How Much Does It Cost to Install a Tankless Water Heater?
The cost of installing a tankless water heater can vary based on the type of unit, labor, and other factors. In most cases, you’ll see a broad range depending on whether it’s electric or gas and how complex the job is. Most people can expect to invest a moderate to high amount for a full professional installation.
Price Breakdown: Equipment, Labor & Other Costs
When you’re budgeting for a tankless water heater installation, it’s important to break the cost down into its parts. You’re not just paying for the unit itself; you’re also covering professional labor, permits, parts, and sometimes even changes to your existing plumbing or electrical system.
1. Equipment Cost
The price of the tankless water heater is the first big variable. There are electric models and gas models, and the price difference between them can be significant. Higher-capacity units or those with premium features like smart controls will naturally cost more. But it’s not always about buying the most expensive model; choosing the right size for your household is what truly matters.
2. Labor and Installation
Labor makes up a large part of the overall cost. A straightforward replacement of an old tank heater with a new tankless model may be simpler. But if your installer needs to reroute gas lines, upgrade your electrical system, or make changes to ventilation, the labor hours and your final bill can climb.
3. Permits, Parts & Miscellaneous Fees
Depending on where you live, a permit may be required for water heater installations. Add in costs for mounting hardware, piping, venting materials, or electrical components, and it becomes clear how these smaller items add up.
Let me tell you about a buddy of mine who recently switched to a tankless system. He thought the online price for the heater was all he needed to worry about. But once the contractor visited, they had to upgrade his gas line and install new venting through a brick wall. That added several hundred dollars, not because he was upsold, but because it was necessary for safety and function. If he’d known that upfront, he said he would’ve planned the project differently.
4. Typical Cost Distribution Table
Here’s a general idea of how the total cost is often distributed:
| Component | % of Total Cost |
| Equipment (Heater Unit) | 40% – 50% |
| Labor & Installation | 30% – 40% |
| Permits & Parts | 10% – 20% |
Understanding where your money is going can help you ask smarter questions and avoid surprise charges. Up next, let’s compare the costs between electric and gas models so you can make the right call for your home.
Electric vs. Gas Tankless Water Heaters: What’s Cheaper to Install?
Choosing between electric and gas tankless water heaters isn’t just about how they work; it also affects how much you’ll spend on installation. Each option has its own pros, challenges, and hidden costs that many people overlook until installation day.
Upfront Installation Differences
The installation process for electric tankless units is usually simpler. Since they don’t require ventilation or gas lines, they can often be mounted anywhere there’s enough electrical capacity. On the other hand, gas units might require venting through walls or the roof, and sometimes even a full gas line upgrade.
Electric tankless units tend to cost less to install in homes that already have sufficient electrical service. However, if your electrical panel isn’t strong enough, you could face extra charges to upgrade it.
Gas units usually have higher installation costs because they involve more complex work. If your home already uses gas appliances, this can reduce the labor, but if not, expect a bigger project.
Long-Term Efficiency vs. Setup Cost
While electric units are easier on your wallet during installation, gas heaters often offer lower long-term energy costs in areas where gas is cheaper than electricity. But you’ll need to weigh this against the initial investment and maintenance needs.
Key Comparison Points
Here’s a breakdown of the main differences:
- Electric Tankless Water Heaters
- Lower installation costs in most cases
- No need for venting or gas lines
- May require an electrical panel upgrade
- Often better for small to medium homes
- Lower installation costs in most cases
- Gas Tankless Water Heaters
- Higher upfront installation cost
- Requires a proper ventilation setup
- Works well for larger households
- Potentially lower utility bills over time (where gas is cheaper)
- Higher upfront installation cost
Which One Is Right for You?
If your home already has natural gas and proper venting, a gas model might be the better long-term choice. But if you’re looking for an easier install with fewer complications, electric may be the way to go.
