There’s nothing worse than expecting a steaming hot shower in the morning and instead finding only ice-cold water. Fortunately, water heater installation costs less than many other major household appliances and can be done in just two to three hours.
We use real-world data from RS Means — a building materials database used by contractors across the United States — to give you the most accurate cost information possible. That way, you won’t get any surprises when you call for an estimate from your local water heater installer.
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GET ESTIMATESOn average, water heater installation costs between $960 and $3,910, but most homeowners pay around $2,200 to install a new water heater, including the water heater and the labor costs.
The up-front cost to install a water heater depends on several factors: the type of water heater, fuel source, and efficiency. We’ll explore each of these factors more in the sections to come.
LowAverageHigh$960$2,200$3,910Cost data include the material costs and labor, if applicable. All cost data in this article were gathered from RSMeans construction materials and labor database and bids from top contractors.The factor that will likely impact the total cost of your new hot water heater the most is the size. The size of your water heater directly affects the amount of hot water you’ll have at a given time — the larger the size of the unit, the more water you’ll have.
The number of people who live in your home will help you determine which size water heater is best for you. A 30- to 40-gallon water heater should do the job if you live with just one or two people. But if you have more than six people in your household, you should look into a 70- or 80-gallon water heater.
The number of people in your home isn’t the only factor you should consider as you decide which size water heater you want. If you’re the type of person who enjoys long, hot showers or steaming-hot baths, you may want to consider a larger water heater.
Tank SizeNumber of People in HomeAverage Cost30 gallons1 – 2 people$960 – $2,27540 gallons2 – 3 people$1,000 – $2,50050 gallons3 – 4 people$1,265 – $1,88070 gallons5 – 6 people$1,275 – $3,50080 gallons6+ people$2,650 – $3,910Cost data include the material costs and labor, if applicable.There are two types of water heaters: tank and tankless. Tank water heaters typically cost between $1,000 and $2,500 to install, whereas tankless water heater installation costs between $960 and $3,910.
Type of Water HeaterAverage Price RangeTank Water Heater$1,000 – $2,500Tankless Water Heater$960 – $3,910Cost data include the material costs and labor, if applicable.
Tank units are the most traditional water heater style and keep a stash of water hot and ready. Most tank water heaters cost between $1,000 and $1,800 to install, but high-efficiency units can cost up to $2,500 or more.
It takes as little as one to three hours to install a tank-style water heater, and these units have a six to 15-year life span. A tank water heater is a good choice if you have three to four people in your home or high water demands.
Unlike tank water heaters that store a set amount of water, tankless water heaters warm water up as needed — which means you’ll have an endless supply of hot water. Tankless units save you money by only heating the water you need; they’re also more energy efficient and have a 20-year lifespan. On average, tankless water heater systems cost between $960 and $3,910.
Learn how tankless water heaters save energy with this video:
The size and type of water heater play an important role in your total cost, but several other factors can influence how much your water heater will cost. As you shop for water heaters and gather quotes, consider the following factors to save the most money possible and choose the right water heater for your home.
Fuel type — natural gas or electric — does play a role in how much your water heater installation will cost. Electric water heaters tend to be the least expensive to install but cost more to run because the cost of electricity is more than the cost of gas.
New gas water heaters cost $2,607 (on average) including installation costs. Compared to electric water heaters, gas models can heat water more quickly. However, they come at a higher cost and are only 60% to 70% energy efficient.
If you want a more efficient water heater, an electric water heater is the way to go — electric heaters are about 95% energy efficient. At an average cost of $1,177, they’re also a lot less expensive to install. But as mentioned above, running an electric water heater costs a lot more. As of February 2023, the U.S. average cost of electricity is 15.96 cents per kilowatt hour.
Water Heater Type (30 gallons)Average Materials CostAverage Installation CostMaterials and Installation CostElectric$920$257$1,177Gas$2,325$282$2,607Cost data include the material costs and labor, if applicable.A high-efficiency water heater can be as much as 300% more efficient than older, more traditional models — but tend to be more expensive at $1,000 to more than $5,000 to install. However, if you plan on staying in your home long-term, installing a high-efficiency system is worth it simply because you’ll save money on your monthly energy bill.
There are three types of energy-efficient water heaters: hybrid heat pumps, indirect water heaters, and solar water heaters. Indirect water heaters work similarly to tank water heaters and use a coil to heat the water but use your boiler or furnace to heat water instead of its own energy source.
