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Plumber Installing Water Heater in Bathroom

Are you tired of running out of hot water in the middle of a shower or waiting endlessly for the water heater to refill? If so, a tankless water heater might be the solution you've been searching for. Not only do tankless water heaters provide a continuous hot water supply, but they also boast energy efficiency and space-saving benefits.

However, before diving into this upgrade, it's crucial to understand the installation costs associated with these systems. In this blog post, we'll cover everything you need to know about tankless water heater installation costs, helping you make an informed decision for your home.

What is a tankless water heater?

A tankless water heater, also known as an on-demand water heater, heats water directly as it flows through the unit. Unlike traditional water heaters that store and continuously heat a large volume of water, tankless models heat water instantly when you turn on the faucet. This means you get hot water on demand without needing a storage tank.

Installation cost factors

Several factors contribute to the overall cost of installing a tankless water heater. Understanding these factors will give you a clearer picture of what to expect regarding expenses.

  1. Type of Tankless Water Heater: Two main tankless water heaters are electric and gas-powered. Electric models are less expensive upfront but might require a more substantial electrical upgrade in your home. Gas-powered units often have higher upfront costs due to the need for gas lines and ventilation systems.
  2. Unit Size and Capacity: The size and capacity of the tankless water heater affect its cost. Larger units providing hot water to multiple fixtures simultaneously will generally cost more.
  3. Installation Complexity: The complexity of the installation process also impacts the cost. Retrofitting a tankless water heater into an existing plumbing system might require more labor and materials than installing one during new construction.
  4. Additional Equipment: Depending on your home's configuration, you might need additional equipment such as a gas line, exhaust vent or upgraded electrical wiring. These can add to the overall installation cost.
  5. Labor Costs: Labor costs can vary based on your location and the complexity of the installation. Hiring a professional plumber or HVAC technician guarantees the correct and safe system installation.

Average installation costs

Depending on various factors, the installation cost for a tankless water heater typically falls between $1,000 and $3,000 or even higher. To break down the expenses further:

The installation cost for electric tankless water heaters is generally on the lower end of this range, ranging from $1,000 to $2,000. However, it's important to consider potential additional expenses, as you might need to upgrade your electrical system to handle the increased power demand of the unit, which could contribute to the overall cost.

On the other hand, gas-powered tankless water heaters come with higher installation costs due to the requirements for gas lines and proper ventilation. The installation expenses for these models can range from around $1,500 to $3,000 or even more, based on specific circumstances and installation complexities.

It's crucial to note that these figures are approximations and can fluctuate depending on location, specific unit features and installation intricacies. To make an informed decision, obtaining multiple quotes from reputable contractors is advisable, enabling you to gauge the precise cost and options available.

Long-term savings

While the upfront installation cost of a tankless water heater might seem significant, it's essential to consider the long-term savings they can offer. Tankless units are more energy-efficient than traditional storage tank water heaters because they only heat water as needed. This efficiency can lower energy bills, helping you recoup some of the initial investment.

Additionally, tankless water heaters typically have a longer lifespan than traditional units. While traditional water heaters may need replacement every 10-15 years, tankless units can last 20 years or more with proper maintenance. This extended lifespan can provide further value over time.


Investing in a tankless water heater can bring numerous benefits to your home, including a continuous hot water supply, energy savings and space efficiency. While the installation costs vary based on several factors, the long-term advantages often outweigh the initial expenses. Working with a professional plumber or HVAC technician is recommended to ensure a smooth installation process and optimal performance. By understanding the installation costs associated with tankless water heaters and considering their long-term benefits, you can make an informed decision that suits both your budget and your household's hot water needs.