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How Much Does It Cost To Install A Water Heater?

Typical Range: $766 - $1,442

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On This Page:

  1. Tank vs. Tankless
  2. Gas Vs. Electric
  3. How Big of a Water Heater Do I Need?
  4. Signs You Need a New Water Heater
  5. Popular Brands
  6. Conclusion

Water Heater Cost Calculator

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National Average
Typical Range
$766 - $1,442
Low End - High End
$325 - $12,000

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Cost data is based on actual project costs as reported by 20,872 HomeAdvisor members in .

Hot water is an essential part of modern life, a necessity rather than a luxury. So choosing and installing a water heater is a very important decision in the life of your home. Whether you are replacing an old water heater or installing a brand new system, you may be concerned about the price. There are a number of factors that play a part in the cost of installing a new hot water heater.

Tank vs. Tankless

Average cost with installation:

  • Tank - $889.00 (40 to 50 gallon tank)
  • Tankless - $3,000.00

Water heaters come in two different styles: tank and tankless. Both heat your water, but they do it in different ways. A tank style water heater stores a given amount of water, usually 40 to 50 gallons, and keeps it heated to the temperature you set it at, sending it along when you open the hot water tap. A tankless system doesn’t store the water and heats it only when you need it by means of a series of super-heated coils. Each kind has its good points and bad points:



  • The technology is proven and works well
  • Cost is about half that of a tankless water heater
  • Installation is easier
  • Advances in technology and materials have increased their efficiency
  • Can handle large demands on the hot water supply
  • Short installation time, about 2 to 3 hours


  • The system is always on, heating the water even when you don’t need it
  • Tanks take up a lot of room
  • Only about 70% of the water in the tank is available for use making a 30% energy loss
  • Can only be installed indoors, often must be on an elevated platform, be strapped in, and many must have insulating water heater blankets wrapped around them
  • Lifespan is only around 12 years



  • Can save you about 25% on your water heating costs annually
  • Has only a 5% energy loss compared to a tank system’s 30%
  • Will never run out of hot water
  • Smaller than a conventional water heater
  • Can be installed anywhere inside or outside of the house, even as individual units for specific appliance/applications
  • Lifespan is around 20 years


  • Cost twice as much as conventional water heaters
  • Installation is expensive and includes special piping and good venting
  • Retrofitting your home for a tankless system is also expensive and very complicated, sometimes as high as $3,000.00
  • Electric-fired units are inadequate for whole-house use and none of this kind have Energy Star ratings. For your whole house, gas is the most efficient
  • Can’t handle high demands. Installing multiple units for your appliance to meet peak demands defeats the energy-savings aspect and can even be detrimental
  • Long installation time, about 10 hours

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Gas vs. Electric

Water heaters are either gas-fired or electrically-fired. The difference between the two is how the water is heated, via natural gas or electrical resistance coils. Gas water heaters are less energy-efficient than electric water heaters, but the cost of electricity can still make gas the less expensive choice. Here are some other points of comparison between the two:



Energy Source

Whatever your city uses

Natural gas

Works During Power Outage




About 12 years

Recovery Rate

About 14 gallons per hour

About 50 gallons per hour

Energy Efficiency


60% - 70%

Cost Over 12 Year Lifespan



Price of Unit

$300.00 to $2,880.00

$250.00 to $1,500.00

For a large family of 5 or more people, a gas water heater will be the most suitable. The fast recovery time will ensure that you have enough hot water for your needs in as short a time as possible. Even the on-demand tankless water heaters can’t keep up with the high demands of a large family and will slow the water to a trickle the higher the demand gets.

Small families and studio apartments can often use an electric or tankless water heater (if the apartments are on individual units). With a tankless system, the relatively low demand on the water heater allows you to take full advantage of the energy efficiency without taxing the unit.

Solar Water Heaters

Some people supplement their hot water system with a solar water heater. While these can help increase the hot water available for your family, they are also very expensive. They can cost over $1,000.00 at their base price, and the amount of savings varies widely according to your use.

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How Big of A Water Heater Do I Need?