Hybrid heat pump water heaters and solar water heaters both rely on external sources to heat water. Heat pumps use the air to heat water, and solar water heaters use energy from the sun to heat your water. Both indirect and hybrid heat pumps cost around $1,000 to $3,600 to install — but solar water heaters tend to be the most expensive and can easily exceed $10,000 if installed in a larger home.
TypeAverage CostHybrid heat pump$1,250 – $3,600Indirect$1,000 – $3,500Solar$1,700 – $5,000+Cost data include the material costs and labor, if applicable.The cost of your water heater may also depend on the brand. Although most water heater units start at $400, some brands — such as Kenmore and Whirlpool — offer cheaper models at $350 to $1,000 and $400 to $1,700, respectively. High-end water heaters — like those offered by AO Smith and Bradford White — can cost up to $3,000 for the unit alone.
Related: Rheem Proterra vs Performance Platinum – Which Water Heater is Better?
BrandAverage Unit CostAO Smith$400 – $3,000Bradford White$400 – $2,800Kenmore$350 – $1,000Rheem$400 – $2,500Whirlpool$400 – $1,700Cost data include the material costs and labor, if applicable.The bulk of your total installation cost will come from the water heater and installation costs, but other smaller costs can quickly add thousands of dollars to your bill. For example, if you relocate your water heater, you could pay up to $3,500 on top of a $50 to $150 permit.
Other costs may be worth the investment, such as an extended warranty or home warranty for your water heater. These plans can offer peace of mind should your water heater break down, as these policies often cover any water heater replacement costs.
Cost FactorAverage CostDirect vent or power vent$500 – $1,500Electrician labor costs$50 – $100 per hourExpansion storage tank$100 – $350Optional water heater warranty$100 – $300Permits$50 – $150Plumber labor costs$45 – $200 per hourRelocate water heater$150 – $3,500Cost data include the material costs and labor, if applicable.The obvious main benefit of installing a water heater is having hot water for your showers, laundry, and dishwasher — but if you are considering a tankless water heater over a tank, you could benefit even more from the change.
Photo credit: CanvaUnlike traditional tank heaters that keep a constant supply of hot water at the ready, tankless water heaters create warm water on demand. This continuous hot water supply means you won’t run out and won’t have to wait for water to heat up. As long as you have the right size tankless water heater, your hot water supply won’t be a problem ever again.
A tankless water heater can be a good investment, particularly because they last an average of five years more than a tank water heater. Tankless water heaters have a lifespan of 20 years, while tank water heaters last up to 15 years on average. Tankless water heaters are more expensive than tank heaters, but the added lifespan can make the extra few hundred dollars worth it.
Because tankless water heaters only heat the water you need, they can save you hundreds of dollars in energy costs each year. Tankless water heaters can be up to 50% more energy efficient than tank models.
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The most common fuel sources for tankless water heaters are electricity, natural gas, and propane. Natural gas water heater units can typically burn either gas or propane.The most common fuel sources for tankless water heaters are electricity, natural gas, and propane. Natural gas water heater units can typically burn either gas or propane.
Installing a water heater is a difficult task that requires knowledge of water lines, gas lines, electrical work, and more. You’ll also need a permit to install a new water heater, and you’ll need to make sure it’s installed correctly to avoid explosions or hazardous conditions. For these reasons, we strongly recommend hiring a professional to install your water heater.
You should work with professionals to install your new water heater — if it’s installed incorrectly, you could be at risk for explosions, gas leaks, and other hazardous conditions. But if you do decide to attempt water heater installation by yourself, make sure you obtain the correct permits from your local utilities building and follow these steps:
To ensure that your water heater is installed safely and correctly, it’s important to work with a professional plumber to get the job done. When you work with a professional plumber, they can also help you figure out which size and type of water heater is best for your home.
Follow these easy steps to get connected to the best plumbers in your area:
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If you don’t have a water heater in your home, you don’t have access to hot water. So, of course, a water heater is worth it. Most water heaters cost between $960 and $3,910 to install — but if you opt for a large solar water heater, you could pay $10,000 or more. However, most homeowners pay around $2,200.
If you’re looking for energy savings, then a tankless water heater may be your best option. These models supply an endless amount of hot water, are more efficient, and will cost less money each month. But if you’re on a budget, then it’s best to install a tank water heater with enough gallons to support your family and home needs.
If you have a larger family of four or more, a 50-gallon tank is better. A 40-gallon water heater is suitable for a family of two to three people, but if you find yourself quickly running out of water, you can and should upgrade.
