What's the Cost of a Tankless Water Heater?

Allie Ogletree
Written by Allie Ogletree
Updated March 8, 2022
Washing up in kitchen sink
Photo: Dougal Waters / DigitalVision / Getty Images

Your tankless water heater will cost $250 to $6,500

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If you’ve ever experienced a winter with no hot water, then you know how unpleasant it can feel to hop in an ice-cold shower. To combat this experience, many homeowners switch to tankless water heaters. Though these water heaters can be costly upfront, with a national average of $2,200, the energy savings and convenience may make them well worth the cost.

Cost to Install a Tankless Water Heater by Size

The size of your tankless water heater impacts the overall cost of your new system. As a rule of thumb, expect to spend approximately $150 on a low-performance, single-point, electric tankless water heater. These heaters will only provide hot water to a single application, such as a sink or appliance.

Meanwhile, for whole-house systems that heat all water in your entire home, expect to pay about $1,500 for a gas-fired tankless water heater. The most heavy-duty solar panel tankless water systems will cost you somewhere in the ballpark of $2,000 to $6,000.

Cost to Install a Tankless Water Heater in My Neighborhood

Where you live can make a huge difference in how much it costs to install a tankless water heater. Below is the average cost for 10 popular cities in the US:

LocationAverage Cost
Austin, Texas$2,360
Nashville, Tennessee$2,400
New York City$2,200
San Francisco$2,600
Salt Lake City$3,600

Other factors that might play a part in your total expenses include whether you live in a rural or urban area and the natural rise and fall of average going rates.

Tankless Water Heater Types for My Budget

Not all tankless heaters are right for everyone’s budget. Here’s what you can get with your budget:


For this budget, you can afford a single-point tankless system, also known as point-of-use heaters. This system works in small spaces, often providing hot water for individual appliances or sinks. They often cost between $100 and $300 and are easy to install.


If you’re hoping to invest in a system for the whole house but still want to save money, electric models are your next best option. Falling between $800 and $1,500, you can have an effective, whole-house system that is vent-free, high-performance, and energy-efficient.


Both natural gas and propane water heaters fall between $1,000 and $1,500, but you also have to factor in the cost per year to run these heaters. Natural gas averages $200 per year, while propane averages $350 per year.


As the costliest type of tankless water heater, expect to dish out a good $1,700 to $5,000 for a solar panel water heater installation. The good news is that, according to Energy Star per the Consolidated Appropriations Act of 2021, you’ll receive a 30% tax credit for possessing a renewable energy system. With this credit in mind, it’s still a good idea to budget for the upfront costs before purchasing.


While most tankless water heaters won’t exceed $6,500, there are instances where the installation process requires more extensive labor. For example, if your home needs a basement upheaval or other major reconstruction to install the heater, prices can skyrocket beyond the average range. You’ll want to budget for all hidden expenses, especially if you’re planning on installing a high-quality solar heater, as additional installation costs can push your budget into the $6,000 to $13,000 range.

Cost to DIY Install a Tankless System

While you can install a tankless water heater yourself, you must have experience in what you’re doing to actually save money and safely DIY the installation. We strongly advise against attempting to complete this project yourself. Doing so could cause serious injury or damage to your property. 

Tankless water heaters can explode or release carbon monoxide into the air if done by an untrained handyperson. Not to mention, many warranties can be voided if a system isn't installed by a pro, and your home is at a higher risk of not being up to code if you ever choose to sell your property. 

In a nutshell, don’t try this at home! We recommend hiring a local professional electrician or plumber near you.

Cost to Install a Tankless Water Heater by Type

Wondering how much you can save (or spend!) on a tankless water heater? One of the best ways to calculate your expenses is by the type of hot water heater you choose. There are four types of tankless heaters to consider:

Costs for 4 types of tankless water heaters compared, including electric and natural gas

1. Electric Tankless Water Heaters

As the most affordable option, installing an electric model tends to fall between $800 and $1,500. Note that you won’t need to spend additional expenses on ventilation systems or maintenance, unlike other more expensive options.

2. Natural Gas Tankless Water Heaters

Natural gas heaters have a better flow rate than electric heaters. These tankless water heaters are also a little more expensive, costing between $1,000 and $1,500 to install plus the additional expense of approximately $200 a year to run the gas itself.

3. Propane Tankless Water Heaters

Though propane water heaters cost the same as natural gas ones at $1,000 to $1,500 for an installation, the fuel itself can add up, with propane costing approximately $350 a year to run.

4. Solar Tankless Water Heaters

As the costliest option, solar heaters range from $1,800 to $6,000, though some can be more than $13,000. Keep in mind that you have a higher return for solar heaters, with a 30% tax credit and a 50% to 80% decrease in your expenses for heating water.

Cost Factors for a Tankless Water Heater

A modern bathroom in green tone with a shower
Photo: Onzeg / iStock / Getty Images Plus / Getty Images

The typical tankless water heater cost is affected by many factors:

  • Type: The type of tankless water heater you purchase affects the cost, with electric coming in at the most affordable, followed by gas, and then solar. These costs range from $800–$6,000, respectively.  

  • Size: As mentioned, depending on whether you choose a single-point or whole-house point system, your cost can range from as little as $100 to as much as $6,000.

  • Quantity: If you're purchasing a single-point tankless water heater, you might end up buying multiple heaters to accommodate different rooms. These heaters often range from $100–$300 each

  • Quality: You get what you are willing to pay for; if you plan to rely on the heater for everyday use, spend a bit more on higher quality. For a high-quality tankless water heater, expect to pay $1,000–$3,000 extra than you would a lower-quality tankless water heater. 

  • On-site issues: Installation costs can rise if you have such a small bathroom that a plumber and helper can't work side-by-side.

  • Installer experience: An experienced HVAC technician or plumber and helper will get the job done quickly, but will probably charge more than a handyperson.

Labor Costs

Local plumbers and HVAC contractors near you install tankless water heaters. Your cost for labor will run between $40 and $175 per hour. This is affected by your location, local supply and demand, and any discounts or specials a contractor or plumber may offer.

Typical removal and installation, with no hidden problems, requires around three hours, meaning total labor charges to remove an old water heater and install a new tankless system could range from $120 to $525.  

Labor costs are affected by installation location within your home, the size of the tankless system, and the age of existing pipes.

Hidden Costs to Consider

When working out tankless water heater costs, factor in hidden costs for equipment, installation, and use. 

For example, equipment costs can go up if you need accessories to connect the tankless water heater to your pipes. A common, unforeseen cost is retrofitting your home's water pressure if it’s insufficient. A plumber may need to replace a pressure regulator, clear clogged pipes, or install a larger pressure tank (if you're on a well) if your house pressure is low. 

Calculate costs to include prices for natural gas or electric power to run the unit. It’s also a good idea to avoid disappointment in thinking the tankless heater will save you a lot of money on fuel costs—it won't. It will save you some money, and it's environmentally better than a 50-gallon hot water heater.

FAQs About the Cost of a Tankless Water Heater

How do I calculate the cost of a tankless water heater?

To calculate the cost of your tankless water heater, factor in the cost of the heater itself and the installation costs using a tankless water heater installation calculator, like this one on HomeAdvisor.com.

What should I consider when installing a tankless water heater?

So, you’ve made up your mind on the type of tankless water heater you’d like. Before you invest in the installation process, consider the amount of work that may need to be done to remove an old, conventional water heater and replace it with a new tankless one.

What other projects should I do at the same time?

You may want to remodel your bathroom or upgrade your showerhead at the same time as installing a new water heater to enjoy that new tankless water heater.

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