The cost of a tankless water heater typically ranges from $1,000 to $3,000, including installation, depending on the model and home requirements.
Tankless water heaters provide endless hot water while saving space and energy. But their upfront costs can be higher than traditional tank models. This guide breaks down all expenses – from unit prices to installation and long-term savings – so you can make an informed decision.
Tankless Water Heater Price Ranges
Tankless water heater costs vary by fuel type, flow rate, and features. Here’s what to expect:
| Type | Unit Cost | Installed Cost |
|---|---|---|
| Electric Point-of-Use | $150-$500 | $300-$800 |
| Whole-House Electric | $500-$1,500 | $800-$2,000 |
| Gas (Natural/LP) | $1,000-$2,000 | $1,500-$3,500 |
| High-End Condensing | $2,000-$4,500 | $3,000-$6,000 |
For comparison, traditional tank water heaters typically cost $300-$1,600 installed. While tankless models cost more upfront, they last 5-10 years longer and use less energy.
Key Cost Factors
1. Fuel Type
Gas models (natural gas or propane) cost more than electric but provide higher flow rates. Electric units are cheaper but may require panel upgrades.
2. Flow Rate (GPM)
Measured in gallons per minute (GPM), higher flow rates cost more:
- 2-3 GPM (point-of-use): $150-$500
- 5-7 GPM (small home): $500-$1,200
- 8-11 GPM (large home): $1,200-$2,500
3. Installation Complexity
Retrofitting a tankless system often requires:
- Gas line upgrades ($200-$1,000)
- Electrical upgrades ($500-$2,000)
- Venting modifications ($300-$1,500)
For gas models, you may need a specialized valve kit for proper installation.
Long-Term Savings
While tankless heaters cost more initially, they offer significant savings over time:
Energy Savings
According to Energy.gov, tankless heaters are 24%-34% more efficient than tank models for homes using under 41 gallons daily.
Lifespan
Tankless units last 20+ years vs. 10-15 for tank heaters. This means you’ll avoid 1-2 replacement cycles.
Maintenance
Annual descaling (about $100) keeps tankless units running efficiently. Tank heaters need more frequent maintenance like anode rod replacements.
Top Brands and Models
Popular tankless water heater brands include:
- Rinnai: Premium gas models ($1,200-$2,500)
- Navien: High-efficiency condensing units ($1,500-$3,000)
- EcoSmart: Affordable electric models ($200-$700)
- Rheem: Mid-range gas/electric ($800-$2,000)
For small applications, consider compact on-demand heaters that fit under sinks.
Is Tankless Right For You?
Tankless water heaters make the most sense when:
- You have high hot water demand
- Space is limited
- You plan to stay in your home long-term
- Energy efficiency is a priority
For smaller households or rental properties, a traditional tank heater may be more cost-effective. Always get multiple quotes and consider both upfront and long-term costs before deciding.
