How Much Does a Water Heater Cost?

A water heater typically costs between $650 to $2,500 for a traditional tank and between $1,200 and $3,500 for a tankless water heater. These costs include installation.

Average cost of a traditional tank-style water heater

A conventional tank-style water heater heats water electrically and stores the heated water in an insulated tank until it’s needed. These units come in a variety of sizes, last around 10 to 15 years and are the least expensive type of water heater^[0]

• The size of your water heater. The more gallons of water your tank can hold, the more the unit will generally cost.

• Fuel type. Electric, propane and natural gas water heaters have similar starting price points, but if you need to install a gas line or alter your electric system, this can raise your costs. High-end electric, solar and hybrid heat pump units tend to be the priciest.

• Type of water heater. Storage water heaters tend to be less expensive than tankless varieties.

• Water heater brand and features. Some brands, such as Rheem or A.O. Smith tend to be more expensive than brands like Whirlpool or Kenmore. Additionally, high-end features such as anti-scale mechanisms, smart controls and energy-saving tech may increase your total price.

• Venting system. A direct-vent model that uses an already-existing chimney is generally significantly less expensive than installing a power-vent unit.

Manufacturer warranties for storage tank water heaters vary from company to company, so it’s important to read the warranty of any water heater you’re considering. These warranties often last six years, but some may continue up to 12 years. Covered areas may include the inner tank, component parts, return of defective parts and labor, as long as there is no misuse, improper installation, tampering or damage from flooding or other extreme conditions — and different covered areas within the same warranty may have longer or shorter coverage periods.

Tankless water heater costs

Tankless water heaters deliver a constant, on-demand supply of hot water, without the need for a storage tank. These water heaters accomplish this through flashes of intense heat against water filled coils. Tankless water heaters are much smaller and have a longer lifespan (about 20 years) than storage tank models — and they also have the potential to use less energy, depending on the individual household’s water usage behaviors.

Tankless water heater costs range from about $1,200 to $3,500, with an average price of $2,500, including installation. Some factors that affect the cost of tankless water heaters include:

Tankless water heater warranties can extend as long as 25 years or even a limited lifetime period, but some manufacturers offer significantly shorter coverage periods. Be aware that different parts of your warranty coverage may have different coverage periods. As long as you’ve properly cared for your unit, areas covered by tankless water heater warranties may include:

• Labor to diagnose problems, and to repair or replace parts.

Because warranties can vary so much in coverage and duration, it makes sense to read the fine print on manufacturer warranties carefully before making a purchase.

Installation costs for water heaters

In general you can expect tankless water heaters to be more expensive to install than storage tank models, particularly if you’re replacing a tank model with a tankless one, because of the additional labor required for the conversion. The cost to install a water heater can range from $1,600 to $5,400 including the cost of a permit and code upgrades, according to Home Depot’s internal sales database data^[0]

• Labor costs. The more hours of electrical, carpentry and plumbing work that are required for your installation, (for example installing new electric, water or gas lines, or drywall) the higher your total water heater replacement costs.

• Location of unit. If your water heater needs to be installed in a spot that’s hard to access, such as in a very tight space, or up or down flights of stairs, this can add to the cost. Relocating your water heater also adds to the complexity and cost of installation.

• Permits. The cost of required permits will add to your total installation expense.

• Geographic area. Some areas of the country have higher average installation costs.

Using a reputable, experienced contractor for installation can help avoid commonly overlooked or forgotten during water heater installation. These include:

• Seismic mitigation strapping. If water heaters aren’t properly secured and an earthquake happens, this can cause broken gas lines, fires, broken water lines and flooding^[0]

• Plumbing codes. DIY installs may not take plumbing codes into consideration, resulting in code violations and possible fines, leaks or safety issues.

• Permits. Your town or city may require a permit for water heater installation, as well as secondary plumbing or electrical permits. Neglecting this could result in code violations and possible fines and safety issues.

• Voiding of warranty. DIY or improper installation could void your warranty.

• Improper location. Installing your water heater in a difficult-to-reach spot can make contractors reluctant or unwilling to service it if you have problems over the years. Additionally, certain locations are a code violation in and of themselves, due to possible CO emissions. Areas where water heaters are prohibited include storage closets, toilet rooms, bathrooms and bedrooms.