters work by heating water as needed. They use a gas burner or electricity to heat the water pipe, supplying water on demand but often at a slower flow rate.

Like hot water storage tanks, tankless units can be stored in a basement or utility closet. They’re smaller than a tank unit, so they can also be mounted to a bathroom or bedroom wall.

Tankless hot water heaters cost more than tank options, ranging from $2,120–$4,148. This is because they’re usually more labor-intensive to install, as they require new gas and water lines. Electrical tankless heaters require new electric wiring.

Though priced higher than tank options, tankless heaters generate more energy savings. They have an efficiency factor (EF) of 0.92%–0.94%, meaning they effectively convert 92%–94% of their energy to heated water. Tankless systems also last longer, with a typical life span of about 20 years.

How Much Are Gas vs. Electric Water Heater Costs?

Gas and electrical models are available for both tankless and tank water heaters, each with pros and cons.

You’ll also decide between power venting and direct venting models. Both methods bring combustion air from outside and send exhaust directly outside your home, but power venting uses a fan when doing so. Power venting adds around $300–$600 to the water heater’s price, plus $300–$500 for more wiring and electrical work from a professional electrician. Direct venting, on the other hand, adds $500–$1,000 to your total.

An electric tank is less expensive to buy and install than a gas tank, with a residential 50-gallon tank water heater priced around $500. However, monthly operation tends to be more expensive than that of a gas heater. This heat source is considered safer than gas, as there’s no risk of leaks or combustion.

The downside to an electric heater is that if there is a power outage, the hot water will not work. Electric units feature an EF rating of 0.90%–0.95% and an average life span of 8–12 years.

Gas units are more expensive to purchase at around $700 for a 50-gallon tank. However, the operational cost is less than an electric model. Although natural gas units can combust or leak, they provide hot water without electricity and won't run out during power outages.

The biggest downside of gas water heaters is that they emit carbon dioxide, thus harming the environment. They also have lower EF ratings, resulting in 60%–70% energy efficiency and an 8–12 year life span.

What Are Energy-Efficient Storage Tank Water Heater Costs?

Consider these energy-efficient water heaters if you want to be more environmentally conscious.

Solar Water Tank Heaters

Solar water heaters use natural sunlight to heat water. They consist of a storage tank that holds water and solar collectors that generate heat. Typically, a solar water heater relies on a traditional water tank if the sun doesn't come out for an extended period.

Solar water tank systems can be broken down into two types: active systems and passive systems. An active system uses a pump to circulate water between the solar collectors and the tank, while a passive system uses natural convection instead.

Homeowners can expect to pay around $2,000 for a passive system and $5,500 for an active system. The higher total cost is due to the extensive labor costs and need for a backup water heater.

Indirect Water Heaters

Indirect water heaters use the energy from an existing furnace or boiler to heat water in the tank. To do this, water from the boiler is circulated into the tank’s coils, heating the water inside. This water heater model is energy efficient but more expensive than traditional heaters at around $1,200–$4,148. The monthly cost to run these heaters is lower than traditional models.

Hybrid Heat Pump Water Heaters

Hybrid heat pump water heaters are the most efficient option, but they’re also the most expensive. These units use heat from surrounding air to generate hot water using a compressor and coils. Hybrid heat pump water heater systems are relatively large and not ideal for smaller spaces, as they need 7 feet of clearance. The upfront cost of these units averages $2,750–$3,500 for installation and materials.

What Are Additional Cost Factors for Water Heater Installation?

Here are some additional cost factors to consider beyond the heater itself.

Location in the home: The water heater’s location in your home will influence the cost of labor. For example, placing the water heater in a difficult-to-reach area, such as the basement or an attic corner, will drive up the installation cost.
Size: Your water heater’s size is determined by the number of people in your home, and prices increase as the size does. A 40-gallon water heater meets the needs of a home with two people and costs around $320–$1,600. Homes with five people or more may need a 75-gallon ($900–$3,000) or 80-gallon ($1,000–$3,200) water heater.
Relocating unit or converting from fuel type: The price greatly varies if you want to have a water heater moved. Relocating an old unit may cost as little as $200 or as much as $10,000. Converting fuel types for your water heater can be more costly. For example, switching from electric to gas requires new gas lines, which may add an extra $1,500–$2,300 to installation.
Venting system: As stated earlier, power venting can add a total of $600–$1,100 to your installation. Direct venting may add anywhere between $500 and $1,000.
Tank removal: An installer may charge extra to remove an old water heater tank.
Materials: Water heater installation requires various materials, including venting pipes, pressure valves, piping for water and gas, thread compound, solder, and more. A professional installer may use more materials for more complicated installations.
Expansion tank: A professional installer may add an expansion tank, which is designed to handle the thermal expansion of water and prevent excessive water pressure. Expansion tanks cost around $40–$150.
Local permits (if needed): Local permits may be required for water heater installation, depending on your home’s location. Sometimes these permits come with an additional cost.
Carpentry work (if needed): Carpentry work may be required in certain circumstances, such as if you need to remove or add woodwork in your attic to fit a heater. This adds more cost to labor and hours worked.

How Should You Select Your Water Heater?

Keep these factors in mind when choosing a water heater for your home:

Fuel type and availability: Before selecting a water heater, consider whether the needed fuel type is available to you and compatible with your home. For example, if you’re considering a natural gas water heater, check to make sure your property has or can receive a natural gas line.
Home size: You should purchase the proper-sized gas tank for the amount of people in your home. For example, a household of two needs a 30–40 gallon tank while a four-person home needs a 50–60 gallon tank.
Cost and energy savings: Weigh the cost of each water heater and its fuel source. Some heaters have a higher up-front cost, but their energy efficiency may save you money in the long run.

When Should You Call a Plumbing Professional?

If your water heater is experiencing any signs of decline or unexpectedly breaks down, you should call a professional. While you may be able to replace a water heater on your own, the intense labor and comprehensive knowledge of installing a new unit make water heater repairs and replacement best suited to a plumber.

FAQ About Water Heaters

Why are water heaters so expensive to install?

Water heater installation is an expensive undertaking that involves considerable labor and material costs. Professional expertise is required to adhere to complex plumbing codes, potentially reroute pipes, vent the unit, and ensure adequate electrical or gas connections. All these tasks require the knowledge and experience of licensed professionals. Additionally, the water heater unit itself is a significant investment, with high-quality, energy-efficient models leading to higher prices. In some areas, rebates are available for high-efficiency water heaters.

How long does it take a new hot water heater to work?

After installation, a gas heater takes around 40 minutes to fully heat up, while an electric heater can take an hour or longer. The time it takes for the heater to start providing your home with hot water also depends on the size and type of water heater.

Can I install a water heater myself?

It’s possible for an experienced do-it-yourself (DIY) enthusiast to install a water heater on their own, but we don’t recommend doing so due to the task's complexity and associated water heater safety risks. Improper installation can lead to gas leaks, carbon monoxide poisoning, water damage from leaks, electrical hazards, and even explosions.

Building codes require specific venting, gas line sizing, drain pans, and other considerations that an amateur may overlook. Unless you have extensive plumbing and construction experience and knowledge of local codes, hiring an insured and licensed plumber is the safest route to ensure the water heater functions properly and does not pose any dangers to the home or occupants.

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