On average, the cost of tankless water heater installation in 2023 is $800, according to Forbes. However, there’s a high degree of cost variability. Depending on the type of unit and various other factors, you could spend between $170 and $2,300.¹ Angi has even higher estimates, with an average installation cost of $2,529 and as much as $5,800 on the high end.²
Tankless water heaters come in several forms and are more efficient than traditional water heaters. They avoid having to store and continually heat water in a tank. A tankless unit runs only when you open a hot water tap and is more compact. Therefore, you can fit one in a closet or laundry room without taking up much space in your home.
If these sound like enticing perks, here’s a closer look at the average cost of tankless water heater installation.
Point-of-Use vs. Whole House Tankless Water Heaters
A point-of-use or single-point tankless heater serves as a single faucet or shower. It can be an economical solution for a garage, workshop, or guest house. The unit may cost $100 to $300 but must be installed close to the fixture where you need hot water.¹ But when purchasing single-point heaters, you may end up requiring multiple units to serve different rooms, so buying them in bulk will impact the total cost.
Whole-house systems are much larger and cost much more. An electric unit costs up to $800 on average, a gas-powered system can cost from $230 to $2,300, and propane-powered heaters run from $195 to $2,200. However, oil-fueled tankless water heaters range from $1,000 to $3,000.¹ Therefore, fuel type can have as much of an impact on cost as the type of tankless water heater, with solar heaters being the most costly.
Tankless Water Heater Installation Labor Costs
Labor is a significant cost factor when installing a tankless water heater. It can add $500 to $3,000 to the cost of the project. Point-of-use models require less work to install, so you’ll pay on the lower end for labor. Depending on the system, you might also need plumbing or electrical work, while gas-powered units may require work on your gas line, which increases labor costs.
Using the same fuel source as you did for your tank water heater may be an option. Changing the heating source requires the help of skilled professionals. Plumbers charge between $45 and $150 per hour, while electricians charge $50 to $100 per hour. Converting fuel sources takes at least a couple of hours to complete.
Cost vs. The Size of Your Tankless Water Heater
The size of tankless water heaters is measured by their output in gallons per minute (GPM) and the amount of temperature rise they can handle. Residential tankless units range from 2 to 10 GPM. To calculate size, consider that a typical faucet requires 1 to 2 GPM, a showerhead 2 to 3 GPM, and a washing machine 2 to 2.5 GPM.
Temperature rise refers to how much the unit needs to raise the water temperature. If the incoming water is 50℉ and you need hot water at 120℉, the temperature rise will be 70℉. But climate and geography can affect groundwater temperatures and the amount of temperature rise (and thus the type of tankless water heater) you need.
The output of gas-powered tankless water heaters is measured in British Thermal Units (BTUs). Higher BTU units can heat water more quickly. But as with any system that provides more output, the more BTUs a heater is rated for, the more it will cost.
Cost of Condensing vs. Non-Condensing Units
A condensing tankless water heater typically costs more than a non-condensing one but runs more efficiently. It contains a second heat exchanger that can add more heat to the water. Reducing the exhaust gas temperature causes the gas to condense, increasing the flow rate. Adding a heat exchanger increases installation costs. However, non-condensing units require a different venting system to handle higher temperatures, which has cost implications.
Additional Tankless Water Heater Installation Costs
When installing a tankless water heater, you’ll also need to consider the cost of materials. For example, a termination vent kit can cost $40 to $100, a gas connector kit can cost up to $40, and hardware and fittings can cost $10 to $30. Materials can add, on average, up to $280 to the project cost, and piping costs about $10 per linear foot.² You’ll also need to obtain a permit from a local regulatory agency, which requires paying a fee and hiring a qualified professional.
Is a Tankless Water Heater Worth It?
Whether a tankless system is worth it depends on your home’s hot water needs. You’ll need a higher flow rate system for a larger home and if your family uses lots of hot water. However, tankless water heaters are more energy efficient than traditional systems. Therefore, some of your investment can be recouped from monthly savings on your utility bill. Also, check for available tax credits and rebates that can make your investment more affordable.
Contact Monarch Home Services
Homeowners throughout the San Joaquin Valley rely on us to install tankless water heaters. We also provide repair and maintenance services. A tankless unit lasts longer than a conventional one; it also saves energy, provides unlimited hot water, and has a compact design. If it’s time for an upgrade in your home, request service online or call (661) 215-6580 today to schedule tankless water heater installation.