Carbon monoxide leaks are a major risk associated with water heaters, but other risks include rusty or dirty water, nasty odors, corrosion, water temperature problems, and fires or explosions caused by gas leaks.
Most water heaters cost between $960 and $3,910 to install. This includes the water heater and installation costs — but if you relocate your water heater or install an expansion tank, you can add up to $2,000 to your total cost.
However, installing a water heater in colder climates may cost more than in warmer climates because cold regions have a higher risk of pipe freezing.
While an HVAC pro will install your furnace or air conditioner, a licensed plumber typically installs a water heater. They can install tank, tankless, gas, and electric water heaters.
A 40-gallon water heater costs between $1,000 and $2,500 to install. This cost includes both the water heater and the cost of labor.
If your water heater is on its last legs, you’re probably wondering how much it will cost to replace it. Water heaters come in a variety of sizes and models, so the cost can vary quite a bit. In this blog post, we will give you an idea of the factors that go into water heater replacement costs and what to ask when getting an estimate.
Before we get into the cost of water heater replacement, let’s first discuss whether it is better to fix or replace your water heater. In most cases, it is more cost-effective to simply replace the water heater rather than trying to repair it. This is because water heaters are not designed to be repaired – they are built to last for a specific amount of time and then be replaced. Most water heaters have a lifespan of about 8 to 12 years, so if yours is around this age, it is probably time for a replacement.
Of course, there are always exceptions to the rule. If your water heater is relatively new and you have not been having any problems with it, then it may make more sense to try and repair it rather than replace it. However, if your water heater is older or has been having issues, then replacing it is probably the best option.
Read next: When to Replace Your Water Heater
We know that buying a new water heater isn’t something you do often. There are a variety of factors that you should consider when replacing your hot water heater:
The size of your water heater is going to be one of the biggest factors in determining the cost. Water heaters are measured in gallons and you want to choose a size that is going to be able to meet the hot water needs of your household. If your current water heater is giving household members cold shower surprises then it may be a capacity issue and you should consider upgrading the size.
If you have a smaller home or live alone, then a 40-gallon water heater should be sufficient. If you have a medium to large home or multiple people living in your household, then you may need a 50-gallon or even an 80-gallon water heater.
Water heaters come in both gas and electric models. Gas water heaters require a gas line connection and a vent which will be an extra expense if you don’t have one installed. Both gas and electric water heaters are rated by how much gas or electricity is used to heat water. Electric hot water heaters are measured in watts – the higher the wattage, the quicker it heats the water. Natural gas is measured in BTUs with the same idea – higher BTUs heat faster.
Hot water heaters are rated high efficiency, mid-efficiency, and standard efficiency. To help consumers make decisions, the Department of Energy developed a national rating system called the Uniform Energy Factor (UEF).
This rating tells you how much hot water the heater can produce in real-world situations such as the First-Hour Rating (FHR), estimated yearly energy costs and how they compare to similar water heaters. The higher the UEF, the more energy efficient a hot water heater is. Energy-efficient models tend to cost more upfront, but they can save you money over time in energy.
There are two types of hot water heaters: tankless and ones with storage tanks. Tankless water heaters don’t have a holding tank but instead heat water on demand by passing it through a series of coils.
On the other hand, storage water heaters have a tank that holds water until it’s needed. The size of the holding tank is what determines how much hot water you have available at any one time. Storage tanks come in sizes ranging from 20 to 80 gallons.
Water heaters with a storage tank require room. If you are upgrading make sure that you have the right size tank to accommodate all the people living in your home and that you have a place to install it. Being chronically short of hot water could be a sign that your current water heater isn’t the right size for your household.
If you’re replacing an old water heater, you probably can use the same type of unit. If you’re upgrading to a larger unit or changing from one type of water heater to another, you’ll need to make sure there’s enough space for the new unit. Tankless or on-demand water heaters don’t require much space but may need a natural gas line installed.
To calculate the size of water heater you need, take into account the number of people in your household and how much hot water they use.
Showers are generally the biggest users of hot water in most households and can use up to 20 gallons of water per person. But there are other appliances and activities in your home that use hot water:
Determine what time of day has the highest hot water use and calculate the gallons of water used during that high peak hour.
A total of 48 gallons at peak use means this household would need an FHR water heater of 50 gallons or more.
There are many factors that can affect how much it costs to replace your water heater. Here are a few to keep in mind as you budget and discuss with your HVAC professional about your options.
