The average cost to install a tankless water heater ranges from $1,000 to $3,000, including the unit and installation fees, depending on factors like location and complexity.
Installing a tankless water heater costs $1,000–$3,500 on average, with most homeowners spending around $2,800 for equipment and professional installation. This guide breaks down pricing factors, types, and long-term savings to help you make an informed decision.
2025 Tankless Water Heater Installation Costs
| Component | Cost Range |
|---|---|
| Electric Unit + Installation | $1,200–$2,500 |
| Gas Unit + Installation | $2,500–$3,500 |
| Propane Unit + Installation | $2,800–$4,000 |
| Labor Only (4-8 hours) | $600–$1,200 |
Why Costs Vary
Several factors impact your final price:
- Fuel type: Electric models are cheaper to install but cost more to operate
- Home modifications: Upgrading electrical panels or gas lines adds $500–$2,000
- Unit capacity: Whole-house models (8+ GPM) cost more than point-of-use units
- Brand: Premium brands like Rinnai command higher prices
Tankless vs. Traditional Water Heaters
Key Differences
Tankless units heat water on demand rather than storing hot water. This provides:
- Endless hot water supply
- 30-50% higher energy efficiency
- 20+ year lifespan (vs. 10-12 years for tanks)
- Compact size (about the size of a suitcase)
Long-Term Savings
While tankless heaters cost more upfront, they save $100–$300 annually on energy bills. According to the U.S. Department of Energy, switching can improve efficiency by 34%.
Installation Requirements
Electric Models
Need dedicated 240V circuit (30-50 amps). Older homes may require:
- Electrical panel upgrade ($1,000–$2,500)
- New wiring ($300–$800)
Gas Models
Require proper venting and gas line:
- New gas line installation: $500–$2,000
- Venting system: $300–$1,500
- Consider valve kits for easier maintenance
Top Brands & Price Ranges
| Brand | Type | Price Range |
|---|---|---|
| Rinnai | Gas | $1,000–$1,800 |
| EcoSmart | Electric | $500–$1,200 |
| Navien | Gas | $1,200–$2,000 |
| Stiebel Eltron | Electric | $700–$1,500 |
Maintenance Costs
Annual maintenance extends lifespan and efficiency:
- Professional flushing: $100–$200
- DIY flushing kits: $20–$50
- Replace heating elements: $50–$300
Rebates & Incentives
Many utilities and governments offer savings:
- Federal tax credits: Up to $300
- Local utility rebates: $100–$800
- ENERGY STAR discounts
Check the ENERGY STAR website for current programs in your area.
