What Is The Cost Of Water Heater Replacement?

Are you thinking of replacing your water heater? Water heater replacement can be considered a real investment: it increases the value of a building if you’re selling, and it can allow you to save some money on your bills every month when you replace an old unit with a more modern one.


Of course, to understand whether or not the investment can be advantageous for you, you need to know how much you’re going to spend.

Well, you’ve just landed in the right place because we’re about to discuss what is the cost of water heater replacement.

Read: Why Is My Water Heater Leaking?

Also Read: Pros And Cons Of A Tankless Water Heater?

Water Heater Replacements: What Are The Costs?

Water Heater Replacements

So what is the cost of water heater replacement? When you replace a water heater unit, there are many costs that add up to one another. The first is, of course, the cost of the new water heater unit.

Then, there is the cost of the service workers are going to provide, which is usually not only the installation of the new unit but also the distillation, removal, and disposal of the old one. 

Make sure to check all of these costs before hiring a company.

Let’s start with the easiest: the costs for removal and disposal. Many companies remove your old unit for free. Or, better, the price includes the removal.

So, make sure to ask about it and choose a company that doesn’t ask for additional money to take care of this aspect.

The cost of the water heater depends on the type of unit you’re choosing. Standard tank water heaters are usually cheaper than tankless units, for example.

You can find the cheapest standard tank water heater for $300, while the most expensive tankless unit would cost $2000. 

So, to sum up, the price for a new water heater can vary from $300 to $2000 depending on the model and dimension.

Finally, there is the cost of the installation. Even in this case, we have different prices depending on what type of water heater you’ve opted for.

  • The costs for the installation of new standard tank water heaters would vary from $600 to $1800;
  • The costs for the installation of a new tankless water heater would vary from $800 to $3500.

As you can see, generally speaking, the installation of a new tankless unit is always more expensive than the alternative.

However, tankless water heaters provide tons of advantages, so they are very often worth the additional money you need to spend on them for both purchasing the unit and having it installed.

Another choice you have is between an electric and gas water heater: in this case, the cheapest option is an electric water heater, but it will determine higher expenses in the long term (higher electrical bills).

Gas water heaters are more expensive, but they determine lower expenses in the long term.

Read: How Does A Tankless Water Heater Work?

Factors Affecting Water Heater Replacement Cost

Factors Affecting Water Heater Replacement Cost

There are not one but many factors that affect the cost of water heater replacement, let’s have a look at the these one by one:


Many jurisdictions require you to obtain a permit to replace the water heater. This is done to ensure that the work and inspection is carried out adhering to the quality and safety standards. You may need more than one permits and the total cost for the same ranges from $50-$1500.

Removal of Tank

For the new tank to go in, you will need to get the old tank removed. Based on the size of the tank, ease of access, etc., tank replacement can cost you $100 to $500.

Expansion Tank

An expansion tank helps in preventing the tanks from bursting in case the water heater tank fails. Many building rules require you to get an expansion tank installed while replacing the water heater. And the installation of an expansion tank will cost you $40-$350.


Changing your water to a new fuel type, relocating it, or even upgrading it could add to the cost of installation. You might need to add a gas line ($250-$800), frame a wall ($200-$400), reroute your water line ($350-$1,700), etc. All these factors, among many others, can add to the cost of water heater replacement.

Labor Cost

The installtion cost of water heater starts from $150 and goes up to $1,000 or more depending on your plumber’s hourly rate, type of wate heater, its size, capacity, location etc.


If you are relocating your water heater in a different area that’s further away from the previous area then obvioulsy the cost of installation would be more. Sometimes, installing the water heater may call for making room for renovation, or it might simply need to fixed down stairs. You can expect to pay $150 to $3,400 depending on the complexity of job.

Cost of Water Heater Replacement by Type

Most households have electric or gas type water heater, the replacement of which ranges from $550 and $1,500. But there are many varities of each heater and the replacement cost of each one of them is different from the other. Let’s us have a look at them:

Type of HeaterMaterial & Labor Cost
Electric$600 – $3,500
Propane$700 – $2,500
Gas$700 – $2,700
Solar$1,700 – $5,500
High-Efficiency$1,500 – $3,000
Hybrid Heat Pump$1,200 – $3,500
Indirect$1,200 – $3,500


These are the most affordable types of water heaters, both in terms of price and installation. Electric water heaters may cost you low upfront. However, they are 95% less energy efficient and may impact your electricity bill, especially if you have a big family.


Propane water heaters are alternatives to gas, and these heaters are usually found in areas that are situated in villages or far away in hills or mountains. Replacing such heaters cost you $700 – $2,500.


