If you're considering upgrading to a tankless water heater, you're likely wondering about the costs involved. Tankless water heaters provide many benefits. This includes energy efficiency, a limitless supply of hot water, and a compact design. Due to their features, they often come with a higher upfront installation cost compared to traditional tank-style water heaters. However, understanding the factors that influence the cost—such as the type of unit, fuel source, and the complexity of installation—can help you make an informed decision.
In this blog, we’ll explore how much it costs to install a tankless water heater in the US. We break down everything you need to know, from upfront expenses to long-term savings.
Tankless Water Heater vs. Traditional Tank Models: Cost Overview
The first key difference between tankless and traditional water heaters is the cost. Traditional tank water heaters are generally less expensive upfront, with prices for the unit itself ranging from $300 to $2,000. On the other hand, tankless water heaters typically cost between $1,000 and $3,000. The reason for this higher price point is the advanced technology of tankless systems. These systems heat water on demand rather than continuously heating and storing it in a large tank.
The difference in price isn't limited to just the units themselves. Installation costs also vary significantly. For a tank-style water heater, installation costs typically range from $200 to $1,100. It depends on the size of the tank and the complexity of the job.
Installing a tankless water heater tends to be more complex and expensive, with costs ranging from $300 to $2,500. This is due to factors such as additional venting requirements for gas models or necessary electrical upgrades for electric units.
Despite these higher upfront costs, tankless water heaters provide significant long-term savings by reducing energy consumption. Since they only heat water when it's needed, tankless systems eliminate the energy waste associated with constantly reheating water in a tank. Over time, this can result in lower energy bills. It makes the initial investment more appealing.
Factors That Influence Tankless Water Heater Installation Costs
Several key factors affect how much it costs to install a tankless water heater. These include the size of the unit (measured in gallons per minute, or GPM), the type of fuel it uses, the brand of the unit, and the overall complexity of the installation.
- Size and Gallons Per Minute (GPM) Rating: The size of a tankless water heater is one of the most important factors in determining its cost. Tankless water heaters are measured by their GPM rating. This indicates how many gallons of hot water the unit can provide per minute.
The higher the GPM, the more expensive the unit. Larger homes or those with high hot water demand may require a unit with a higher GPM. This is to maintain an adequate supply of hot water for multiple showers, appliances, and faucets running simultaneously.
For example, a household with multiple bathrooms may require a unit that can supply 5 GPM or more. Whereas, a smaller household may only need 1-2 GPM. Point-of-use tankless water heaters which provide hot water to a single fixture like a sink or shower are more affordable and have lower GPM ratings. This makes them a cost-effective option for homes with lower water demand.
- Fuel Type: The type of fuel used to power your tankless water heater also plays a major role in both installation and long-term operating costs. Tankless water heaters can be powered by electricity, natural gas, propane, or solar energy. Each type has its own price range.
- Electric Tankless Water Heaters: These models are generally the least expensive to install. They typically cost between $300 and $1,500 for installation, depending on the complexity. Electric models are a good fit for smaller homes and are easier to install because they don’t require special venting.
However, electric models may struggle to supply enough hot water for larger homes or households with higher hot water demands.
- Gas-Powered Tankless Water Heaters: Gas models are more expensive to install, with installation costs ranging from $500 to $2,500. They are often more efficient for larger homes and cold climates where gas can heat water faster and more effectively.
However, the installation process for gas units is more complex. They often require venting modifications and gas line upgrades. Both of which can add to the overall cost.
- Propane and Solar Tankless Water Heaters: Propane-powered units can be an alternative in rural areas where natural gas isn’t available. Their installation costs are similar to gas units. Solar-powered tankless water heaters offer the greatest long-term energy savings.
- However, they are the most expensive to install, with costs ranging from $1,500 to $5,500. Solar units may also require additional components such as solar panels, adding to the installation complexity and cost.
- Installation Complexity: The more complex the installation, the higher the overall cost. Factors like venting requirements for gas units, electrical panel upgrades for electric units, or rerouting plumbing lines can increase the installation time and labor costs.
If your home requires significant modifications to accommodate a tankless water heater—such as enlarging gas lines, upgrading circuits, or installing a new vent system—the installation costs could rise substantially.
Even the location of the installation can impact costs. For example, if the unit is installed far from the existing plumbing or in a difficult-to-access area, it could take more time and effort to complete the installation.
- Brand and Model: The brand and model of the tankless water heater you choose also influence the overall cost. High-end brands like Rinnai, Navien, and Noritz are known for their advanced technology and durability. However. they also come with a higher price tag. These brands often include features like advanced water flow sensors, better temperature control, and longer warranties to justify their higher costs.
