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How Much Does It Cost to Install a Water Heater? (2024 Price Guide)

Condensing Water Heater_shutterstock_Alhim

Condensing Water Heater_shutterstock_Alhim
Image Credit By: Alhim, shutterstock

An essential household appliance, water heaters give us warm and hot water through every indoor faucet in our homes. The appliance itself tends to be expensive, but don’t forget to also budget in what it costs to install it.

The cost of a water heater installation depends on several factors. Generally, the cost to install a water heater is anywhere from 1,000 to 3,000 dollars. That’s not cheap!

Luckily, you have some wiggle room depending on what features you’d like to include in your water heater installation. You can read through our guide and decide which features are most important to you and how they make the cost of your water heater installation higher or lower.

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Tank or Tankless water heater?

There are two main types of water heaters you can have installed in your home, a big tank water heater or a smaller tankless water heater. What you choose will determine what you spend up front and what you end up saving in the long run.

Tank Water Heaters

tank water heating system
Image Credit: nikkytok, Shutterstock

A tank water heater works by heating a large 20-to-80-gallon tank full of water that can go throughout your household. They can be powered by gas or electricity. Out of the two main types of water heaters, this is the cheaper to purchase up front, however, they can end up being more costly if they need repair or maintenance.

Installing a tank water heater will cost between $1,300 to $2,000.

Tankless Water Heaters

tankless water heater in the wall
Image Credit: Volodymyr Shtun, Shutterstock

A tankless water heater is mounted on your wall and heats water on-demand (it’s also called an on-demand water heater). It can be powered by gas or electricity. When you turn on the hot water part of the faucet in your home, the tankless water heater will start to heat the water you need. There’s no reservoir that already has hot water in it, which is thought to be better for environmental reasons.

Installing a tankless water heater will cost between $1,200 to $5,000.

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Factors That Influence Water Heater Installation Cost

Whether you choose a tank or tankless water heater, you will still need to consider a few other details when sussing out how much the installation process will cost you.

Tank Size

This factor only applies to tank water heaters. What size of tank does your household need? A bigger water tank will cost more than a smaller one.

Gas vs Electric Water Heaters

Consider how you will power your water heater. Electric-powered water heaters are cheaper to install than gas-powered, but gas water heaters will cost less to run. Some manufacturers make hybrid models, where they can be powered by gas or electricity. These are the most expensive kinds.

Energy Efficiency

Most water heaters will have an energy efficiency rating. The lower the rating, the more advanced technology the water heater has, therefore making the cost go up. However, in the long run, these more efficient water heater tanks will save you on your gas or electric bill.


Sometimes a permit from your city government is required to install a new water heater. Check your local city website to see if this is the case for you, and to look at the prices of these permits.

Removal of Old Water Heater

Check ahead of time to see if your water heater installer will also get rid of your old water heater, and if they charge you extra for this service.

Renovation of Space for New Water Heater

There are several things to think about here. If you are purchasing a gas water heater, but your old one was electric, will you need to move gas lines? Where can you put the water heater so it’s close to existing gas lines? To install the new heater, will you have to move other appliances, like the furnace or washing machine? Is the plumbing in your house up to code? All of these factors play into your overall installation cost.


Check the warranty of your new water heater. If you want an extended warranty, longer than the one it comes with, you will have to purchase it. The store that sells you the water heater will most likely have this option.

Regional Costs

Depending on where you live in the country, the installation cost will go up or down. For example, the New Jersey Metro area is one of the cheapest places to install a tankless water heater, while the Pacific North is one of the most expensive places to have a tank water heater installed.

Professional Installation

Paying a professional to install your water heater will obviously cost more than installing it yourself. You can, however, have peace of mind knowing that an expert is installing your water heater correctly.

tankless water heater
Image Credit: Pixabay

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A new water heater is an investment made into your home effective for the next several years. It is costly, but now you know all the different factors playing into the overall installation cost. Hopefully you are able to tell now which features are most important to you, and where you can cut corners on cost.

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Featured Image Credit: Narah, Shutterstock


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