How Much Does Water Heater Installation Cost?

Normal range: $837 - $1,675

The average cost for a water heater is $1,256, but it can vary depending on if you go with a tank or tankless system and need any additional plumbing upgrades.

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Mariel Loveland
Written by Mariel Loveland
Reviewed by Jeff Botelho
Updated November 21, 2022
Top view of a kid washing its hands
Photo: Images By Tang Ming Tung / DigitalVision / Getty Images

You might call it a hot water heater or simply a water heater; either way, water heater installation is one of the most common (and important!) home improvements. Hot water heater replacement costs range from $837 to $1,675, and the price depends on whether you’re doing a simple one-for-one swap or a detailed upgrade to a tankless system. If you’re planning a replacement, here’s a comprehensive look at potential costs to help you set your budget.

See the price range for hot water heaters in

your area
How we get this data
Normal range for U.S.
$837 - $1,675
  • Average
  • $1,256
  • Low end
  • $350
  • high end
  • $11,695
LOWHIGH

Water Heater Replacement Cost Factors

When it comes to a replacement, there’s a huge range of hot water heater costs. You’re paying for materials and labor, and not all installations are easy. Here are some factors that impact the overall price of the job.

Tank vs. Tankless Water Heaters 

A traditional tank-style water heater stores water in a large tank that holds anywhere from 20 to 100 gallons. If you’re like 90% of households, you have a tank hot water heater tucked away in a basement or laundry room. In comparison, a tankless water heater is the size of a small suitcase and has a coil system for heating water.

Tank versus tankless water heaters, with tank-style constantly running and less energy efficient

Tankless models are rising in popularity because of their efficiency and durability. Unfortunately, high-end models can cost twice as much as a conventional tank water heater. For a replacement, expect to spend $600 to $2,500 on a tank-style water heater or $1,200 to $3,500 on a tankless water heater. However, investing in a tankless water heater means you’ll recoup the money in energy savings over the unit’s 20-year life.

If you’re converting a tank system to a tankless system, you may pay twice as much for labor because the job can take twice as long. On the other hand, a tankless water heater costs as little as $100 to $300 for a single-point system that’s only for one appliance.

Keep the ongoing maintenance for the unit in mind when making a decision. For example, the cost to repair a tankless water heater falls between $220 and $975

"Many homeowners invest thousands in upgrading their water heaters to tankless systems but are never informed about the importance of regular maintenance," says Jeff Botelho, Angi Expert Review Board member and Massachusetts-licensed journeyman plumber.

Size

Hot water heaters come in different sizes, measured by gallons (for tank-style systems) or gallons per minute (for tankless systems). Again, tank-style heaters hold anywhere from 20 gallons to 100 gallons. The larger the tank, the more it’s going to cost. Here are some common prices by size, including parts and labor.

Hot Water Heater Size (Gallons)Average Cost
30$550 – $2,100
40$550 – $2,100
50$650 – $2,400
75$1,250 – $3,500
80$1,350 – $3,500

The number of people in your home is the best estimate for which size you’ll need. Start by calculating your first-hour rating (FHR)—aka peak hot water demand—and your tank's recovery rate. 

For example: 

Function x  Peak Use During One Hour = Gallons Used in One Hour

Shower (10-gallon average) x 3 per hour = 30 gallons

For a two- or three-person household, a water heater that holds 40 to 50 gallons—or heats 3 to 5 gallons per minute—is usually adequate. Larger families will need a larger tank but be careful not to purchase a water heater that’s too big for your household, as running it will cost you more over the unit’s lifespan.

Type 

When you install a hot water heater, costs are dependent on the type of fuel the unit runs on. Natural gas, propane, and electric water heaters all start at around $600—but costs rise from there. A high-end electric water heater is the most expensive type and can cost as much as $3,500, excluding hookup or installation. You’ll pay significantly more if you need to install a gas line or electrical wiring.

You’ll also find high-efficiency, indirect, solar, and hybrid heat pump water heaters, which we describe in-depth in the next section. 

Venting System

Electric water heaters generally don’t need venting, but gas or propane water heaters do. There are two types of venting: direct or power. Direct-vent heaters, which use a passive venting system, are less expensive and use an exhaust pipe or chimney. Power-vent heaters are more expensive and use a fan or blower plus electricity. 