Just remember: cheaper to install doesn’t always mean cheaper in the long run. It’s about finding the balance between installation cost, energy usage, and your home’s current setup. In the next section, we’ll cover how your home’s water demand, measured in GPM, can shift your cost significantly.
Flow Rate Matters: Why GPM Affects Your Price
One of the most overlooked details when shopping for a tankless water heater is GPM, or gallons per minute. This little number packs a big punch; it tells you how much hot water the unit can produce at once, and it’s directly tied to both the price of the unit and the cost to install it.
What Is GPM and Why Should You Care?
GPM measures how much hot water your heater can supply at one time. A small 1–2 GPM unit might only support a single faucet or shower running at once. A 6–8 GPM unit could handle multiple fixtures, like a shower, dishwasher, and washing machine, all running together.
If you have a larger household or simply want the ability to multitask without losing hot water pressure, you’ll need a higher-GPM unit. But here’s the catch: higher flow rates require more powerful units, which come with a higher price tag and can be more complex to install.
How GPM Impacts Installation Cost
- Larger units often require more space for safe installation.
- Higher-GPM models may need stronger gas lines or electrical upgrades.
- They might also need more advanced venting or plumbing adjustments.
This means you’re not just paying more for the unit, you’re also looking at a pricier installation job.
What’s the Right GPM for Your Home?
Choosing the right GPM depends on your daily usage:
- 1–2 GPM: Best for small households with minimal simultaneous hot water use.
- 3–5 GPM: Suitable for typical families using one or two fixtures at once.
- 6+ GPM: Ideal for large homes or busy families who use multiple hot water outlets at the same time.
Installing a unit with too low a GPM could leave you with lukewarm water during peak times, while overspending on a high-capacity model could hurt your budget without offering any real benefit.
To keep your costs smart and your water hot, always match your GPM to your real-world needs. Up next, I’ll walk you through the biggest factors that influence installation costs, some of which most people don’t even think about until the bill arrives.
Factors That Influence Installation Cost
When it comes to tankless water heater installation, there’s no one-size-fits-all price. Several factors quietly shape the final cost, and if you’re not prepared for them, the bill can be a surprise. Let’s break down the most common ones so you can plan smarter and avoid unnecessary expenses.
1. Home Size and Water Usage
Larger homes usually require higher-capacity units to keep up with demand. That often means a bigger unit, more installation work, and potentially multiple units to serve different areas of the home.
- More bathrooms = higher flow needs
- Larger systems may require extra labor to install
If your home has a long distance between the water heater and fixtures, installers might also recommend additional plumbing work to improve efficiency.
2. Existing Plumbing and Electrical Setup
The condition of your current plumbing and electrical systems makes a big difference. If you’re replacing a traditional tank heater, and your home doesn’t have the proper setup for a tankless unit, expect additional charges.
- Upgrading gas lines or installing new venting adds to the cost of gas units
- Panel upgrades may be needed for electric models
Sometimes, even just relocating the unit for better access or safety can increase labor time and material costs.
3. Fuel Type and Location of Installation
Electric units are usually simpler to install, especially in homes with modern electrical systems. But if you’re installing a gas unit in an area without existing gas infrastructure, costs can rise quickly due to line installation and ventilation.
Also, where in your home the unit is installed matters. Tight crawlspaces or high-wall mounts make the job more complex and time-consuming.
4. Local Regulations and Permit Fees
Some areas require specific permits for installing or replacing water heaters. These fees vary depending on local building codes and can affect your final cost.
- Permit costs may also include inspection fees
- Licensed installers usually handle this, but it’s still part of your total expense
5. Experience of the Installer
Finally, don’t overlook the installer’s experience and reputation. More skilled professionals might charge a bit more, but they often save you money in the long run by avoiding mistakes or repeat visits.
Each of these factors can shift your installation cost up or down. In the next section, we’ll explore what it might cost to maintain and repair your system down the line, because the price doesn’t stop at installation.