Gas heaters are another popular choice among homeowners, and getting them replaced can cost you between $700 – $2,700. Although they cost more than electric heaters, they are energy efficient and help you save electricity costs in the long run.


These types of water heaters are pretty expensive to get installed. The installation and labor cost for such heaters costs $1,700 to $5,500, and it can even go up to $13,000 depending on the size, type, location, complexity of installation, etc. Although solar water heaters have more upfront prices, they incur almost nil operating costs.


These types of water heaters are 300% more efficient than regular water heaters. They come with leak detectors, quality insulation, smart controls, etc. Installing High-Efficiency will cost you $1,500 to $3,000, but these are environmentally friendly and energy efficient.

Hybrid Heat Pump

This type of water heater pulls the air from the surroundings and transfers heat using a coiled compressor. The cost of installation for this heater is $1,200 to $3,500, but if you have a small apartment or home, then you shouldn’t buy it.


These are the most flexible type of water heaters and are also budget-friendly. These can run on gas, propane, electricity, etc., and costs $1,200 to $3,500 to install.

Water Heater Replacement Costs by Location

Boston$1,050 – $1,950
Dallas$1,050 – $1,900
New York$1,000 – $1,700
Chicago$800 – $1,400
Jacksonville, FL$700 – $1,200
Minneapolis$800 – $1,600
San Francisco$1,150 – $2,100
Washington, DC$950 – $1,900
Boise, ID$1,400 – $2,150

Additional Water Heater Replacement Costs

Changing fuel type$500 – $2,000
Tax credits $150
Warranties$100 – $300
Carpentry Work$200 – $2,900
Electrical Work$50 – $100 
Water Line Installation$350 – $1,900
Gas Line Installation$275 – $825
Water Heater Removal$100–$500

Water Heater Replacement Costs by Brand

AO Smith$400 – $3,500
Whirlpool$350 – $1,500
Kenmore$350 – $1,000
Rheem$400 – $2,300
Bradford White$400 – $3,000

Mistakes to Avoid While Installing a Water Heater

Cost of Water Heater Installation

Cost of Water Heater Installation

Replacing a water heater or installing a new one invoves a lot of costs. Let us have a look at them one by one:

Tank Vs. Tankless Water Heaters

The type of water tank you choose impacts the cost of replacement of the water heater. A tank water heater runs on propane, electricity, fuel, or oil and lasts for up to 10-12 years. Getting a tank water heater installed can cost you $650 and $2,100.

On the other hand, a tankless water heater runs on electricity or gas, provides an unlimited hot water supply, and often lasts more than 20 years. Installation of a tankless water heater will cost you between $1,000 and $3,500.

Electric Vs. Gas Water Heaters

The water heater runs on either gas (propane or natural gas) or electricity. Gas water heaters are usually more expensive than the electric water heater. Getting an electric water heater will cost you $100-$200 less as compared to a gas water heater.

Tank Size & Water Heating Capacity

The water heater tank size directly affects the price of the heater. Tank-style heaters come in the size of 20-80 gallons. And in the case of a tankless water heater, the tank size is calculated as per the flow rating of GPM or gallons per minute. Here’s a table showing the price of installation of a water tank based on its size:

PeopleTank PriceTankless Price
1-2 People$270-$900$250-$600
3-4 People$320-$2,200$400-$700
5 or more People$400-$3,000$500-$900

Power Vent Vs. Direct Vent

Water heaters with Direct Vent use a flue pipe above the unit to discharge exhaust, while Power Vent uses PVC pipe to discharge exhaust vertically or horizontally. Heaters with Power Vents are more energy efficient as compared to Direct Vents, which is why Power Vents cost $300 to $600 more than Direct Vents. And installing a direct vent can cost you $500 to $1,000

How To Replace a Water heater Yourself? Step-By-Step Guide

Buying Guide for Water Heaters

Wrap Up

As we saw in this article on what is the cost of Water Heater Replacement, there are not one but many factors that affect the price of replacement. The size, type, labor cost, permit, etc., are some of the important factors to consider. We hope you found this guide useful.


What is the average life of water heaters?

A water heater lasts for an average of 12-15 years. Some high-quality water heater also lasts up to 20 years.

What are the signs that my water heater is deterioating?

If you find the below-mentioned issues with your water heater, then it is a sign that it is running out:

  • You run out of hot water quickly.
  • The heater is frequently leaking.
  • Water does not heat up.
  • You notice discolored water coming out of faucets.
  • The water temperature is inconsistent

Is it worth hiring a professional for installation of water heater?

Yes, we suggest you to hire a professional to get your water heater installed because there are a lot of things to consider while doing this. And if you make a mistake with any step of the installation, then fixing the issue will cost you much more than hiring a professional.

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