Tankless water heater cost
A tankless water heater costs $1,800 to $6,500 installed, typically $3,600. Most of the premium over a tank is not the appliance: it is the gas line and the venting.
National average
$3,600
per project
On this page
A tankless water heater costs $1,800 to $6,500 installed, typically around $3,600 when it replaces a tank. That is roughly twice what a straight tank replacement costs, and most of the difference is not the appliance.
A tank water heater sits where the old one sat and connects to what is already there. A tankless unit fires at three to five times the input rate, which usually means a larger gas line and always means new venting. That work is the premium.
What you are actually paying for
| Line | Typical |
|---|---|
| The unit, gas condensing | $1,000 to $2,500 |
| Labour | $600 to $1,900 |
| New stainless or PVC venting | $300 to $900 |
| Gas line upsize where needed | $500 to $2,000 |
| Electrical outlet at the unit | $150 to $400 |
| Condensate drain and neutraliser | $150 to $400 |
| Permit and inspection | $100 to $400 |
Compare that with a tank replacement at $950 to $3,200 all in, and the arithmetic of the decision becomes clearer.
Electric tankless units are cheaper to buy and frequently far more expensive to install, because a whole-house electric tankless can need 100 to 150 amps of dedicated capacity. In many houses that means a service upgrade, which is $1,800 to $5,500 on its own. Electric tankless makes sense at point of use, for one bathroom or a workshop sink, rather than for a whole house.
Does it save money
Less than the marketing suggests, and it depends on how much hot water you use.
A tankless unit avoids standby loss, the energy a tank spends keeping 50 gallons hot all day. That is real, and the Department of Energy puts the efficiency gain at 24% to 34% for households using modest amounts of hot water, and 8% to 14% for heavy users. On a $300 a year water heating bill, that is $25 to $100 a year.
Against a $1,800 premium over a tank, payback is 18 to 70 years, which is longer than the equipment lasts.
So the honest case for tankless is not the energy bill. It is these:
It does not run out. Two long showers back to back is a solved problem.
It lasts longer. Twenty years against ten to twelve for a tank, so over that horizon you buy one tankless instead of two tanks. This is the strongest financial argument and it depends on staying in the house.
It takes up less room. A wall-mounted unit frees a closet or a corner of a garage.
It cannot flood. There is no tank to fail and put 50 gallons on the floor.
Where tankless disappoints
The cold water sandwich. Turn the hot tap off and on again quickly and you get a slug of cool water while the unit re-fires. Modern units with a small buffer tank reduce it; cheaper ones do not.
Minimum flow. A tankless unit needs a certain flow to fire, typically 0.4 to 0.6 gallons per minute. A trickle at a bathroom tap may not trigger it.
It still takes time to reach the tap. Tankless heats instantly at the unit, not at the fixture. The wait for hot water at a distant bathroom is a pipe-length problem and a recirculation problem, not a heater problem.
Hard water. Scale is the main enemy. In hard water areas a tankless unit needs descaling annually, which is $150 to $300 if you pay someone, and neglecting it shortens the life considerably. Ask about a scale filter.
Sizing it
Tankless units are rated by temperature rise at a given flow. Two showers at once in Minnesota in January is a much harder job than two showers in Florida in July, because the incoming water is 40°F rather than 70°F.
Work out the peak simultaneous demand in gallons per minute, and the temperature rise needed in your coldest month. An undersized unit is the most common complaint about tankless, and it is a sizing failure rather than a technology failure.
Frequently asked questions
How long does a tankless water heater last?
Twenty years or more with annual descaling, against ten to twelve for a tank. Most manufacturers offer 12 to 15 year heat exchanger warranties, which is a useful signal.
Can I install one where my tank is now?
Physically usually yes, they are much smaller. The constraints are the gas supply and the vent route. A condensing unit vents in PVC through a side wall, which is straightforward; a non-condensing unit needs stainless steel and is more restrictive.
Do I need a bigger gas line?
Often. A tank water heater is typically 40,000 BTU; a whole-house tankless is 150,000 to 199,000. If the existing line and meter cannot deliver that alongside the furnace and range, they are upsized. Have the contractor confirm this before quoting, not after starting.
Is a heat pump water heater a better option?
Frequently, yes, and it is worth pricing. A heat pump water heater is a tank, so it keeps the simple installation, and it is two to three times more efficient than a standard electric tank, which is a far larger energy saving than tankless delivers. It needs a reasonably sized, unheated space and it cools that space slightly.
Does it work in a power cut?
No. Gas tankless units need electricity for the controls and the fan, so they stop when the power does. A gas tank with a standing pilot keeps working, which is one of the few advantages the old technology retains.
Read next
Water heater replacement cost$850 to $6,500per projectReplacing a standard tank water heater costs most homeowners $1,300 to $2,600 installed. Switching fuel type or moving to tankless is what pushes the number past that.
Gas line installation cost$15 to $40per linear ftRunning a gas line costs $15 to $40 a linear foot, with most household jobs between $300 and $1,200. The most common reason people need one is a tankless water heater, which draws four times what a tank does.
Hot water recirculation pump cost$300 to $1,200per eachA recirculation pump costs $300 to $1,200 installed, typically $600. Run continuously it turns a water-saving device into an energy-wasting one, so the control matters more than the pump.
Water softener cost$800 to $3,500per projectA water softener costs $800 to $3,500 installed, typically $1,800. Before spending anything, test your hardness. Below about 7 grains a softener solves a problem you do not have.
How long does plumbing last$4,500 to $12,000per projectCopper lasts 50 to 70 years, PEX 40 to 50, cast iron drain 50 to 100. Plumbing is the system that fails quietly for years and then all at once, and the material in your walls says roughly where you are.