Cost of New Water Heater and Installation: Tankless vs. Traditional Heaters

Curious about the cost of a new tankless model water heater and installation from a plumbing expert with free estimates? Whether you’re eyeing traditional or tankless gas water heaters, understanding the pricing for installation is key. The contrast between the two options can be significant, impacting your budget and long-term savings.

When it comes to water heater installation pricing, factors like type, size, and additional upgrades can influence the overall cost. Tankless gas water heater installation may have a higher upfront price tag but could lead to lower energy bills over time. Knowing these details upfront can help you make an informed decision that aligns with both your needs and budget.

Understanding Tankless vs. Traditional Heaters


Tankless water heaters, powered by natural gas, work more efficiently than traditional ones because they heat water only when needed, eliminating standby energy losses. This efficiency can lead to significant cost savings on energy bills.


Tankless heaters have a longer lifespan compared to traditional models. Tankless units typically last up to 20 years, while traditional tanks may need replacement every 10-15 years.

Installation Costs

The cost of installing a tankless gas water heater is higher upfront due to the complexity of the system and often requires professional installation. However, the long-term savings on energy bills can offset this initial investment.

Space-Saving Benefits

Tankless water heaters take up less space than traditional tanks as they do not need a large storage tank. This compact size makes them ideal for homes with limited space or those looking for a more streamlined aesthetic.

Environmental Impact

Switching to a tankless gas water heater can reduce your carbon footprint. By heating water only when needed, tankless units consume less energy, leading to lower greenhouse gas emissions compared to traditional models.

Pros and Cons of Tankless Units


Tankless units save energy by heating water only when needed, reducing standby heat loss common in traditional heaters.

Tankless water heaters are compact, saving space compared to bulky traditional tanks, ideal for smaller homes or limited installation areas.


With a lifespan of 20+ years, tankless water units outlast traditional heaters, providing long-term cost savings despite higher initial prices.

Cost Savings

Although tankless units have a higher upfront cost, their energy efficiency results in lower utility bills over time.

Installing a tankless unit can qualify homeowners for tax incentives and rebates, further offsetting the initial investment.

Demand Capacity

Tankless units provide hot water on demand, ensuring a continuous supply without the risk of running out during peak usage times.

The ability to deliver hot water instantly makes tankless units ideal for households with high hot water demands.

Factors Influencing Installation Costs

Unit Type

The type of tankless water heater you choose significantly impacts the installation cost. Tankless units generally require more complex installation procedures compared to traditional tank-based heaters.


The location within your home where the water heater will be installed plays a crucial role in determining the overall installation cost. For instance, installing a tankless water heater in a tight or hard-to-reach space can increase labor costs.

Existing Infrastructure

The condition of your existing plumbing and electrical systems can influence the installation costs. Upgrading these systems to accommodate a new water heater may add to the overall expenses.

Permit Requirements

Obtaining permits for installing a new water heater is often necessary and can contribute to the total cost. Permit costs vary depending on your location and the type of unit being installed, such as a water heater or tankless.

Labor Costs

Labor costs are a significant factor in determining the overall price of installing a new water heater. The complexity of the installation process and the time required by professionals affect labor expenses.

Electric vs. Gas Heater Installation Costs

Efficiency Differences

Electric water heaters are generally more efficient than gas ones, making them a popular choice for homeowners seeking energy savings. However, gas heaters tend to have lower operating costs due to the cheaper price of natural gas.

Gas tankless water heaters may require a larger upfront investment for installation but can result in long-term cost savings due to their lower operational expenses. On the other hand, electric heaters are usually cheaper to install initially but may lead to higher monthly utility bills.

Environmental Impact

When considering the environmental impact of your water heater choice, it’s essential to note that gas water heaters produce greenhouse gas emissions during operation. In contrast, electric water heaters are considered more environmentally friendly as they do not emit harmful gases during use.

  • Pros of Gas Heaters:
    • Lower operational costs over time
    • Faster heating capabilities
  • Cons of Electric Heaters:
    • Higher monthly utility bills
    • Less environmentally friendly compared to gas heaters

Maintenance and Lifespan

Gas tankless water heaters typically have a longer lifespan than electric ones, lasting around 10-15 years compared to 8-12 years for electric models. Gas heaters may require more frequent maintenance checks due to their combustion systems.

It’s crucial to consider the ongoing maintenance requirements when deciding between an electric or gas water heater. While gas heaters might last longer, they often need more upkeep compared to electric alternatives.

Performance and Efficiency Explained

Energy Efficiency

Tankless gas water heaters are known for their energy efficiency, as they only heat water when needed, unlike traditional storage tank water heaters. This tankless water heater, an on-demand heating mechanism, can result in significant energy savings over time. The installation of a tankless gas water heater can lead to lower utility bills due to reduced energy consumption.

Longevity and Durability

When considering the cost of a new water heater and installation, it’s essential to factor in the longevity and durability of the system. Tankless gas water heaters typically have a longer lifespan compared to electric ones, lasting up to 20 years with proper maintenance. This extended lifespan can translate to cost savings in the long run, as fewer replacements are needed.

Space-Saving Design

One of the advantages of opting for a tankless gas water heater installation is its space-saving design. Unlike bulky storage tank water heaters, tankless models are compact and mount on walls, freeing up valuable floor space. This tankless water heater feature is especially beneficial for homeowners with limited space or those looking for a more streamlined aesthetic in their homes.

Instant Hot Water

Another appealing aspect of tankless gas water heaters is their ability to provide instant hot water. With tankless heaters, there may be a delay in receiving hot water as the system heats up the stored water. In contrast, tankless models heat water on demand, ensuring a constant supply of hot water whenever needed.

