Tankless Water Heater Cost + Installation Prices ’20 – How Much?

Please note: This page may contain affiliate links. If you buy a product or service through such a link we earn a commission at no additional cost to you. Learn more about our product review process or check our FTC affiliate disclosure.

In comparison to storage tank systems, tankless water heaters are costlier upfront – meaning a higher price tag and more expensive installation.

However, operating costs are much lower due to almost zero standby losses which will save you money in the long run.

Above that, a tankless system lasts for up to 20 years, a traditional unit a mere 10 to 15.

So are tankless water heaters worth the cost? And how much does a tankless water heater plus installation cost anyway? Learn everything you need to know in our guide below!


In a Nutshell

Please keep in mind that most numbers on this page are estimates!

Depending on the scope of the project and who you ask, a new tankless water heater including installation can cost anywhere between $250 and more than $5,000 USD.

Now obviously, this is not really helpful, so let’s break this down in a little more detail:

Purchase & Installation

The price for a tankless gas water heater ranges from $100 USD for the smallest point-of-use unit to about $2,000 USD for a large whole house system that is highly efficient and has lots of extra features.

The price for an electric tankless water heater ranges from $100 USD, again point-of-use, to about $900 USD if you go whole house.

The average cost to install a tankless water heater is about $1,900 – $2,000 USD (although the cost to install an electric heater can be as low as $150 USD). This average includes expenses for labor, installation materials, permit pulling and warranty on labor.

How Much Does a Tankless Water Heater Cost?

How much is a tankless water heater? Answering this question is not as easy as it may seem. That’s because there are a variety of factors that we need to take into consideration:

  • Water heater type (gas vs. electric)
  • Unit size (how many gallons of hot water can be provided per minute)
  • Brand
  • Special features
  • Energy efficiency measured by Energy Factor (EF)
  • Length and scope of warranty on parts

Tankless Gas Water Heater Cost

Tankless gas water heaters are typically priced higher than their electric counterparts.

  • Tiny point-of-use (POU) units start at little more than $100 USD. With 35,000 BTU, they deliver about 1.5 to 2 gpm.
  • The largest residential whole house tankless gas water heaters have as much as 199,000 BTU providing up to 10 or 11 gpm. Cost: About $2,000 USD.
  • Most tankless gas water heater models cost between $500 and $1,200 USD with a max flow rate of 6 to about 11 gpm. BTU range from 70,000 to 199,000.

Electric Tankless Water Heater Cost

  • The smallest POU electric tankless water heaters cost roughly $100 USD. Their power output is 3 kW and their maximum rated water flow .5 to 1 gallon per minute. While most electric tankless water heaters require a 240 V power source, some models are designed for 120 V in this price segment.
  • The largest and most expensive residential electric tankless water heaters cost $800 to $900 USD. At 36 kW and 6 gpm max flow, they can provide enough water for entire homes.
  • Most electric tankless water heaters are priced at around $200 – $600 USD. Max flow rate: 2 – 6 gpm. Power output: 11 – 36 kW.

electric tankless water heater

You want to go electric but haven’t decided on a specific model yet? Find the best electric tankless water heater here! Follow this link for our sizing guide.

Commercial Tankless Water Heater Prices

240,000 BTU, 380,000 BTU – the price for commercial tankless water heaters goes into the thousands depending on your specific requirements. Therefore, it doesn’t really make sense to talk about estimates here. We recommend you contact a couple of suppliers in your area and continue from there.

Where to Buy a Tankless Hot Water Heater

Where to buy a tankless water heater?

Naturally, we always prefer to buy online, for example at Amazon or Home Depot, for the best prices.

But of course most manufacturers also distribute their hot water heaters through local dealers and/or licensed contractors. Another viable option are hardware and big-box stores.

Cost to Install a Tankless Water Heater

Generally speaking, electric water heaters are easier to install than gas. This is because the latter needs venting.

This can change, however, in case you have to rewire your home or upgrade your electrical system to meet the amperage requirements of your new electric water heater.

pipe wrench

It also matters if you are only replacing an old heater which needs to be removed but means that most or even all of the plumbing connections etc. already exist, if you plan to switch fuel sources, fixes required to comply with plumbing or electrical codes, and whether or not you want to upgrade from tank-based to on-demand.

