Water Heater Installation Cost: Tankless Options Guide

Curious about the cost of water heater installation? Wondering about tankless water heater installation expenses or the average cost for the job? If you’re contemplating upgrading your water heating system, understanding these costs is crucial. In this post, we break down the factors influencing water heater installation costs, from traditional models to tankless options. Stay tuned to learn more about what to expect when budgeting for your water heater upgrade.

Exploring Tankless Heater Installation Cost

Cost Comparison

Tankless water heater installation costs are generally higher than traditional water heaters due to the advanced technology involved. However, the long-term savings from energy efficiency often offset this initial expense.

Average Cost Range

On average, tankless water heater installation can range from $1,000 to $3,000, depending on various factors like the unit’s size and complexity. In contrast, traditional water heater installations typically cost between $500 and $1,500.

Potential Savings

One of the significant advantages of tankless water heaters is their energy efficiency, leading to lower utility bills over time. By heating water only when needed, tankless heaters eliminate standby heat loss common in traditional models.

Cost Variation by Heater Type

Gas vs. Electric

Gas tankless water heaters are typically more expensive to install than electric ones due to the need for proper ventilation and gas line connections. On the other hand, electric tankless water heaters are easier and cheaper to install because they don’t require venting.

Gas Tankless:

  • Higher installation cost due to ventilation needs.
  • Requires a gas line connection, adding to the overall expense.

Electric Tankless:

  • Lower installation cost as no venting is necessary.
  • Simplified installation process compared to gas counterparts.

Point-of-Use vs. Whole-House

The installation cost of point-of-use tankless water heaters is generally lower than that of whole-house systems. This is primarily because point-of-use heaters are smaller and only need to be installed near the specific faucet or appliance they serve.


  • Lower installation cost due to smaller size and localized installation.
  • Ideal for providing hot water to a specific area without heating water throughout the entire house.


  • Higher installation cost as it involves more complex installation procedures.
  • Provides hot water throughout the entire house, requiring a larger unit and more extensive setup.

Impact of Energy Efficiency Ratings

The energy efficiency rating of a tankless water heater can significantly impact the overall installation cost. Highly efficient models may have a higher upfront cost but can lead to long-term savings on energy bills, making them a worthwhile investment over time.

Energy Efficiency:

  • Higher-rated units may come with a higher initial price tag.
  • Increased efficiency can result in lower energy consumption and reduced utility costs over the heater’s lifespan.

Key Factors Affecting Installation Cost


The location of your property plays a significant role in determining the installation cost of a water heater. Urban areas might have higher labor costs and permit fees compared to rural locations.

Labor Costs Labor costs can vary based on the complexity of the installation process. Hiring experienced professionals may increase upfront costs but ensure proper installation, reducing future maintenance expenses.

Existing Infrastructure and Upgrades

The condition of your existing infrastructure affects the overall cost of water heater installation. Upgrading old pipelines or electrical systems to meet current standards can add to the total installation cost.

Permits Securing necessary permits from local authorities is crucial for a legal and safe installation. Permit costs are often overlooked but are essential for compliance with building codes and regulations.

Additional Features

Water softeners and recirculation pumps are additional features that can impact the total cost of installing a water heater. While these features enhance efficiency and performance, they also add to the initial investment.

  • Pros:
    • Increased energy efficiency.
    • Improved hot water distribution.
  • Cons:
    • Higher upfront costs.
    • Additional maintenance requirements.

Benefits of Choosing Tankless Heaters

Energy Efficiency

Tankless water heaters offer improved energy efficiency compared to traditional tank heaters. By heating water only when needed, they consume less energy, resulting in lower utility bills.

Space-Saving Design

One of the significant advantages of tankless water heaters is their space-saving design. Unlike bulky traditional tanks that take up considerable space, tankless heaters are compact and can be installed in tight spaces like closets or under sinks.

Tankless water heaters have a longer lifespan than traditional tanks, typically lasting up to 20 years. This extended lifespan not only saves money on replacement costs but also reduces environmental impact by decreasing the number of units disposed of in landfills.

Reduced Risk of Leaks

Another benefit of choosing tankless water heaters is the reduced risk of leaks. Traditional tanks are prone to corrosion and leaks over time, potentially causing water damage to homes. In contrast, tankless heaters do not store water, minimizing the risk of leaks and water damage.

