The cost to install a tankless water heater typically ranges from $1,000 to $3,000, including the unit and installation fees, depending on various factors.
Installing a tankless water heater costs $1,000–$3,500 on average, with most homeowners spending around $2,650 for professional installation. The total price depends on unit type, fuel source, labor rates, and home modifications needed.
2025 Tankless Water Heater Installation Costs
Current market prices show these typical installation ranges:
| Component | Cost Range |
|---|---|
| Basic installation (existing setup) | $800–$1,500 |
| Complex installation (new gas/electrical) | $1,800–$3,500 |
| Whole-house gas unit + install | $3,000–$5,500 |
| Whole-house electric unit + install | $2,500–$4,000 |
Why Costs Vary
Several factors impact your final price:
- Fuel type: Gas models cost 15–25% more than electric
- Home size: Larger homes need higher GPM (gallons per minute) units
- Retrofitting: Older homes often need electrical/gas line upgrades
- Location: Urban areas have higher labor rates than rural ones
Tankless vs. Traditional Water Heaters
Tankless units heat water on demand rather than storing heated water. This provides several advantages:
Key Benefits
- Endless hot water supply
- 30–50% higher energy efficiency
- 20+ year lifespan (vs. 10–12 years for tanks)
- Compact size saves 10+ square feet
According to U.S. Department of Energy, tankless heaters can be 24–34% more energy efficient than conventional storage tank water heaters for homes that use 41 gallons or less of hot water daily.
Installation Requirements
Gas Models
Need proper venting (stainless steel pipes) and gas line upgrades. Many homes need:
- New ¾” gas line ($300–$800)
- Vent piping ($200–$500)
- Makeup air provisions ($150–$400)
Electric Models
Require significant electrical upgrades:
- New 240V circuit ($200–$600)
- Panel upgrade if needed ($800–$1,500)
- Heavy-gauge wiring ($150–$300)
For complex electrical work, consider our guide to finding licensed professionals who handle both plumbing and electrical requirements.
Top Brands and Prices
Popular tankless water heater brands with average installed costs:
| Brand | Type | Installed Cost |
|---|---|---|
| Rinnai | Gas | $3,000–$5,000 |
| Navien | Gas | $3,200–$5,500 |
| EcoSmart | Electric | $1,800–$3,200 |
| Stiebel Eltron | Electric | $2,500–$4,000 |
Maintenance Costs
Annual maintenance helps extend unit lifespan:
- Descaling service: $100–$200
- Filter cleaning: $50–$100
- Full system flush: $150–$300
For DIY maintenance, consider quality descaling pumps to handle mineral buildup in hard water areas.
Rebates and Tax Credits
Current incentives can reduce costs:
- Federal tax credit: Up to $300 for Energy Star models
- Local utility rebates: $100–$500 in many areas
- State programs: Varies by location (check DSIRE database)
The ENERGY STAR program maintains updated information on available federal tax credits for qualifying water heaters.
Is Tankless Right For You?
Tankless heaters work best for:
- Homes with high hot water demand
- Households with 3+ people
- Properties with limited space
- Owners planning long-term residence
For smaller needs, point-of-use electric models (like those in our small water heater guide) may be more cost-effective.