Environmental Impact

For environmentally conscious individuals, tankless gas water heaters offer a greener alternative. These tankless water heater units produce lower greenhouse gas emissions compared to electric models since they operate using natural gas. By reducing energy consumption and emissions, homeowners can contribute to a more sustainable environment while enjoying the benefits of efficient hot water heating.

Maintenance Requirements

While tankless gas water heaters boast longevity and efficiency, it’s crucial to note that they require regular maintenance to function optimally. Periodic flushing of the system is necessary to prevent mineral buildup and ensure smooth operation. Homeowners should factor in these maintenance requirements when considering the overall cost of new water heater and installation.

Choosing Between Single-Point and Whole-House Units

Types Overview

Tankless single-point water heaters are ideal for smaller spaces or specific areas like bathrooms, providing hot water instantly at the point of use. On the other hand, tankless whole-house units cater to larger properties, ensuring hot water availability throughout the entire space.

Deciding between these two tankless heater options depends on your household’s hot water needs. If you live alone or have a small family, a single-point tankless water heater might suffice, offering energy efficiency and cost savings. Conversely, for larger families or homes with multiple bathrooms, a whole-house tankless water heater unit is more practical to meet the demand for hot water consistently.

Installation Considerations

When it comes to installation, tankless single-point water heaters are relatively easier and quicker to install due to their compact size and specific location placement. They require less space and can be mounted directly under sinks or in cabinets.

On the other hand, whole-house tankless units involve more complex installation processes as they need to be integrated into the existing plumbing system. This may require professional assistance to ensure proper connections and optimal performance.

Cost Analysis

In terms of cost, tankless single-point water heaters are generally more affordable upfront compared to whole-house units. However, it’s essential to consider long-term expenses such as energy consumption and maintenance requirements.

While single-point tankless units may seem cost-effective initially, they can lead to higher energy bills over time due to their on-demand heating nature. In contrast, tankless whole-house units offer better energy efficiency by heating water continuously and distributing it throughout the property.

Maintenance Needs

Single-point water heaters typically have lower maintenance needs since they cater to specific areas only. Regular checks on components like filters and valves can ensure smooth operation without significant upkeep costs.

Conversely, whole-house units may require more frequent maintenance due to their extensive usage across various parts of the property. Flushing the system regularly and inspecting for leaks are crucial steps in maintaining optimal performance and longevity.

Maintenance Tips for Tankless Heaters

Regular Flushing

Regularly flushing your tankless water heater helps prevent mineral buildup and maintains efficiency. Flush the system at least once a year to ensure optimal performance.

Check for Leaks

Keep an eye out for any leaks in the unit, as they can lead to water damage and reduced functionality. Inspect the connections, valves, and water heater regularly for any signs of leakage.

Monitor Water Pressure

Maintaining the correct water pressure is crucial for the longevity of your tankless water heater. Install a pressure gauge to keep track of the pressure levels.

Use a Water Softener

Installing a water softener can help reduce mineral buildup in your tankless water heater, extending its lifespan. Softened water also contributes to better efficiency.

Professional Inspections

Schedule regular inspections by a professional to ensure your tankless water heater is in optimal condition. Professionals can detect issues early on and prevent costly repairs.

Key Considerations Before Installation

Proper Sizing

Ensure the new water heater is appropriately sized for your home’s needs to avoid inefficiency or inadequate hot water.

Energy Efficiency

Opt for a tankless gas water heater installation to benefit from its energy-efficient operation and long-term cost savings.

Professional Installation

Hire a certified professional for the water heater installation to guarantee safety, compliance, and optimal performance.

Location Selection

Select an ideal location for the installation, considering ventilation requirements, proximity to gas lines, and access for maintenance.

Permit Requirements

Check local regulations and obtain necessary permits before proceeding with the installation to avoid legal issues or fines later on.


Now that you grasp the differences between tankless and traditional water heaters, along with the factors impacting installation costs, you can make an informed decision. Understanding the performance, efficiency, and maintenance needs of these systems will help you choose the right one for your home. Consider the installation expenses carefully based on whether you opt for an electric or gas heater and whether a single-point or whole-house unit suits your requirements better. Remember to factor in long-term savings from improved efficiency when making your choice.

Ready to upgrade your water heating system? Take the time to evaluate your needs and budget against the benefits of each type of water heater. By doing so, you’ll ensure a comfortable home with hot water while maximizing energy efficiency and minimizing long-term costs. Keep these insights in mind as you move forward with your decision-making process.

Frequently Asked Questions

What are the main differences between tankless and traditional water heaters?

Tankless heaters provide hot water on demand, saving energy by not storing hot water. Traditional heaters store hot water in a tank, leading to standby heat loss.

Are tankless water heaters more cost-effective in the long run?

Yes, tankless units can be more cost-effective due to their energy efficiency and longer lifespan compared to traditional water heaters.

What factors influence the installation costs of a water heater?

Installation costs depend on the type of heater (tankless or traditional), location complexity, required permits, labor charges, and any additional upgrades needed.

Is it better to choose an electric or gas water heater based on installation costs?

Gas water heaters generally have lower operational costs but higher upfront installation costs compared to electric ones. The choice should be based on your specific needs and budget.

How can I ensure optimal performance and efficiency from my water heater?

Regular maintenance such as flushing the system annually, checking for leaks, adjusting temperature settings, and ensuring proper ventilation can help maintain performance and efficiency.


Looking for cost-effective water heater installation? Compare tankless vs. traditional heaters. Find the best prices and options for your home.