In general, expect to spend an additional $300 to $600 on a power-vent unit, plus $300 to $500 for the electrical work.

Venting SystemVenting Route
DirectExhaust pipe or chimney
PowerFan or blower; costs $500 – $1,000 more than other options

Location

You’ll spend more on water heater installation costs if you’re replacing a water heater in a difficult-to-reach area. For example, it will cost more if your contractor has to carry the unit down multiple staircases. 

Relocating your water heater also costs more, falling at about $150 to $3,400, depending on the complexity of the move. Sometimes homeowners want to move the hot water heater’s location to save space or make room for other renovations. If you choose a tankless unit, the installation location could also change. This could mean additional costs for new venting, plumbing, or small carpentry projects to house the water heater correctly.

Installation and Labor

Labor is a significant part of a hot water heater replacement, but costs vary based on how long the job takes. In general, plumbers cost $45 to $200 per hour, while electricians cost $50 to $100 per hour. Expect the following average price ranges for labor alone:

  • Replacing a tank-style water heater: $150–$450

  • Replacing a tankless water heater: $600–$1,850

  • Converting a tank-style water heater to a tankless system: up to $2,500

Labor may also vary depending on the cost of living where you live and the pro’s experience level. 

Permits

Permits for a hot water heater replacement usually cost $100 to $1,500, depending on the extent of the work and your local laws. At the very least, you’ll need a permit to install a gas appliance or alter plumbing and electricity.

Water Heater Replacement Cost by Type

A technician installing a hot water heater
Photo: SolStock / E+ / Getty Images

Most electric and gas water heaters cost between $550 and $1,500, but the unit type will significantly impact your cost. A light-duty commercial heater is more durable but costs about $1,000 more than a residential unit. Here’s what you can expect for each type of water heater.

Type of Water HeaterAverage Cost (Materials and Labor)
Electric$600 – $3,500
Gas$700 – $2,700
Propane$700 – $2,500
High Efficiency $1,500 – $3,000
Indirect$1,200 – $3,500
Solar$1,700 – $5,500
Hybrid Heat Pump$1,200 – $3,500

Electric 

Best for: Small apartments 

Electric water heaters typically cost $600 to $3,500 to install. These units are relatively more wallet-friendly up front, and you can purchase a small electric water heater for a single appliance for as little as $200. Keep in mind that this type of unit requires a 240-volt connection. If you don’t have one near your water heater, you’ll spend an additional $300 to $800 on installing a new electrical circuit.

Overall, electric water heaters perform best in apartments and small spaces because they don’t require various forms of venting. They’re a little bit safer than gas-powered water heaters because there’s no risk of a gas leak, but the total cost to use your water heater will fluctuate with local electricity prices. Luckily, they’re around 95% energy efficient. 

Pros:

  • Safer than gas or propane models

  • Lower up-front costs (doesn’t require extensive venting)

  • Simpler to operate and manage (no pilot light)

  • Relatively simple for a pro to install

  • Heats water more efficiently than gas models

  • Available in point-of-use (POU) or whole-house units

Cons:

  • Heats water slowly

  • Long recovery time

  • Higher operating costs (depending on local electricity prices)

  • Doesn’t work during a power outage

  • Costs can increase if you don’t have a 240-volt connection

Gas

Best for: Areas with high electricity costs

Natural gas water heaters cost an average of $700 to $2,700 to replace. They’re one of the most common types of water heaters and tend to heat water more quickly than electric units.  

Unfortunately, they cost $100 to $200 more than electric units and are less energy efficient. Depending on the average cost of utilities in your city and the current price of gas, you could find yourself stuck with high operating costs. But if electric bills run high in your city, a gas option could be less expensive in the long run.

Pros:

  • Heats water quickly

  • Works during power outages

  • Lower operating costs compared to standard electric units (depending on local gas prices)

Cons:

  • Not all homes have natural gas hookups (you may have to run a new gas line) 

  • Installation costs increase if you need venting

  • Relatively high maintenance, which comes with additional costs

  • Less safe and efficient than electric models

  • Shorter lifespan

Propane

Best for: Rural or inaccessible areas

Propane water heaters cost an average of $700 to $2,500 to replace. This type of unit is an alternative to natural gas. You’ll commonly find them in rural areas without accessible natural gas lines or homes that are off-grid (think: a mountain cabin or island property). 