  • Pros:
    • Lower energy consumption
    • Compact size for versatile installation options
  • Cons:
    • Higher upfront cost compared to traditional tanks

Drawbacks of Tankless Water Heaters

Higher Upfront Costs

Tankless water heaters typically come with higher upfront costs compared to traditional storage tank water heaters. The initial investment for purchasing and installing a tankless system can be significant, which may deter some homeowners from opting for this technology.

Limitations on Simultaneous Usage

One drawback of tankless water heaters is their limitations on simultaneous hot water usage, especially in larger households. While these units provide endless hot water on demand, they may struggle to keep up with the hot water demands of multiple showers or appliances running simultaneously.

Need for Regular Maintenance

Regular maintenance is crucial for ensuring the optimal performance of tankless water heaters. Neglecting maintenance tasks such as descaling can lead to efficiency issues and potentially costly repairs down the line. Homeowners need to factor in ongoing maintenance costs when considering a tankless system.

Issues with Hard Water

Another common issue with tankless water heaters is the potential problems caused by hard water. Hard water contains high levels of minerals that can build up inside the unit over time, leading to reduced efficiency and even damage. Installing a water softener can help mitigate these issues, but it adds an extra cost to the overall investment.

Making the Right Installation Choice

Selecting Size

When choosing a tankless water heater, ensure it’s the right size for your household’s needs. Consider factors like the number of bathrooms and daily hot water usage.

Ensure you choose a unit that can meet your peak hot water demand without unnecessary oversizing. Oversized units can lead to inefficiency.

Long-Term Savings

Tankless water heaters are known for their energy efficiency. Consider the long-term energy savings when deciding on a water heater type.

While the initial cost of a tankless unit might be higher, the energy savings over time can make up for it. This is especially beneficial in the long run.

Professional Consultation

Consulting with professionals before installing a water heater is crucial. They can assess your home’s layout and hot water needs accurately.

Professionals can recommend the best location for installation to optimize efficiency and safety. Improper installation can lead to performance issues or safety hazards.

Maintenance Tips for Longevity

Regular Flushing

To ensure the longevity of your tankless water heater, it is crucial to flush the system regularly. This process helps in preventing mineral buildup, which can lead to decreased efficiency and performance over time. By flushing the system at least once a year, you can maintain optimal functionality and extend the lifespan of your water heater.

Professional Maintenance Checks

Scheduling professional maintenance checks for your tankless water heater is essential for maximizing its performance and efficiency. Professionals can inspect the system thoroughly, identify any potential issues early on, and make necessary adjustments to keep it running smoothly. By investing in regular professional maintenance, you can avoid costly repairs and ensure that your water heater operates efficiently for years to come.


Now that you have a clear picture of the costs and considerations involved in tankless water heater installation, you are better equipped to make an informed decision. Remember, the type of heater you choose, the installation factors at play, and the long-term benefits all play a crucial role in your decision-making process. While tankless water heaters offer energy efficiency and space-saving advantages, they do come with a higher upfront cost. By weighing these factors against your needs and budget, you can ensure a successful and cost-effective installation that meets your requirements.

As you move forward with your water heater installation plans, don’t forget to consult with professionals for personalized advice tailored to your specific situation. Taking the time to research, plan, and consider all aspects will lead to a more satisfactory outcome in the long run.

Frequently Asked Questions

What factors influence the cost of tankless water heater installation?

The cost varies based on the heater type, installation complexity, location, additional upgrades needed, and labor fees.

Are there benefits to choosing a tankless water heater over traditional models?

Tankless heaters offer energy efficiency, space-saving design, longer lifespan, endless hot water supply, and potential savings on utility bills.

What are the drawbacks of installing a tankless water heater?

Drawbacks include higher upfront costs, possible need for electrical upgrades, limited hot water flow rates for simultaneous use, and potential maintenance requirements.

How can I ensure longevity and efficiency of my tankless water heater after installation?

Regular maintenance such as descaling annually, checking for leaks or malfunctions, adjusting temperature settings as needed, and consulting a professional when issues arise can help maintain efficiency and prolong the unit’s lifespan.

How do I make an informed decision when choosing between tankless and traditional water heaters for installation?

Consider your household’s hot water needs, available space for installation, upfront budget vs. long-term savings goals, environmental impact preferences, and consult with a professional to determine the best option.


Get the complete guide to water heater installation cost, including tankless options. Compare average costs and find the best installation services.