More affordable options like Rheem and EcoSmart provide reliable performance at a lower price. They are suitable for homeowners on a budget. While these models may lack some of the advanced features of premium brands, they still offer the core benefits of a tankless system. They provide benefits such as energy savings and unlimited hot water on demand.
Exploring the Benefits of Tankless Water Heaters
While tankless water heaters tend to cost more upfront, their long-term benefits often make them a worthwhile investment.
- Energy Efficiency: Tankless water heaters only heat water when it’s needed. It eliminates the energy waste associated with maintaining a large tank of hot water. This can lead to significant savings on your energy bills over time, particularly in homes with high water usage. In fact, tankless systems can reduce energy consumption by up to 50%, depending on usage patterns.
- Unlimited Hot Water Supply: With a tankless system, you won’t have to worry about running out of hot water. These units heat water on demand. As long as your tankless heater is sized correctly, you’ll have a continuous supply of hot water for showers, dishwashing, laundry, and more.
- Longer Lifespan: Another advantage of tankless water heaters is their durability. A traditional tank-style water heater typically lasts 10-15 years. Whereas, a tankless model can last up to 20 years or more with proper maintenance. This extended lifespan can offset the higher upfront cost, as you won’t need to replace your unit as frequently.
- Space-Saving Design: Tankless water heaters are much smaller than traditional tank models. They are an excellent option for homes with limited space. These units can be mounted on walls, installed in closets, or even placed outdoors to free up valuable floor space in your home.
- Environmental Benefits: Tankless water heaters are also an environmentally friendly choice. By reducing energy consumption, they lower your home’s carbon footprint. In addition, gas-powered models tend to produce fewer greenhouse gas emissions compared to tank-style units. They are also a greener option for eco-conscious homeowners.
How to Choose the Right Size and GPM Rating
Selecting the right size tankless water heater is important to providing optimal performance and energy savings. The size of the unit is determined by its GPM rating. This refers to how many gallons of hot water the unit can produce per minute. To choose the right size, you need to calculate your household’s peak hot water demand. It is the maximum amount of hot water needed if multiple fixtures are in use at the same time.
For example, a showerhead typically uses about 2.5 GPM. A dishwasher might use 1.5 GPM. If you anticipate using both at the same time, you would need a unit that can supply at least 4 GPM. Larger households with more bathrooms and appliances running simultaneously may require a unit with a higher GPM. This is often in the range of 5-7 GPM to ensure there’s enough hot water for everyone.
For smaller households or single fixtures, a point-of-use tankless water heater with a GPM of 1-2 might be sufficient. These units are typically installed near the fixture they serve and are more affordable than whole-home systems.
Maintenance and Repair Costs for Tankless Water Heaters
Maintaining a tankless water heater is essential for preserving its long lifespan and efficiency. Regular maintenance includes flushing the system to remove mineral buildup. Depending on the hardness of your water, it’s generally recommended to have your tankless water heater flushed annually. Professional maintenance typically costs between $45 and $200 per visit.
If your unit requires repairs, the cost will depend on the type of issue. Common problems include faulty sensors, heating element failures, or electrical issues. Repairs for these components can range from $100 to $500. However, addressing issues early can prevent more costly repairs down the line. Proper maintenance and timely repairs will help extend the life of your tankless water heater. This allows you to enjoy energy savings for years to come.
The Role of Energy Efficiency and Environmental Impact
One of the most significant advantages of tankless water heaters is their energy efficiency. Traditional tank-style water heaters constantly heat and store water, even when you’re not using it. This can lead to standby energy loss. In contrast, tankless water heaters heat water only when it’s needed, reducing energy consumption and lowering utility bills.
This efficiency not only benefits homeowners financially but also reduces the environmental impact of energy use. By using less energy, tankless systems help reduce greenhouse gas emissions. They are a more sustainable choice for environmentally conscious homeowners.
Additionally, tankless water heaters that use natural gas or propane tend to produce fewer emissions compared to electric models. For those looking to minimize their carbon footprint even further, solar-powered tankless water heaters offer the ultimate eco-friendly solution by harnessing renewable energy.
When considering how much it costs to install a tankless water heater in the US, it's important to weigh the initial investment against the long-term benefits. Tankless systems come with higher upfront costs for both the unit and installation. However, they offer significant energy savings, unlimited hot water, a longer lifespan, and a more compact design. These advantages make tankless water heaters a smart investment for many homeowners, especially those with higher hot water demands.
By considering factors such as your home’s hot water usage, available space, and budget, you can determine if a tankless water heater is the right choice for you. Consulting with a professional installer like us at Water Heaters Now will help guarantee that the unit is properly sized and installed to meet your specific needs. We want to maximize both your savings and comfort for years to come.
