How Much Does a Tankless Water Heater Cost?

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Considering making the switch to a tankless water heater? Here, we’ll discuss the average tankless water heater cost.

πŸ“Œ Tankless water heaters cost $250 to upwards of $5,000, depending on the type of heater, your local cost of living, the unit size, the brand, and the unit’s energy efficiency.

In this guide, we’ve broken down:

  • The cost of various types of tankless water heaters
  • The cost to install a tankless water heater
  • The annual maintenance costs of a tankless water heater
  • The cost of a tankless vs traditional water heater
  • The pros and cons of tankless water heating units

By the end, you’ll have the knowledge to confidently decide whether or not a tankless water heater is worth the investment based on your circumstances.

πŸ’Έ How Much Does a Tankless Water Heater Cost?

On average, the cost of a tankless water heater is $250-$5,000. The national average price of a tankless water heater is $2,200.

Some tankless heaters cost upwards of $5,000 if they have special features or an exceptionally energy-efficient performance (such as condensing tankless water heaters).

Setting up the tankless water heater

πŸ“ Factors Affecting the Cost of a Tankless Water Heater

Let’s look in more detail at the factors that affect the cost of a tankless water heater.

System Type

There are two popular types of tankless water heater: electric heaters and gas heaters.

An electric tankless water heater is generally cheaper than a gas tankless heater. Both types of heaters have their own unique advantages.

We’ve shared more information on tankless water heater costs based on system type later in this article.

System Fuel Type and Water Flow

There are various ways to fuel a tankless water heater, including with electricity, propane, natural gas, oil, solar power, or a combination of electricity and propane/natural gas.

πŸ“Œ You might prefer to use the same fuel source for your water heater as for your home’s heat. Solar-powered tankless water heaters offer the lowest-cost performance but as the most expensive to install.

Tankless water heaters have varying flow rates depending on their size and capacity. Flow rate is measured in gallons per minute, or GPM. Most brands offer multiple flow rates for households of different sizes.

Related: What size tankless water heater do I need?

Whole Home Vs Point of Use

Whole home tankless water heaters are installed close to your water’s point of entry into your home.

These systems supply hot water for multiple bathrooms and appliances, even during times of peak water usage. There are different-sized whole home units, most providing 5-10 GPM of hot water. The average cost of a whole home tankless water heater is $450-$1,500.

Point of use tankless water heaters are installed up to 50 feet away from an appliance that requires hot water, such as a shower or a faucet. These units are efficient and easy to install, and produce 0.5-2 GPM of hot water.

The average cost of a point of use tankless water heater is between $100 and $300. You may need multiple point of use heaters if you have multiple appliances that require hot water.

Whole home tankless water heater versus point of use tankless water heater

System Size

The size of a tankless water heater ties into its use point and its water flow.

The bigger a system, the faster its water delivery and the more materials it’s made from. This increases the cost of the unit.

You’ll generally need to spend more on using and maintaining a large tankless water heater because it’s designed to deliver a faster flow of water to a home with multiple bathrooms and appliances.

System SizeCost
Point-of-use $180–$500
1–2 GPM $180–$250
2–3 GPM $250–$600
3–4 GPM $330–$700
5–6 GPM $450–$1,200
7–8 GPM $530–$1,500
>8 GPM $650–$2,000

Removal of Existing Heating System

If you plan to replace your existing water heater with a tankless heater, you’ll need to factor in the cost of getting your current heater removed.

The cost of removing and replacing an existing water heater depends on your situation. On average, expect to spend $1,200-$5,000 for labor and parts.

Labor Costs

Most plumbers charge between $50 and $150 per hour to install a tankless water heater. The overall labor cost depends on the complexity of the job and the location.

Installing a tankless water heater takes up to eight hours, based on the fuel source and the heater type. Opening the walls and installing an access panel will add $100 to $300 onto the labor cost.

There are several materials that your local contractor will probably need to buy for the installation process:

Lead-free brass valve$50-$120
Termination vent kit$50-$100
Gas connector kit$20-$40
Insulation and piping$10/foot

You may also need to secure a permit before your plumber can install your heater. Ask your plumber if you’re unsure.