In other words, how much the installation of a tankless water heater costs varies significantly. Apart from basic labor, other factors to take into account are:

  • Expenses for equipment, parts and accessories (mounting hardware, pipes, valves, fittings, …)
  • Permit cost
  • Length and scope of warranty on labor

Gas Tankless Water Heater Installation Cost

ScenarioLaborMaterialTotal Cost
Full installation (mounting, cold and hot water connections, gas line, venting)About 8 (10) hoursCopper/flex piping, gas piping and kit, vent piping and kit, valves, fittings, mounting hardware, …$1,000 – $1,700 USD
Replacement of old water heater, already existing gas line + venting can be used3 – 4 hoursGas kit, vent kit, valves, fittings, mounting hardware, …$200 – $700 USD
Other Cost FactorsPricing
Upgrade to larger gas pipe diameter~$500 USD
New venting system$150 – $600 USD
Removal and disposal of old water heater$100 – $300 USD

 Electric Tankless Water Heater Installation Cost

ScenarioLaborMaterialTotal Cost
Full installation (cold and hot water connections, electrical connection)2 – 5 hoursCopper/flex piping, valves, fittings, mounting hardware, …$150 – $750 USD
Replacement of old water heater, already existing water lines can be used1 – 3 hoursValves, fittings, mounting hardware, …$150 – $250 USD
Other Cost FactorsPricing
Outlet must be installed and wired back to electrical panel$100 – $200 USD
Home rewiring$,$$$

Cost Estimates & Hiring

Of course, it is impossible to cover every single scenario here, so contacting 3 or 4 companies in your area to ask for price estimates is probably the best idea.

Pro tip: Look for contractors that are licensed and insured, have been in business for years and that offer warranty on their labor. An A+ rating on the BBB website and other directories is also a good indicator for a reputable service provider.

Cost per Year

Gas & Electricity Cost

Depending on your type of tankless water heater, gas or electricity will make up your main operating cost, obviously. And the more hot water you consume, the higher your bills are going to get.

Gas vs. electricity – which one is more affordable? As a rule of thumb, a gas water heater will cost about a third less to run than an electric unit, although this also depends on utility cost in your area.

Another deciding factor is temperature rise which is determined by feed water temperature as well as output temp settings. Now, there isn’t much you can do about inlet water temp except for moving to a warmer climate. But you can adjust your water heater’s thermostat to the minimum output temperature you feel comfortable with.

Propane & Natural Gas Prizes

Annual cost to operate a gas tankless water heater ranges from less than $200 USD up to $500 USD. System efficiency plays a minor role only.

Powered from a utility supply line, natural gas is the less expensive option. Propane, on the other hand, is the more efficient fuel with much higher BTU but needs to be purchased independently. For natural gas as well as propane prices vary by region.

Electricity Prizes

Annual cost to operate an electric tankless water heater ranges from less than $100 USD up to $300 USD and higher. System efficiency can be neglected.


Tankless Water Heater Maintenance Cost

When it comes to maintaining a tankless water heater, all that an electric/gas unit needs to perform at its peak is occasional descaling a.k.a. deliming and flushing of the heating elements. This usually has to be done once every 12 months, depending on your water hardness and usage.

FYI: You don’t really have to worry about descaling if you have a softener installed upstream of your instant hot water heater. What’s more, the involved steps are not overly complicated, so you could do this yourself in order to save a few bucks. However, you would need to buy a system descaler kit which retails at about $120 USD.

Maintenance performed by a plumber takes 1 to 2 hours. Expect to pay between $50 and $120 USD for this.

Are Tankless Water Heaters Worth the Cost?

As mentioned in the introduction, compared to a storage tank system, a tankless water heater is a costly upfront investment. But it cuts recurring costs by a large margin due to almost zero standby losses – unlike storage tank systems.

Depending on how much hot water you use on an average day, on-demand water heaters can be about 30 percent more energy efficient, says the U.S. Department of Energy.

And yet still, the question remains: Are tankless water heaters worth the cost?

Cost Savings

Water heating is the second largest energy end use in homes (…). It accounts for 16.8 percent of residential energy consumption and can cost a household anywhere from $200 to $600 a year”. (Source)

A typical family of four using 64 gallons of hot water a day can save about $115 USD annually, when switching from gas tank-based to gas tankless. If you are using lots of hot water, about 85 gallons a day, energy savings of 8 – 14 percent are realistic.

With electric heaters the cost savings are a little bit less, but so are the initial expenses.

All in all, tankless water heaters have a very long payback period, roughly 20 years, which is about as long as the average system lasts.

comment banner

If you have any questions about the cost of a tankless water heater please don’t hesitate to leave a comment below!

About the Author Gene Fitzgerald

Gene Fitzgerald has been with BOS since the very beginning. She is head of content creation and has fully immersed herself into the home water treatment industry only to become an expert herself. Outside of BOS, Gene loves reading books on philosophy & social issues, making music, and hiking.
Learn more about .


Leave a Comment:

Emilio Morales says 7 months ago

Thanks for all INF very helpfully tanks for take you time on very good detailing

    Gene says 6 months ago

    Emilio, you are most welcome!

Add Your Reply

Want cleaner, safer and healthier water?

Sign up to join 1,000+ subscribers and get notified about new BOS guides & checklists as well as exclusive product sales and discount codes.