As mentioned there are two main types of water heaters: tank and tankless. The type you chose to install will be a major factor in your water heater replacement cost. There are pros and cons to each and understanding the differences will help you make a decision on which is right for you and your family.
Tank water heaters are the most common type of water heater. They store hot water in a tank, and range in size from 30 to 50 or more gallon capacities. The average lifespan of a storage-tank water heater is about 8 to 12 years. There are also space requirements for a tank water heater. Storage water heaters are typically the most budget-friendly route.
Tankless water heaters heat water on demand, eliminating the need for space to install a storage tank. Water heater units that are tankless can last almost twice as long as storage tank units – up to 20 years. Tankless water systems are more expensive upfront but can offer significant savings over their lifetime.
There are two types of tankless water heaters on the market today – condensing and non-condensing. Condensing water heaters are more efficient than their non-condensing counterparts, with some models boasting efficiency ratings as high as 98%. These units work by heating water with waste heat from the flue gases. This means that they can recover some of the heat that would be lost in a non-condensing unit, making them more efficient overall.
Non-condensing tankless water heaters are still quite efficient, but not as much as condensing units. These units work by heating water with a burner, similar to how a traditional water heater works. The cost of a condensing tankless water heater will be higher than a non-condensing unit, but the increased efficiency can save you money in the long run.
Most water heaters use either natural gas or electricity to operate. There are also solar water heaters, but these are less common and tend to be more expensive. So, which type of water heater is best for you?
Gas water heaters are typically more expensive upfront. But they tend to be more energy-efficient than electric water heaters, so you’ll save money on your energy bill over time.
Electric water heaters are cheaper to purchase than gas water heaters, but they can be more expensive to operate. Electric water heaters are also easier to install which reduces your water heater replacement cost.
Solar water heaters are the most environmentally-friendly option, but they’re also the most expensive. If you live in an area with lots of sun, a solar water heater is a great option. But if you live in a cloudy climate, it might not be worth the investment.
The location of where your replacement water heater is going will be a factor in labor costs. Easily accessible areas usually cost less for a replacement water heater install than those in tight spaces or located in out-of-the-way places like barns. The more steps in the water heater replacement the higher the cost of installation.
Local governments determine what kind of permit is needed to replace your water heater. There may be a need for on-site inspection or changes in electrical lines, water lines, or gas lines to make the installation work. Ask your service professional if the estimate includes the cost of a local permit which means they manage the process and you don’t have to worry about it.
Removal and disposal of your old water heater may not be included in your estimate so make sure to ask. If it isn’t then you will be responsible for junk pickup to have it hauled away. Jacobs Heating & Air Conditioning will take care of the removal and disposal of your old water heater so you don’t have to think about it.
Murphy’s Law says that “if anything can go wrong it will go wrong.” We aren’t that pessimistic and most of the time things tend to go smoothly, but it is always a good idea to budget for unforeseen additional costs not included in your estimate. New wiring, gas line upgrade, and other issues could crop up during your water heater installation and it is a good idea to be prepared.
Read next: 10 Noticeable Signs Your Water Heater is Going Bad
You could, but we wouldn’t recommend it. Gas water heaters need to be properly vented and the gas line needs to be hooked up correctly. One mistake could lead to a dangerous situation. If you are converting from an electric water heater to a gas you will need to install a vent and a gas line will need to be run.
Water heater installation is not a do-it-yourself job – leave it to the professionals at Jacobs Heating & Air Conditioning who will do the job quickly, efficiently, and up to code. A Jacobs consultant will discuss with you the three main factors to determine which water heater will work best for your home and family.
With all these factors in mind, a water heater replacement cost can range between $2,500 to $3,000 for a new tank unit, and $6,500 and $7,500 for a new tankless unit installed in place of an old tank. Additional plumbing costs as well as tank disposal can add to the final total.
Read next: How Long Do Water Heaters Last?
There are many factors that go into deciding when to replace your water heater and Jacobs Heating & Air Conditioning experts are here to guide you. We carry a variety of hot water heaters so that your home or business has the best and most efficient water heaters around.
Avoid extra costs and fewer repairs by scheduling a maintenance check for your existing water heating system before issues arise. No matter what you need, we’re always just a phone call away.
Whether you are in the market for a new water heater or simply have questions about your current one, Jacobs Heating & Air Conditioning is here to help. We’ve been servicing the Portland area for over 70 years and our experience shows in the quality of our work. Give us a call today!
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