How Much Does a Tankless Water Heater Cost?

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In comparison to storage water heaters, tankless systems 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 unit lasts for up to 20 years, a traditional system 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!

Key Takeaways

  • The price for a tankless gas water heater starts at $100 for a tiny point-of-use system (1.5-2.0 gallons per minute), and about $2,000 for the largest residential whole house unit (10.0-11.0 gpm).
  • Electric tankless water heaters cost about $100 for the smallest POU device (0.5-1-0 gpm), with the largest and most expensive residential models costing up to $900 (6.0 gpm).  

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.

For a more detailed cost overview please continue reading.

Tankless Water Heater Cost Factors

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 tankless water heater cost factors we need to take into consideration. They include:

  • System type (fuel type, point of entry or point of use, etc.)
  • Unit size (how many gallons of hot water can be provided per minute)
  • Energy efficiency measured by Energy Factor (EF)
  • Special features
  • Length and scope of warranty on parts
  • Brand

Whole House vs. Single Point

Whole house vs. single point of use (POU) makes a huge difference, obviously. A whole house tankless water heater needs to be a lot bigger than a unit providing hot water for a single faucet or shower only.

For comparison, POE electric tankless water heaters have between roughly 10 and 35 kW, whereas a POU unit may have no more than 3 kW.

Gas Fired vs. Electric Heaters

Generally speaking, tankless gas units are priced higher than their electric counterparts.

Natural Gas vs. Propane

Natural gas vs. propane does not make a difference in terms of initial purchase price of the water heating system. However, natural gas itself is the less expensive option. At the same time, propane is more energy efficient.

Oil and Solar Water Heaters

For sake of completeness we wanted to mention oil and solar fueled tankless water heaters. They are both quite rare and within the same price range as gas fueled water heaters.

Tankless Water Heater Prices

Tankless Gas Water Heater Prices

  • Tiny point-of-use systems start at little more than $100 USD. With 35,000 BTU – BTU stands for “British Thermal Unit” and measures a system’s heating power) – they deliver about 1.5 to 2 gallons of water per minute.
  • 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 units cost between $500 and $1,200 USD with max flow rates of 6 to about 11 gpm. BTU range from 70,000 to 199,000.

Our #1 Whole House Gas Tankless Water Heater: Rinnai

  • Excellent Quality
  • Endless Hot Water for Homes with Up to 2½ Bathrooms (6.5 gpm Max Flow Rate)
  • Available for Both Natural Gas and Propane
  • Mobile App Gives You Full Remote Control

For Point of Use: Marey GA10LP Power

  • Solid Price-Performance Ratio
  • Up to 3.1 gpm is Ideal for POU Applications
  • Compact and Space-Saving to Install Almost Anywhere
  • Lets You Adjust Gas and Water Flow to Meet Your Needs
  • 5-Year Warranty

Electric Tankless Water Heater Prices

  • 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 units are priced at around $200 – $600 USD. Max flow rate: 2 – 6 gpm. Power output: 11 – 36 kW.

#1 Whole House Electric System: Stiebel Eltron

  • Excellent Performance
  • Large Enough to Feed 2 Showers
  • Many Different Sizes Available
  • Easy Temperature Control
  • Water Heater is Really Quiet
  • Self-Modulation for Maximum Energy Efficiency (EF = 0.99)
  • → Read Full Review

For Point of Use: Rheem RTEX-13

  • Ideal for Single Bathroom or Weekend Cabin
  • Self-Modulating to Save Energy
  • Output Temperature Can Be Easily Adjusted Using Dial Control
  • Space-Saving Design
  • 5-Year Warranty
  • → Read Full Review

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

Commercial Tankless Water Heater Prices

240,000 BTU or 380,000 BTU or more – 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.

Price Comparison by Brand

Brand & Model Price Range
Ecosmart $140-500 USD
Rinnai natural gas fired tankless heaters $700-2,100 USD
Rinnai propane gas fired tankless heaters $700-1,900 USD
Rheem electric $170-500 USD
Rheem gas fired tankless heaters $500-2,000 USD
Bosch ProTL 175N $1,200 USD
Bosch Tronic 3000 T $150 USD
Stiebel Eltron Tempra Plus $500-850 USD
Camplux CA528 $450 USD
Noritz NRC66DVNG $800-900 USD
Rinkmo 18KW 240V $350 USD

Average Tankless Water Heater Installation Cost

Labor and Other Installation Costs

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.