While it’s a great solution in those instances, a tanked propane water heater tends to cost slightly more than a traditional water heater and requires more maintenance since you’ll need to get regular propane deliveries. They also aren’t as safe as electric heaters because propane is highly flammable. Propane units do carry a risk of explosion and carbon monoxide leaks, though the risk is low if they’re properly installed and maintained.  

Pros:

  • Heats water quickly

  • Lower operating costs compared to electric models

  • Longer lifespan than traditional electric or gas models

  • Available in POU or whole-house units

  • Great solution for off-the-grid areas without accessible gas lines 

  • Works during power outages

Cons:

  • Slightly higher cost for the unit

  • Requires extra maintenance

  • Requires regular propane deliveries 

  • Less safe than electric heaters

High Efficiency 

Best for: Energy savings 

It costs an average of $1,500 to $3,000 to install a high-efficiency water heater, but costs can rise depending on the type. These units can be two to three times more efficient than a traditional tank water heater and boast improvements such as quality insulation, plastic tanks, and smart controls that can detect leaks. In other words, they come with a higher up-front cost, but you can save on utilities over time. 

Even though you use your water heater daily, you probably don’t know it's the second-biggest energy hog in your home (behind the HVAC). Buying a high-efficiency water heater is an economical and environmentally-friendly choice.

Pros:

  • High energy efficiency 

  • Low operating costs 

  • Environmentally friendly

  • POU or whole-house options

  • Solar and electric types are safer than traditional gas or propane units

Cons:

  • Higher up-front installation costs due to specialty features 

  • May run out of hot water more quickly than traditional options

  • May have a slower recovery time

  • May struggle to heat water in colder weather

Indirect

Best for: Flexible fuel source 

Indirect units cost an average of $1,200 to $3,500 to install but tend to be the most budget-friendly to use. The top-selling feature is the flexibility to use multiple energy sources—gas, oil, propane, electric, solar, or any combo of these—from a nearby source. 

"Indirect-fired heaters use a coil inside the tank that connects to a boiler with piping, similar to a heating zone," says Botelho. "The heat radiating from the coil heats the water inside the tank. These tanks are more expensive than traditional gas or electric tanks and take about four to eight hours to install."

Pros:

  • Extremely efficient, particularly in cold climates

  • Low operating costs and quick recovery time compared to traditional tank units

  • Flexibility to use multiple energy sources

  • Can save money by installing a combination water and space heating system

Cons: 

  • Can be inefficient in warmer climates

  • May have higher installation costs if you need to upgrade your boiler

  • May require more maintenance in areas with hard water

  • Natural gas units are less safe than electric options

Solar 

Best for: Energy efficiency in sunny climates 

The typical price of a solar water heater is $1,700 to $5,500, including labor. Costs can rise to as much as $13,000, depending on the model, installation costs, maintenance, and availability of a knowledgeable contractor. These units are a more costly option up front because you’ll need to install solar panels, but they don’t really cost anything to run beyond regular maintenance—so long as the sun shines.  

There are two main types of solar water heaters: active heating systems and passive heating systems. Active systems that circulate water using a pump are the most efficient and expensive. Passive systems, which rely on gravity rather than a pump, are less efficient and less expensive. 

Pros:

  • Lowest possible operating costs

  • Environmentally friendly with zero emissions

  • Less maintenance (as little as every three to five years)

  • Long lifespan (up to 20 years)

Cons:

  • High up-front installation costs (requires solar panels)

  • May struggle during stretches of cloudy skies

  • Requires a backup water-heating method

  • May not be available without roof access

Heat Pump 

Best for: Energy efficiency in garages or basements

On average, a heat pump (or “hybrid”) water heater costs $1,200 to $3,500 to install. This type of unit pulls in heat from the air and uses a compressor or coil to transfer the heat to water stored in a tank. Generally, it works best in temperatures above or around 40 degrees Fahrenheit, but split-type heat pump water heaters will work in temperatures as low as minus 25 degrees.

All in all, heat pump water heaters are extremely efficient. Unfortunately, they need 7 feet of clearance from the floor to ceiling and 1,000 cubic feet of surrounding air, so they’re not a good option for small homes and apartments.

