How Much Does It Cost to Install a Tankless Water Heater?

If you’re asking how much does it cost to put in a gas tankless water heater, we’re going to need to do a little digging around.

There are a few variables, such as what type of tankless water heater, ie gas or electric, and whether it will go inside or outside.

In this article, I am going to go over the different factors that will determine how much it costs to install a tankless water heater, what the installation requirements are and if you should consider installing a tankless water heater yourself.

There’s a lot to think about so let’s dive right in.

Gas tankless water heater installation cost

Since the price of installation for a tankless water heater varies wildly between electric and gas, we need to take a closer look at each individually.

For a very ballpark figure for the cost of installing a gas tankless water heater, we are looking at a national average of between $1000 and $2000 to install.

This is for a pretty straightforward installation. What does a straightforward installation look like?

How close the price will be to $1000 or to $2000 depends on where you are in the country, first of all. But, also how complicated the ventilation was. In other words, did they have to drill through brick? Was the vent concentric or did they need to drill two holes? How far was the unit from the gas meter?

All these things matter in the installation cost.

Where it gets more complicated, thus expensive is when we are talking about an old house that needs to be retrofitted.

You also need to pay attention to whatever your local ordinances are. I wrote a very detailed article outlining some of the things to keep in mind before you install your tankless water heater. You really need to read this before you begin your installation.

When gas lines are too narrow and need to be upgraded, when a gas meter needs to be changed, when ventilation needs to be run too far from the unit, these things all increase the costs in a big way.

Electric tankless water heater installation cost

Generally, the cost of an electric tankless water heater installation is a lot less than that of a  gas tankless water heater.

Mainly because electric on demand water heaters don’t need to be vented. There are no gases combusting so they can be mounted anywhere.

Adding to the low cost to install is the fact that most houses are already wired to draw the correct amperage and don’t need to be retrofitted.

If you are installing a point of use water heater then that is not only something you can generally do yourself, but if you do need to hardwire directly to the circuit breaker it can be done quickly by an electrician.

If your home is not up to code, then this is going to add a lot to the costs since the electrician or plumber will need to bring the house up to code and also possibly pay for permits.

Electric tankless water heater installation requirements

Before you can determine what the costs to install an electric tankless water heater, you have to determine how big it is going to be. How many gallons per minute you need should be calculated so you know the size and thus the electric requirements that your house needs to have.

First, go to my article about how to size a tankless water heater so you can figure out how big of a unit you need.

Then, go check out my list of the best electric tankless water heaters.

Once you know the size you need and have a type of electric on demand water heater in mind, you can get an idea of if it can even work for your houses electric set up, or if you need to upgrade.

Here is a handy chart with a few models and brands so you can get an idea of what you need before you can think about installing.

How long does it take to install a tankless water heater?

A typical electric tankless water heater takes about 3 to 4 hours to install on average. This is if it is a whole house unit that needs water lines run to it and if it has to be hardwired. A point of use can be done in less than an hour in most cases.

A gas tankless water heater needs more time since it almost always ends up needing a vent installed which requires drilling through a wall.

Expect a gas on demand water heater installation to take the better part of a day. In other words, plan for 7 or 8 hours for labor costs.

Installing a tankless water heater yourself

Many people ask if it is possible to do a DIY tankless water heater installation.

The answer is probably, but it is probably worth it to hire a professional.

I am not the handiest person and have watched countless videos on installing one. And I still feel like I wouldn’t want to tackle it. Especially when installing a gas or propane tankless water heater. The risk of a gas leak frightens me. If you have experience with this, then by all means go ahead. You will save quite a bit of money.

Keep this one important fact in mind: If you install a tankless water heater yourself, and there was a malfunction of the unit due to a mistake on your part, then the warranty is void.

If you decide to go ahead and want to know how to install a tankless water heater, watch these installation videos to see if you think you can handle it.

How to install a tankless electric water heater video

How to install a gas tankless water heater video

The unit in the video is a Bosch, but my personal recommendation is a Rinnai. I think they are the best gas tankless water heater. Here is a link to the whole range of Rinnai natural gas on demand water heaters. You can go to the product information page I just linked to to check the price, or if you want to read reviews then check out my guide on the best gas tankless water heaters here.  

Keep this tankless water heater installation diagram handy so you can get an idea of how the set up should look.

Another great alternative if you want to do your own DIY tankless water heater installation, is to install an outdoor inline water heater.

There is no venting required, so the installation is easy and fast. If you do it yourself you are cutting down on how labor intensive it is for yourself. And if you opt for a professional installation, then it will also cut down on the hourly labor cost.

There are a couple of things to consider before you opt for an outdoor tankless water heater:

1. If you live in a cold area, you can’t use an outdoor unit if it gets below freezing regularly.
2. You have to pay attention to local regulations with regards to how close the unit sits to a window. This may mean you have to run a long length of piping if you are constricted with where you mount it.

What to keep in mind

When it comes to operating costs, there is no question that tankless water heaters are far more efficient than a tank system. With a savings of around 30% per year off your energy bill, a tankless can pay for itself in just a few years.

That is until you factor in the installation.

One of the biggest downsides to tankless technology is how expensive it is to install.

In some cases a tankless water heater doesn’t come with the venting kit and needs to be bought separately, which does add to the cost. The benefit is that you can customize your own vent depending on your circumstances. I wrote a detailed article about the different types of vents available so go ahead and click that link to learn all about it.

I hope that by reading this guide on tankless water heater installation you understand the costs better and can make a decision that is right for you and your family.

My opinion is that tankless are worth it when you have a modern house that was built in the last twenty years or so. If you have to retrofit the costs can be prohibitive.

If the savings is not your motivating factor, but, rather the fact that you just want endless hot water, then it is worth it.

Yes, it will take longer for the unit to pay itself off, but since they last so long, it probably will end up being cost neutral by the end of its lifespan.

Got any questions about how much it costs to install a tankless water heater? Drop a comment in the box below so I can help you out!