plumbing wrenches

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 – Permits are required by most regions to install a new water heater. Contact your town or city for more info.
  • Length and scope of warranty on labor

Example 1: Gas Tankless Water Heater Costs

(Mobile Hint: Swipe to Scroll)

Scenario Labor Material Total Cost
Full installation (mounting, hot and cold water connections, gas line, venting) About 8 (10) hours Copper/flex piping, gas piping and kit, vent piping and kit, valves, fittings, mounting hardware, … $1,000 – $1,700 USD
Replacement of old tankless unit, already existing gas line + venting can be used 3 – 4 hours Gas kit, vent kit, valves, fittings, mounting hardware, … $200 – $700 USD
Other Cost Factors Pricing
Upgrade to larger gas pipe diameter ~$500 USD
New venting system $150 – $600 USD
Removal and disposal of old water heater $100 – $300 USD

Example 2: Electric Tankless Water Heater Costs

(Mobile Hint: Swipe to Scroll)

Scenario Labor Material Total Cost
Full system installation (cold and hot water connections, electrical connection) 2 – 5 hours Copper/flex piping, valves, fittings, mounting hardware, … $150 – $750 USD
Replacement of old water heater, already existing water lines can be used 1 – 3 hours Valves, fittings, mounting hardware, … $150 – $250 USD
Other Cost Factors Pricing
Outlet must be installed and wired back to electrical panel $100 – $200 USD
Home rewiring $,$$$

Cost to Remove or Replace a Tankless Water Heater

Removing or replacing an existing tankless water heater shouldn’t be too expensive in most cases. That said, as with regular system installation, the cost for replacing a tankless hot water heater depends a lot on the circumstances.

Hiring a Pro

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.

Yearly Operating & Maintenance Costs

Gas & Electricity

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

The cost to operate a gas tankless water heater ranges from less than $200 USD up to $500 USD per year. 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.


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.

Overhead Line

Tankless Water Heater Maintenance Cost

When it comes to maintaining a tankless unit, all that an electric/gas water heater 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 hard water level and water use.

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 Investment?

Tankless Units vs. Traditional Water Heaters

As mentioned in the introduction, compared to a traditional water heater, 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 that heat water 24/7.

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?

Average 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 per 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 average 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.

Tankless Water Heaters – Pros and Cons

What are the pros and cons of installing a tankless water heater in your home?


The benefits of tankless water heaters are:

  1. They are more energy efficient compared to traditional water heaters. That’s because they don’t store any hot water which eliminates standby losses. The heating happens instantaneously saving up to 30% more energy.
  2. Heating water on demand also means that you can never run out of hot water. The supply is endless.
  3. Tankless water heaters are compact and therefore easy to install in tight corners. You’ll also save space in your basement or wherever you want to put your new water heater.
  4. They are easy to prepare for winter season.
  5. Like we said, a tankless system lasts for up to 20 years, a traditional water heater with tank no more than 15.


Disadvantages of tankless water heaters include:

  1. Both purchase and installation are more costly upfront. As a consequence, the payback takes a while.
  2. Tankless water heaters are sensitive to slow flow.
  3. Electric tankless units are limited by how much hot water they can provide at any given time. Even the largest models for home use can barely heat more than 6 gallons per minute under ideal circumstances.

Where to Buy a Tankless Hot Water Heater

Where is the best place to buy a new 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 can be hardware and big-box stores.

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 Alexandra Uta

Alex is a content writer with an affinity for research and a methodical attention to detail. Since 2020, she has fully immersed herself into the home water treatment industry only to become an expert herself. Alex has been using water filters and similar products for years which has gained her lots of hands-on experience.
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Leave a Comment:

Emilio Morales says February 11, 2020

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

    Gene says February 26, 2020

    Emilio, you are most welcome!

Clare says February 20, 2022

Our hot water heater is at least 26 years old. I know we are on borrowed time and I was doing research on tankless water heaters and came across your article. I was prepared to spend the extra money upfront but I saw one of the cons of getting one being that they are sensitive to slow water flow. We have a few faucets with slow water flow and I was planning on hiring a plumber to find out why we have this issue. My concern is what if it cannot be fixed–should this be a deal breaker on getting the tankless water heater?

    Gene says June 15, 2022

    Thanks for your question Clare. It’s probably best if you discuss this with the manufacturers directly. Maybe the flow is sufficient.

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