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Going from a tank to a tankless water heater is one of the most effective ways to lower your utility bills. The switch also frees up more space and ensures a consistent hot water supply, as the water is heated on an as-needed basis. It costs between $5,400 and $7,400 to install a new tankless water heater. Most installation companies will also help dispose of your old water tank.

Several signs indicate your water heater may be failing or in need of replacement. Key indicators include:

• Age: A water heater older than ten years is approaching the end of its typical lifespan.

• Water Quality: If you notice rusty or discolored water from your hot water faucets, or a foul odor similar to rotten eggs or sulfur, it can signal internal corrosion.

• Unusual Noises: Banging, rumbling, or popping sounds from the tank often mean sediment has built up, causing the unit to overheat.

• Leaks: Any water pooling around the base of the tank or visible leaks are clear signs of failure.

• Performance Issues: A decline in performance, such as water not getting hot enough, taking longer to heat up, low water pressure, or decreased efficiency, suggests the unit is struggling.

• Visible Damage: Obvious rust and corrosion on the exterior of the tank can indicate a more serious internal problem.

While these signs often point to replacement, some issues may be fixable. It's best to consult a professional plumber to diagnose the problem before investing in a new unit.

The average cost to replace a water heater is around $1,325, with a typical range of $900 to $1,800 for a standard replacement. The final price depends on the type of heater (tank vs. tankless), its size, fuel source (gas or electric), and the complexity of the installation. A simple one-to-one replacement will be on the lower end of the cost spectrum. However, if you are switching from one type of heater or energy source to another, you can expect labor costs to be significantly higher due to the extra work involved. It's also worth considering that while gas and electric heaters may have similar upfront costs, their long-term operating costs can differ based on local utility prices.

If your water heater is about to celebrate the big 2-0, you may want to consider sending it off to greener pastures. While the water heater may seem to be working well, any conventional, tanked water heater over 10 years of age is at risk of failure. If your water heater is 20 years or older, your best move is to replace your aging heater before it completely breaks down.