Cost of Maintenance and Repair Services
Installing a tankless water heater is just the beginning; keeping it running smoothly requires a bit of maintenance. While these systems are known for their efficiency and durability, ignoring routine care can lead to costly repairs. Let’s go over what typical upkeep looks like and what you might expect to pay over time.
Routine Maintenance Costs
Tankless water heaters don’t need a lot of attention, but regular servicing helps them perform at their best. The most common maintenance task is descaling or flushing the system to remove mineral buildup, especially in areas with hard water.
- Annual descaling is often recommended by manufacturers
- Professional flushing services are affordable and quick
- DIY kits are available, but using a professional is safer if you’re not experienced
Skipping maintenance can lead to a drop in performance and, over time, cause internal damage that’s expensive to fix.
Common Repairs and Their Costs
Even with good maintenance, things can go wrong, just like with any home system. Some of the most common repair needs include:
- Ignition or flame failure issues
- Sensor or valve replacement
- Leaks from internal components
These repairs can vary in cost depending on how complex the issue is and whether parts are under warranty. Some homeowners also need to replace worn-out components after several years of use, especially if the system wasn’t regularly serviced.
Service Call Fees
Plumbers and HVAC technicians typically charge a service fee just to inspect your unit. This fee is sometimes waived if you proceed with the repair, but not always. It’s a good idea to ask in advance so you’re not caught off guard.
Warranties Help, but Read the Fine Print
Most tankless water heaters come with a manufacturer’s warranty, often covering parts for several years. Labor may not be included, though. Be sure to:
- Register your unit after installation
- Use a licensed professional for maintenance to keep your warranty valid
Keeping your system in top shape doesn’t have to cost a lot, but it does require a little planning.
According to the U.S. Department of Energy, demand‑type water heaters can be 24 %–34 % more energy efficient in homes that use less hot water, and still offer efficiency gains in higher-use homes.
Final Thoughts: What I’d Do If I Were You
If I had to do it all over again, I’d focus less on the sticker price and more on what my home actually needs. A tankless water heater can be a great upgrade if it’s sized right, installed professionally, and maintained regularly. Don’t just pick the cheapest model or installer. Ask questions, compare total costs, and think long-term. Whether you go electric or gas, the key is making a smart, informed choice that fits your lifestyle and usage. A little planning now can save you from stress, cold showers, and unexpected expenses later on.
Ready for Expert Installation?
If you’re looking for a smooth, reliable tankless water heater installation backed by real professionals, Richmond Air has you covered. Their team knows what works for your home and your budget, and they handle everything from permits to cleanup.
Schedule your tankless water heater installation with Richmond Air today and get expert service trusted by homeowners across the area.
FAQs: Tankless Water Heater Costs
Let’s answer some of the most common questions people have when considering a tankless water heater. These are the things that don’t always come up during a sales call but can make a big difference in your decision.
How long does it take to install a tankless water heater?
Most installations take one day or less, depending on the complexity. If your home already has the necessary electrical or gas infrastructure, the process is fairly quick. If extra work is needed, like venting or line upgrades, it might take longer.
Do I need a permit to install one?
In many areas, yes. Permits are typically required for water heater installations to ensure everything meets safety and building codes. Licensed installers usually handle the permit process, but it’s smart to ask upfront.
What size tankless water heater do I need for a family of 4?
Most families of four need a unit with at least 7–9 GPM, especially if multiple people shower at once or use hot water in different parts of the home simultaneously. Sizing it right is key to avoiding cold-water surprises.
Are there any rebates or tax credits for installing a tankless unit?
Yes, there are often local or federal incentives for energy-efficient upgrades like tankless water heaters. These change from time to time, so it’s worth checking with your utility provider or installer before making a purchase.
How long does a tankless water heater last?
With proper maintenance, tankless systems can last 15 to 20 years or more. That’s significantly longer than most traditional tank heaters, making it a solid long-term investment if you plan to stay in your home.