If the location you plan to install the water heater is difficult to access, your contractor will have to spend more time and effort on installation, increasing the overall upfront cost.


Some tankless water heater brands have a longer history of customer satisfaction and reliability than others. Expect to pay more for a tankless heater from a trusted brand than one from a new or unreliable brand.

Some of the most popular water heater brands for tankless units are Ecosmart, Rinnai, Bosch, Rheem, Noritz, Stiebel, and Camplux.

AO Smith$600–$1,500
Bradford White$500–$1,800
Takagi $500–$2,000

🧾 Cost of Tankless Water Heaters by System Type

When choosing between tankless heaters, you’re most likely to come across gas heaters and electric heaters. Commercial heaters are also available for large buildings.

Tank Type Cost
Gas $500-$1,200
CommercialPrice from local suppliers only

Electric Tankless Water Heater Prices

  • The average price range for electric tankless heaters is $200-$600. These heaters typically have a power output of 11-36 kilowatts and a flow rate of 2-6 gallons per minute.
  • Small point of use electric tankless water heaters are on the cheaper end, costing roughly $100-$200. These models require 120-240 volts to operate.
  • Large whole home electric heater models cost $600 to $900, with a flow rate of around 6 GPM and a power output of 36 kilowatts.

Gas Tankless Water Heater Prices

  • The average price range for gas tankless water heaters is $500-$1,200. These heaters typically produce 6-11 gallons of water per minute and have a 70,000-180,000 BTU (British thermal unit, a heating power measurement) range.
  • The smallest point of use gas tankless heaters cost $100-$300 and have a BTU range of between 30,000 and 45,000. These produce up to 2 gallons of water per minute.
  • The largest whole home tanjless gas heaters for residential use provide 10-11 GPM of water and have a BTU range of around 99,000 on average. These systems cost $1,200-$2,000 on average.
Gas tankless water heater

Commercial Tankless Water Heater Prices

Tankless water heaters for commercial use are often powered by natural gas. These heaters have a BTU range of 240,000 to 360,000 or higher, and cost tens of thousands of dollars upfront.

Estimating the cost of a tankless commercial water heater is pretty impossible, since different situations call for different products (and broadly varied budgets). Speak to several of your local suppliers to get an idea of the price range you’re looking at.

Solar Tankless Water Heater Prices

Tankless solar heaters use solar energy (from the sun) to heat water, so no electricity or gas is needed.

Most solar heaters cost $1,700-$5,000 on average to install. The average maximum cost for this heater is $13,000, making it the most expensive upfront option for both residential and commercial use.

However, the cost of running this type of tankless heating unit is significantly lower than any other tankless unit. You can cut down on your heating expenses by 50-80% by using a solar-powered water heater. Plus, this type of heating unit operates quietly and is easy to maintain. The downside? Repairs tend to be costly.

Solar tankless water heater

πŸ”§ Average Cost to Install a Tankless Water Heater

The average labor cost to install a tankless heating system is $350-$2,000, depending on the type of heater and the complexity of installation required.

πŸ“Œ Electric tankless water heaters are quicker and easier to install than gas heaters because they don’t need ventilation. In some cases, however, you may end up spending more than expected on an electric tankless heater – such as if you need to upgrade your current electrical setup to meet your new heater’s requirements.

The cost of installing a tankless heater is also determined by whether or not you need to remove and replace your old heater. If so, your plumber will charge for the time it takes to rip out your existing heater and dispose of it properly.

Timing is a big factor when it comes to your overall expected labor cost. Also consider:

  • What parts, accessories, tools, and equipment are needed for the job, and how much these cost
  • Whether or not your town or city requires permits for new heater installations, and how much these cost
  • The labor warranty provided by the contractor, and the length and scope of this warranty

Let’s take a look at some example scenarios for the cost of installing an electric vs a gas tankless water heater.

Electric Water Heater Installation Cost

Type of InstallationTime SpentMaterials UsedTotal cost
Complete install2-5 hours Piping, fittings, valves, mounting hardware$250-$800
Replacing old unit1-3 hoursValves, fittings, mounting hardware$125-$250

Other electric tankless water heater costs to consider are the cost of installing an outlet and wiring it back to the electric panel, and the cost of rewiring your home prior to installation.