Pros:

  • High energy efficiency

  • Low operating costs

  • Environmentally friendly

  • Split-type heat pump water heaters are great for colder climates

  • Extra efficient in rooms with high heat, like furnace rooms

Cons:

  • Costs 30% to 40% more than a traditional water heating system

  • May struggle to meet a home’s water demands, especially in colder months

  • Space requirements make it a poor choice for smaller homes

Additional Water Heater Installation Costs to Consider

Close-up of water heater
Photo: marketlan / Adobe Stock

In the simplest replacement, a pro will swap out your old hot water heater for a similar model. The installation will usually be simple because the new unit already fits in the space. This isn’t the case for all installations, though. In some cases, you’ll need additional work, which will lead to extra costs.

Hiring an Electrician

If you have to do any extra electrical work, expect to spend $50 to $100 per hour to hire a licensed electrician. This expense may be particularly high if you’re upgrading to an electric tankless model. These units use 120 to 160 amps, so you might have to upgrade your electrical service to 200 amps or more.

Additional Wiring

If you're converting from one fuel source to another, you’ll often need additional electrical wiring. Most homeowners spend $500 to $1,000 installing a new electrical line, but wiring can cost upwards of $2,300. 

New Gas Line

Gas line installation costs an average of $260 to $820, but you can spend upwards of $1,500 switching from an electric water heater to a gas water heater. The gas line transports gas from the outdoor supply system to your unit. 

Most of the time, if you’re replacing an old gas water heater with a new one, you can use your existing gas line. However, you may need to install a new gas line if: 

  • You’re moving the location of your water heater. 

  • You’re switching from an electric water heater to a gas water heater. 

  • You’re installing a brand-new gas water heater.

  • Your existing gas line is damaged. 

New Water Line

If your water heater installation requires a new water line, expect to spend an additional $400 to $2,000. You may need a new water line if you’re relocating your water heater, you’re installing additional POU water heaters, or your existing water line is damaged. 

Expansion Tank Installation 

Installing a water heater expansion tank costs $90 to $350. This is often a requirement in new construction and advisable in areas with freezing winters. 

Water expands when it’s heated and when it freezes. If you’re using a traditional tank water heater and have a closed plumbing system, this expansion can potentially damage your plumbing and put stress on your pipes—particularly when numerous appliances start at once or there’s a spike in demand. A water heater expansion tank will literally take the pressure off. 

Warranties

Some water heaters come with a manufacturer’s warranty, but your contractor may offer additional coverage that further protects your investment for about $100 to $300. Sometimes the added coverage even includes free inspections. Check the warranty of your current water heater to see if it covers repairs or replacements. 

Wall Framing

The job may require extra carpentry work if you’re installing a new water heater or relocating your current unit. Expect to spend $200 to $400 on the price of framing a wall for a water heater installation. 

Drywall Installation

Sometimes, a contractor needs to open up a wall to properly install a replacement water heater. The typical drywall installation cost is $1,000 to $3,000 or $1.50 to $3 per square foot.

Water Heater Removal

Removing your old water heater typically costs $100 to $500, depending on your contractor’s hourly rate. If the water heater is in an inaccessible area or it’s difficult to remove, costs will tilt toward the high end.

Water Damage

A flooded basement is one of the most unfortunate ways to discover you need a new water heater—but sometimes things happen. Generally, water damage repair costs $3.75 to $7 per square foot, with the average homeowner spending $1,300 to $5,550. A local water damage restoration service can diagnose the severity of the issue and start making repairs.

Signs It’s Time to Replace a Water Heater 

The average water heater lasts about 10 years, though certain high-efficiency models can last more than 20. Either way, you’ll eventually need a replacement. Luckily, severe water damage usually isn’t the first sign that your water heater is about to fail. If you know the signals, you can replace your unit before it causes a major problem.

Discolored Water 

Traditional tank water heaters have an essential component known as an anode rod. As you use your water heater, this rod erodes and releases electrons that protect your tank from rust and corrosion. When the rod fails, you’ll notice rusty or cloudy water coming out of the tap when you run hot water. Sometimes you can replace the rod, but other times, you’ll need to replace your water heater.

The Tank Is Leaking

You may notice a few drips or a tiny pool beneath your water heater. Make no mistake—a leaking tank is nothing to mess with, and it’s often a precursor to a full-on flood. It’s one of the more obvious signs that cracks and fissures have developed in your tank, so call a local water heater repair service ASAP.