To determine what size water heater you need, keep in mind that bigger isn’t always better. A conventional water heater is running all the time, so it will waste money to heat water that you’re never going to use. Fortunately, calculating what size to get is easy, requiring only simple, grade-school level math.

First you need to figure out your FHR (First Hour Rating). This is the amount of water you’ll use during your home’s peak time of water usage. This is usually first thing in the morning when everyone is taking showers, brushing their teeth, filling the coffee pot, etc. To do this, count the number of people in your household (or, if the house is currently unoccupied, count the number of bedrooms) and add 1. A four-bedroom house, for example, would come out to 5. Multiply that number by 12, the estimated gallons of hot water each person will use. For this example, the total is 60. (4+1=5, 5x12=60).

Now that you know your home’s FHR, you’ll want to get a water heater with the highest energy factor (EF) that you can afford. All of this information should be on a yellow label on the water heater.

The average water heater for a family of 5+ is around 50 gallons. The average FHR for these units ranges from 67 on the low end to 81 on the high end.

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What Is An Expansion Tank, and Do I Need One?

To begin with, let’s revisit grade-school science: hot water expands.

Water is not compressible, which means that as it heats up, it will not press in on itself. It will look for somewhere to go. Check valves keep the expanding water from flowing back into the municipal water supply. This helps your municipality protect the city water supply from contaminants.

So where does that water go as it expands? Most water heaters have a little room inside for expansion. However, even though water doesn’t normally expand by much, any system can fail. In this case, the expanding water flows into the expansion tank. The expansion tank is usually more than adequate to handle the anticipated pressure from your tank.

Do you need one? Yes. Without a safe place for the expanded water to go, you can experience a total failure of your water heating system. This is a fancy way of saying that your water heater and/or pipes can burst. Many codes today require an expansion tank be installed with new construction. For a retro-fitting, most expansion tanks cost between $40.00 and $70.00. Someone who is handy with tools can install their own. If you have any doubts, though, call a plumber. This project involves gas and/or electrical lines.

Water Heater Installation Cost by Location

City or StateAverage Cost Range
San Diego$935-$1,580
Los Angeles$950-$1,730
San Francisco$1,050-$1,835
New Jersey$975-$1,470
Cost data is based on actual project costs reported by HomeAdvisor members.

Signs You Need A New Water Heater

Do you need a new water heater? Here are some easy ways to find out. Some may require a little periodic checking while others become obvious only after things have gone wrong:

  • The water is coming out rusty or some other non-clear color.
  • The water isn’t getting hot enough.
  • The water isn’t getting hot at all. While this could indicate the pilot light is out or the circuit breaker has been tripped, it can also indicate a failure of the whole heating system.
  • If the water has a strange odor or metallic taste, it’s a sign that the water heater is breaking down.
  • While a water heater normally makes sounds as it operates, loud pops and cracks indicate that the heating element is failing.
  • Leaks around the water heater are a significant sign of trouble. This indicates major failure going on internally. Shut off the electricity or gas to the system and let it cool down before replacing it.
  • If it’s over 10 years old, it’s nearing the end of its life expectancy.

When it comes time to replace your water heater, it’s best to call a professional. This way you can be sure that everything has been done safely and to code.

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Popular Brands

The most popular brands of water heaters are popular for a reason. They are reliable, affordable, and readily available. Some brands, such as AO Smith, are sold exclusively by plumbing wholesalers and contractors. Others are available at your local hardware or home improvement stores.

  • AO Smith – about $500.00 to $600.00
  • Bradford White – about $700.00
  • Rheem – about $400.00 to $500.00
  • Kenmore – about $350.00 to $500.00
  • Whirlpool – about $375.00 to $475.00

The costs above are estimates for the water heater only. They are for the common 40- to 50-gallon capacity units and do not include installation, transportation, or other additional costs.

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In Conclusion

A water heater is a must in your home. As technology advances, the efficiency of these systems will increase, making hot water even more affordable than before. Though some systems can be installed DIY, it’s best to call a professional to be sure the job is done right.

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