Tankless Water Heater Cost in Chicago [2025 Data]

Chicago homeowners having new tankless water heaters installed will need to factor in Chicago's above-average cost of living when budgeting for this project. On average, tankless water heater cost in Chicago is $2,577. However, most homeowners are paying somewhere between $1,383 and $3,806. The two main factors influencing costs are the type of tankless water heater chosen and the water capacity needed for your household. Read below to learn more about what you can expect to pay for this project.

Tankless Water Heater Cost Factors 

After exploring tankless water heater vs tank, it's time to narrow down pricing based on whether your home is best suited by a gas, electric, or solar tankless water heater. While the United States Department of Energy estimates that homeowners can save 50% to 80% on utility bills by going with solar, the greyer falls and winters in Chicago, IL can make solar a challenge.

Single-Point Tankless Water Heater vs. Whole-House System

You can choose between single-point and whole-house tankless water heater systems. Some homeowners mix and match, installing a whole-house unit to handle the primary heating duties and placing a single-point system in an additional bathroom. This allows multiple people to shower at once.

Fuel 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:

Size

A primary cost factor is the size of the water heater. Larger heaters service a higher volume of water than smaller heaters, so count on increased costs. The amount of energy the heater can handle is one indicator of size. For tankless gas water heaters, the amount of energy they can handle is measured in the British thermal unit (BTU); electric water heaters use kilowatts (kW). Another measure of size useful for comparing the capacity of gas, electric and solar tankless water systems is gallons per minute (GPM).

• Gas Water Heaters: Smaller water heaters of 120–140 BTUs cost $500 to $1,200, which is enough for a one- or two-bedroom home. Larger water heaters of 180–200 BTUs or more cost $900 to $2,200, and these appliances handle enough volume to service a home of five or more people. Gas water heaters have an average flow rate of up to 5 gallons per minute (GPM).

• Electric Water Heaters: Smaller water heaters of 5–8 kWs cost $100 to $250, though this is just enough for a one-bedroom apartment or small home. Keep in mind that electric water heaters only have a flow rate of up to 2 GPM. Mid-sized electric water heaters of 10–24 kWs cost $210 to $630 and can efficiently service a two-bedroom home. Large heaters of 27–36 kWs cost $420 to $800 and can handle enough volume for an expansive home. 

• Solar Water Heaters:  A household with three to four people in Chicago generally needs a solar tankless water heating system with a 60-square-foot collector, which costs about $2,600 on average. However, larger or more high-demand households may benefit from systems with 80-square-foot collectors, which typically cost between $3,150 and $5,700. However, because of Chicago’s long winters and limited year-round sunshine, an exclusively solar-powered system may not provide reliable performance on its own. Many homeowners choose to pair solar collectors with a gas or electric backup unit to ensure consistent hot water during cloudy or cold periods.

Tankless Water Heater Pro Costs

Plumbers offering tankless water heater installation in Chicago customize quotes after assessing the time and expertise needed to complete an installation. In general, you can expect labor costs for gas hot water heaters to be more expensive due to the added expertise needed to manage the safety of working with gas lines that pose risks for leaks and carbon monoxide poisoning.

Labor Costs

In Chicago, the average hourly rate for a plumber is between $85 and $119. However, homeowners generally need to hire master plumbers commanding rates closer to $110 to $190 per hour for a complex project that involves gas lines or utilities in an older or more complicated home.

Aside from the general higher cost of living in Chicago, one of the reasons why this project is more expensive locally compared to national averages is that Chicago plumbers must be licensed through the City of Chicago Department of Building in order to install or replace water heaters. Plumbers licensed by the city are required to carry a surety bond or letter of credit totaling $20,000.  

Permits

In Chicago, no permit is needed for an in-kind replacement of a water heater. For example, upgrading an old electric water heater to a new electric water heater. However, a permit is needed when switching types. For example, upgrading from an electric water heater to a solar water heater. Depending on the scope of work, a permit for this type of plumbing project in Chicago can cost $30 to $250. 

Accessibility

If the desired location of the new tankless system is difficult to access or narrow and harder to work in, this can raise the labor costs to up to 10% to 15% of your project total. Prices will vary based on the home and setup.

Current Heating System Removal

Removing an existing hot water heating system can cost $500 or more, depending on the unit's size and accessibility, as well as the contractor's hourly rate. When looking for an installation quote, make sure the quote includes the removal and disposal of your current water heater.

Does Installing a Tankless Water Heater Increase Home Value?

Yes, adding a tankless water heater to a Chicago home will generally increase home value by making the home more efficient and reducing long-term energy bills. By upgrading specifically to an ENERGY STAR tankless water heater, homeowners can generally get a return on investment of 70% to 80%.

How Angi Gets Its Cost Data

Home is the most important place on earth, which is why Angi has helped more than 150 million homeowners transform their houses into homes they adore. To help homeowners with their next project, Angi provides readers with the most accurate cost data and upholds strict editorial standards. We survey real Angi customers about their project costs to develop the pricing data you see, so you can make the best decisions for you and your home. We pair this data with research from reputable sources, including the U.S. Bureau of Labor Statistics, academic journals, market studies, and interviews with industry experts—all to ensure our prices reflect real-world projects. 

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