The Tank Is Making Loud Sounds

If your water heater is unusually loud, it’s time to schedule a home plumbing inspection. Generally, a failing water heater doesn’t go quietly. Over time, minerals and sediment build up inside the tank, creating air pockets. As the water heats up, the air releases and makes a popping, banging, or rumbling noise. 

You’re Running Out of Hot Water

A failing hot water heater won’t efficiently heat water. This problem often starts slowly and snowballs—meaning the water gets cold quickly. You may notice you’re running out of hot water faster than you did in the past, and it’s taking a lot longer to heat back up once you’ve run out. Sometimes an element replacement can remedy this problem, but it might be worth replacing the whole unit. 

You Don’t Have Any Hot Water 

If you don’t have hot water at all, that’s an obvious issue—but an ice-cold shower isn’t the only thing that points to a failing water heater. A lukewarm shower is also a red flag, although some water heaters will struggle to heat up water in freezing weather. If tepid water continues, no matter how hot you turn the tap, it’s best to bring in a pro.

Metallic Taste

If you notice your tap water has a metallic taste, it's possible the metal from your water heater is leaking into your plumbing system. While this could signal that your water heater has irreparably corroded and will most likely leak, sometimes it also means you missed regular maintenance. If it’s the latter, draining your water heater—which you should do every year or so—may remove the funky taste.

Increased Energy Costs

If you notice your energy costs increasing, it could mean your water heater is struggling. This can happen as parts wear down, but sometimes resetting the thermostat can solve the issue. Set your thermostat between 120 and 140 degrees Fahrenheit. If resetting the thermostat doesn’t resolve the problem, call in a pro to diagnose the issue.

Cost to Install or Replace a Hot Water Heater Yourself

Flatly put, it’s not a good idea to install a water heater on your own—nor is it even legal in most cases. Since this project involves water, gas, or electricity lines, you’ll need a permit to do any work. Your city, state, or homeowner’s association will typically only grant permission to a licensed contractor. 

There might even be insurance requirements. Regardless of the legalities, the list of what can go wrong is enormous. Something as simple as over-tightening a gas control valve can cause a gas leak and lead to a fire or carbon monoxide poisoning. For this job, skip the potential hazard and hire a water heater installer near you

Cost to Hire a Pro to Install a Water Heater vs. DIY 

Typically, professional water heater installation costs $850 to $1,700, including the heater itself. Depending on the complexity of the installation, you’ll generally spend anywhere from $150 to $2,500 or more on labor.

How to Save When Replacing Your Water Heater 

Replacing a water heater is often an emergency expense, so it’s not exactly the most budget-friendly project. Fortunately, there are a couple of ways you can save a little money on hot water heater costs while installing this must-have appliance. 

Repair, Don’t Replace

Water heaters have a typical lifespan of six to 20 years, depending on the model and how well it’s maintained. If your water heater isn’t nearing the end of its average lifespan, you can try repairing it instead of replacing it. Water heater repair prices range from $100 to $1,300, and it could be a simple fix if you need something small like a valve replacement. For example, replacing a gas valve on a hot water heater costs between $100 and $200, plus the price of the part.

Stick With the Same Type of Water Heater

If you need to replace your water heater, reduce installation costs by replacing it with a similar model. This mostly eliminates the expenses of switching fuel sources—like installing new electrical wiring, gas lines, water lines, and plumbing—as long as your hookups are in good condition.

Purchase Your Water Heater Directly

Instead of buying your hot water heater through your contractor, purchase it directly. This typically saves some money—but only if you can safely tote it home from the store. Not every homeowner has a large enough car to transport a water heater, so if this is the case, save yourself the hassle and buy it through a pro.

Schedule Replacement for Off-Peak Times

Some contractors charge more to work after hours or on weekends. You can usually save some money by scheduling a weekday replacement during typical work hours. That said, water heater replacements often come with a sense of urgency. Avoiding a costly, same-day service might be worth a couple of cold showers—but not if your water heater is flooding your basement.

Frequently Asked Questions

Tank-style hot water heaters need replacing about every six to 15 years, while a tankless model can last 20 years or more. Over time, water heaters fill up with sediment that can start causing issues. If your unit is 10 years old, start thinking about a possible replacement. Flushing your tank-style water heater annually can increase the lifespan of the unit.

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