Water Heating Costs

The domestic water heater may be either a tank-type or a tankless type, and use either gas or electricity as heat source.

Typical domestic tank-type water heaters range from 30 to 50 gallons and they require floor space to be installed. Tankless units are rated in gallons per minute (GPM) and range from 2 to 10 GPM. They can be wall mounted and located in reduced spaces.

You will find that gas water heaters are more expensive to buy than electric types even before considering the cost of gas ventilation and gas pipe requirements, but in most regions gas is the less costly heat source. Tankless heaters may cost more, but are considered lower cost to operate with their higher efficiency.

The cost to install average water heating depends upon type, heating flow and tank capacity, preparation and special needs, and the labor rate.

In the following table the Cost figure is based on replacing average water heating for a 3 to 5 person home; and includes old material removal and disposal, transport, new material and installation, equipment, and waste.

Electric w/ tankLower first costPrice of electricity$639

No vent and pipeCircuit availability
Gas w/ tankPrice of gasHigher first cost$826

Higher first costVent and pipe
Electric tanklessNo vent and pipePrice of electricity$1,057

Less spaceCircuit availability
Gas tanklessPrice of gasVent and pipe$1,077

Less space

Other considerations and costs

  • Typical upgrades and accessories are reviewed in the related Cost Guide.
  • These prices are for service in the immediate area of the provider.
  • Taxes and permit fees are not included.
  • Warranty extensions are available at extra cost.
  • Higher end models include Wi-Fi based monitoring and control devices.
  • Electric heaters are less of a location-planning challenge without venting or hard pipe, but the tankless units may require a special high power electric circuit.
  • Gas heaters require the installation of both an exterior vent and a gas-pipe supply.
  • Some gas heaters can be installed outdoors, saving the cost of a vent to the exterior.  
  • The cost to operate the heater follows the cost of gas or electricity in the region.
  • All types require strict compliance with all pertinent local codes and regulations.
  • Often times when a water heater requires replacement it turns out that the installation will need to be upgraded to latest codes and regulations regarding ventilation or earthquake preparation.
  • During contractor inspection the homeowner should be informed of any repair concerns like rot, and any cost to adapt the existing structure.

DIY considerations

  • In the very best of cases this installation may be suitable for the able DIY persons, but home insurance or local codes may require a licensed or certified installer.
  • In all cases there can arise issues best left to professionals to resolve on the spot.
  • A fairly complete plumbing tool set will be required, perhaps including a torch.


  • Craftsman Estimator Costbook, complete series year 2015.
  • Latest prices found on Home Depot and other vendor Web sites.
  • Literature review of DIY Web sites.

Cost to install water heating in my city

Cost to install water heating varies greatly by region. To get free estimates from local contractors, please indicate yours.