Gas Tankless Water Heater Installation Cost

Type of InstallationTime SpentMaterials UsedTotal cost
Complete install8-10 hoursPiping, fittings, valves, mounting hardware$1,000-$1,800
Replacing old unit3-4 hoursValves, fittings, mounting hardware, gas kit$200-$800
Additional: Gas line$500-1,000

Additional costs to consider for installing a tankless gas heater are the cost of a new venting system, the cost to remove and dispose of the old heater, and the cost of upgrading to a larger pipe diameter.

πŸ“‰ Average Annual Tankless Water Heater Operating Costs

The main long-term cost to run a gas or electric heater is the ongoing cost of fuel.

Electric heaters are about 30% more affordable to run than tankless gas units. Exact prices depend on the cost of living in your local area.

In all cases, your cost to run a tankless hot water heater is determined by how much hot water you use.

Another factor affecting your ongoing costs is your feed and output water temperature. You can’t do much about having cold inlet water, but you can reduce your heater’s work by adjusting your maximum output hot water temperature to your ideal level of warmth.

Let’s take a look in more detail at the running cost of a tankless electric heater vs gas heater.

Operating a tankless water heater

Cost of Electricity

The average annual cost of operating an electric tankless water heater is $100-$300. If your system is particularly energy efficient, you may spend less than $100/year. Some inefficient systems will set you back more than $300 annually.

Cost of Natural Gas and Propane

Operating a tankless water heater that uses natural gas or propane is typically more expensive – depending on your water usage. The annual cost of operating a tankless gas water heater is $200-$500. The efficiency of the system only minorly effects the amount of gas used in the system.

πŸ“Œ To keep costs as low as possible, choose natural gas if your home is already hooked up to a utility supply line. Otherwise, consider propane, which has a higher BTU and is more efficient. You’ll need to purchase propane independently, however. The cost of propane and natural gas varies based on your region.

FuelMonthly Cost Annual Cost
Natural gas$17-$42$200-$500

🧰 Average Annual Tankless Water Heater Maintenance Costs

Alongside operating costs, on-demand water heaters also have recurring maintenance costs.

Routine maintenance is essential in a point of use or whole house tankless water heater to keep the unit in good working order.

Even a brand-new tankless water heater will need regular maintenance. In fact, the sooner you can start with regular maintenance tasks, the better you’ll be able to maintain the quality and integrity of your unit.

The most important maintenance job is descaling and flushing the heating elements. Most plumbers recommend this once every 12 months, depending on your water usage and water hardness. You can bypass the need for descaling entirely if you have a whole home water softener installed upstream of your heater.

πŸ‘‰ Check out these top recommended water softening systems to protect your heater.

The average cost of a 1-2 hour maintenance job is $50-$200, depending on your plumber’s rates.

Alternatively, you can descale your heater yourself with a descaling kit, costing about $130 online.

πŸ†š Tankless Water Heaters vs Traditional Water Heaters

Wondering what kind of savings you can expect from a tankless unit compared to a traditional water heater?

As we mentioned earlier in this guide, a hot water heater without a tank is expensive. However, it’s still cheaper to install this type of heater than a heater with a water storage tank.

Because there are so many factors affecting the performance of both tankless and tank-based hot water heaters, we can only estimate the difference in long-term costs between the two.

πŸ“Œ Generally, tankless units are more affordable to run due to their greatly minimized standby losses. Storage tank systems need to constantly keep water hot, which means the heater must work harder, for longer, increasing your energy bills.

On average, on-demand water heaters are about one-third more efficient than tank-based heaters. The exact figure depends on your daily hot water usage.

Tankless water heater versus traditional water heater side by side comparison

βš–οΈ Pros and Cons of Tankless Water Heaters

Let’s take a quick look at the pros and cons of a tankless water heating system.


  • They offer a more energy-efficient performance compared to traditional gas or electric water heaters. Tankless units don’t store hot water, so they don’t waste energy from being on standby. This helps you to save around 30% on your energy bills.
  • You have a constant supply of water with this type of system. When you turn on your faucet, water flows through the heating elements and is warmed instantly. You won’t ever have to wait for a full tank of water to be heated.
  • These heaters are safer and easier to use in cold weather. Traditional units require far more prep for the winter.
  • There are no bulky tanks to install, so tankless units are best for apartments or homes with limited space. You no longer need an entire cupboard dedicated to your heater.
  • You can enjoy a tankless system for up to 20 years, while traditional tank-based systems last for 15 years, max.


