How much does a Water Heater Cost?

Is it time to replace your old water heater, and you’re wondering how much it costs?

Well, there is straight answer to the question: how much does a water heater cost? Because it all depends on what type of water heater you’re purchasing.

More precisely, there are several factors that affect the price of a water heater: when you know what they are, you know how to optimize features and price when you purchase your next water heater.


Factors involved in the water heater price

Before digging into the average prices for each type of water heater, let’s take a look at the factors that are involved in the water heater’s price.

  • Tankless or tank-based. This is probably the main aspect that decides the cost of your new power heater. Tankless water heaters are way more expensive than the alternative. They can even cost two or three times the price of a tank-based water heater. However, they may be more expensive, they are more energy-saving, and they are more durable. In the long term, therefore, the tankless unit could be the cheapest option.
  • Efficiency rating. As you may know, every home appliance comes with an efficiency score. High-efficiency models are better because they cut down your monthly expenses, but they are more expensive.
  • Size: of course, the bigger your water heater, the more expensive it’ll be. In particular, if you’re purchasing a tank-based water heater, there can be a lot of difference between the price of a small unit and the one of a bigger unit.
  • Gas or electric unit. Electric units are cheaper, but they determine a higher cost in the long term. 

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How much does a water heater cost?

The average price for a tank-style water heater is around $1500. It could be lower if you purchase a small electric water heater. It could be higher if you’ve opted for a big tank-style gas water heater.

Tankless water heaters can cost about $2000. The price for tankless water heaters doesn’t vary as much as tank-style units because there are fewer variables at play.

Tankless water heaters, for example, are almost certainly gas units, and their dimensions don’t vary a lot (they don’t need to store water).

What is a Tankless Water Heater?

Tankless Water Heater

As the name suggests, tankless water heaters come without a tank and heat the water as and when it is used.

However, these water heaters cost more than a tank water heater upfront. The running cost of tankless water heaters is really low, and these are extremely energy-efficient too.

Here are different types of Tankless Water heaters that you can buy:

  • Electric: Electric tankless water heaters are extremely popular among homeowners and are energy efficient too.
  • Oil: These types of heaters are difficult to find; they heat water quickly and are extremely energy-efficient, but they will cost you more than a gas or electric water heater.
  • Gas: Gas water heaters are a great choice as compared to the electric water heater. They are safe to use and are best for cold locations.
  • Solar: If you live somewhere that gets ample sunlight throughout the year, you should go with this type of water heater. Although solar water heaters are expensive to install, their operating cost is almost negligible.
  • Whole House: This type of water heater provides hot water to the entire house and is expensive. If you have a large house, more number of people, and more requirement of hot water then you should get this one.
  • Single Point: This type of heater provides hot water in a single room only, and it is a good choice for one or more people. 1

Tankless Water Heater Cost Based on Type

Let us have a look at the unit price of different types of Tankless Water Heater:

Type of Tankless Water HeaterUnit Price
Electric$152.89 – $586.06
Gas $346.54 – $1630.78
Commerical Gas$5096.20 – $7644.30
Tankless water heater (all types)$152.89 – $1630.78

Tankless Water Heater Cost Based on Size

The capacity of Tankless Water heaters is measured in a flow rate of gallons-per-minute (GPM). Let us have a look at the unit price of these heaters based on their size:

Number of PeopleGallonsUnit Price
1-2 People2 to 3 gpm tankless$250 to $600
3-4 People3 to 5 gpm tankless$400 to $700
5 or more People6+ gpm tankless$500 to $900


Tank Water Heaters

Tank Water Heaters

This type of water heater has been in use for over a century. They come in tank sizes of 30-80 gallons, and 85% of households in the U.S. have this kind of water heater.

Tank water heaters cost you $650 and $2,100 on average, including labor, heater, and material cost.

These also come in a variety of categories, such as Electricity, Propane, Gas, Fuel, Solar, etc., and lasts for 12-15 years on average. 3

Tank Water Heaters Cost

The size of the tank you choose mainly determines the price of this type of heater. Let us have a look at the various tank sizes and their Unit price.

Number of PeopleGallonsUnit Price
1-2 People20 to 30 gallon tank$270 to $900
3-4 People30 to 50 gallon tank$320 to $2,200
5 or more People50-plus gallon tank$400 to $3,000

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Additional costs

When you are replacing your old water heater, you should never limit the price of the new unit because there will be additional costs.

The main additional cost is the installation: the company that sells the unit usually takes care of the installation, but it won’t come for free.

You can consider between $150 and $600 of additional installation cost.

If you’ve opted for a tank-based unit, the installation would be cheaper; if you have a new tankless water heater, the installation will be more expensive.

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When thinking about what type of water heater to purchase next, make sure you take into consideration:

  • the price of the new unit
  • the expenses in the long term (energy efficiency)
  • the installation costs.

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How to maintain a tankless water heater?

Tankless water heaters are a less risky option in terms of leaks and damage, but still, you should take care of the following things to make sure it lasts long:

  • Do a yearly descaling to avoid sediment buildups
  • Get it checked by a plumber yearly
  • Turn off the heater when not needed
  • Drain and flush the valve in every 8-12 months


Which type of heater is better tankless or tank water heater?

Both types of water heaters are good. Tank water heaters are less expensive than tankless water heaters, but their running cost is high, and vice versa.

You can check out the video shared above to learn more differences between the two.

What is the average life of a water heater?

The average life of a water heater is 12-15 years.

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