  • Making the switch to a tankless system is expensive. You probably won’t feel the financial benefits of the system for a few years after installation.
  • Slow-flowing water doesn’t bode well for this type of heater. You may need to install a pressure booster if your water flow is slower than average.
  • Tankless systems have a limited maximum flow delivery. Even the largest systems can only provide around 6 GPM (gallons per minute) of hot water.

πŸ‘¨β€βš–οΈ Are Tankless Water Heaters Worth It?

So, are tankless units worth the expense?

To answer this question, you need to think about your current spend on hot water, and work out an estimate of how much you could save by installing a tankless unit.

On average, a family of four using a lot of water (80-100 gallons) can expect to save between 5 and 15% on the current energy bill.

If your family uses less water (55-70 gallons), you can save up to 35% on your annual water heating bill.

πŸ“Œ For most people, a tankless on-demand heater is worth the investment. A high-quality heater should last you two decades, so you’ll get plenty of use out of your investment – and save money along the way.

Some states and utilities offer tankless water heater rebates as an incentive to improve your energy efficiency. Check before you buy! These rebates can help you save money, so they’re well worth looking into.

Looking for an efficient tankless water heater? Here are our Top 3 Recommended Brands πŸ‘‡

EcoSmart ECO 27
EcoSmart ECO 27
Stiebel 24 Plus
Stiebel Eltron Tempra 24 Plus
Rheem RTE 13
Rheem RTE 13
Power TypeElectricElectricElectric
Flow Rate (GPM)6.54.34

πŸ‘‰ Want to see more options? Check out all the best tankless water heater options in 2024!

❔ Tankless Water Heater Cost: FAQ

How much does it cost to put in a tankless water heater?

The average cost of putting in a tankless water heater is $250 to $500. The size and type of heater, the heater’s use point, your local cost of living, the system fuel type, and your unique needs will all affect the cost of installing a tankless unit.

What is the downside of a tankless water heater?

The biggest downside of a tankless water heater is its expensive upfront cost. On average, buying and installing a tankless water heater costs about three times the price of a traditional tank-based water heater.

Is a tankless water heater worth the cost?

Yes. Due to their high energy efficiency, tankless water heaters are worth the cost – and they provide up to $100 in annual savings compared to traditional water heaters. If you don’t use a lot of hot water in general, your heater should provide a performance that’s up to 35% more efficient than tank-based heaters.

How much does it cost to replace a hot water heater with a tankless?

The average cost of replacing a hot water heater with a tankless heater is $1,200-$5,000. The exact cost depends on the labor costs of your local contractors, the size and type of tankless heater installed, and the complexity of the job.

How long do tankless water heaters last?

Depending on the quality of the components and the brand, the average lifespan of a tankless water heater is 15-20 years. You may be able to extend your heater’s lifespan beyond 20 years by replacing the parts when they become worn.

Can I install a tankless water heater myself?

Yes. If you’re an experienced DIY-er, you can install a tankless electric water heater yourself. Ideally, seek advice from a professional plumber before you get started, who can discuss your options and tell you the best type and size of heater for your needs. Don’t install your own gas or propane tankless water heater. This is a dangerous job that requires an experienced professional. In all situations, make sure you’re aware of your local regulations, which may require a licensed plumber to install your new tankless water heater for you.

Do tankless water heaters use a lot of electricity?

Yes, tankless water heaters require a lot of electricity – but they don’t run all the time, so electricity is only used when you turn on your hot water faucet. The average tankless heater uses around 30,000 watts of electricity when it’s switched on. To put this into perspective, a washing machine needs only about 1,000 watts to run for over an hour. But you’ll still save energy with a tankless water heater because it only switches on when needed.

  • Laura Shallcross
    Senior Editor

    Laura is a passionate residential water treatment journalist who holds an undergraduate degree in Print Journalism and a master’s degree in Creative Writing. Over a span of 5 years she's written on a range of topics including water softening, well water treatment, and purification processes.

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