Water heaters are essential to the functionality and comfortability of the modern home. The appliance provides hot water for everyday activities such as cooking, washing dishes, laundry and bathing. When a water heater isn’t functioning properly, it may need replacement.
The average installation cost ranges from $1,600 to $5,400, according to estimates from Home Depot. This range includes costs for the water heater itself, permits, installation materials and labor and removal of the old unit.
“Prices are always changing with the economy and vary quite a bit depending on what part of the nation you live in,” said Chris Serna, operations manager at Pipe Wrench in Knoxville, Tennessee. “Many people always want to shop for the lowest price. However, cheaper isn’t always better.”
Many people always want to shop for the lowest price. However, cheaper isn’t always better.
Chris Serna
Before you install a new water heater, consider several factors, including a tank or tankless model, the fuel type, size, capacity, warranty and energy efficiency.
How much does water heater installation cost?
Labor and materials can significantly impact the overall cost of water heater installation. According to Energy Star, a recent informal survey of contractors showed labor and materials range from an estimated $1,000 to $3,000 in addition to the cost of the water heater. Some professionals might charge a flat rate for installation, though most work under a cost model of an hourly rate plus materials costs.
A general rule is that the installation cost may be roughly equal to the price of the water heater itself. However, several factors affect each individual cost. This includes condensation management, air space, venting, sound management, orientation, thermostatic mixing valve and additional electrical permitting.
What are the main types of water heaters?
Several water heater models are available in today’s market. Tank and tankless are the most common types of heaters. Hybrid and point-of-use models are also popular. Choosing the right type for your home is important to keep your plumbing in working order.
Tom Diciolla, owner of Restore Plumbing and Drain in Elgin, Illinois, explained there have been many technological and efficiency changes in water heaters over the last few years.
“The most common type of water is still a tank-style water heater powered by gas or electric,” Diciolla said. “Tankless water heaters can be a great option for most homeowners and be very cost-effective over their life span. One of the newest technologies available for tank-style water heaters is hybrid water heaters that operate via electricity and a heat pump. These units can often be 300% to 400% more efficient than a standard water heater.”
The chart below shows the minimum and maximum average costs of four common types of water heaters plus installation.
Tank
If you’re replacing a standard electric water heater with a heat pump, a new unit typically costs $1,500 to $3,000, according to our research. This does not include applicable tax credits, rebates or utility incentives. Split-unit models, which become a consideration if your space is constrained, can cost several times more.
“For a standard electric or atmospherically vented gas water heater tank that's 40 or 50 gallons, as is most common for single-family residential applications, a homeowner should budget between $1,500 and $2,500 for a water heater tank replacement,” said Pat Cronin, co-founder of Cronin Plumbing and Heating in Hoboken, New Jersey. “As with many other services and products, the cost of living in your geographic area has an impact on the cost of your water heater tank replacement.”
The cost of living in your geographic area has an impact on the cost of your water heater tank replacement.
Pat Cronin
Here are the price ranges for different-size storage tank water heaters at Lowe’s, a major home improvement retailer.
| Water Heater Tank Capacity | Cost Range |
|---|---|
| 30 gallons | $400–$830 |
| 40 gallons | $380–$1,292 |
| 50 gallons | $430–$2,680 |
| 75 gallons | $1,600–$1,700 |
| 80 gallons | $2,250–$3,260 |
Your household’s size should determine the tank size. Home Depot recommends the following tank sizes based on the number of people in a household:
- 23 to 36 gallons for one or two people
- 36 to 46 gallons for two to four people
- 46 to 56 gallons for five people
- 60 gallons or greater for six or more people
Tank water heaters can be fueled by electricity, gas or both, with the natural gas water heaters typically costing more than electric ones. A water heater tank can consume significant power and raise energy costs, so look for a high-efficiency model.
For a gas or propane storage water heater, cost impacts include electrical service capacity, sealing of vent penetrations, proper sizing, electrical availability and capping the gas line if you’re converting from gas to a heat pump water heater.
Tankless
Unlike traditional tank water heaters, tankless units work by circulating water through a coil system and heating the water as needed instead of storing it in a tank. If space in your home is limited, a tankless option could be the best fit.
Tankless water heaters range from $120 to $2,760, based on units we found at Lowe's. Pricing varies depending on brand, warranty type and fuel source (liquid, propane or natural gas). Prices can also be increased by features such as hybrid heat pump technology, a temperature and pressure relief valve, a high-altitude model, Energy Star certification, and Bluetooth and WiFi capabilities.
A tankless model's main selling point is a continuous hot water supply. “A tankless water heater does not have storage capacity but instead only heats the water when a hot water faucet is turned on,” said Mark Collins, CEO of 1-800-Plumber + Air. “It is heated on demand.”
“The benefit of this is it can supply an endless supply of hot water, which can help you avoid taking cold showers if you are last in line. They also can help save money in the long run as they do not use much energy when no water is running,” Collins added.
Hybrid
A hybrid water heater, or heat pump water heater, combines new and old technology. These units use a standard tank, similar to traditional water heaters. Hybrid water heaters take in heat from the air and heat water through a converter. They have a backup system that can produce hot water quickly, but not as fast as a tankless system.
A hybrid water heater may cost around $980 to $3,260, based on units available at Lowe’s.
Point-of-use
A point-of-use water heater is a small unit installed near the fixtures it supplies. These units can be gas or electric. We shopped Lowe’s for point-of-use water heaters and found models available for $120 to $1,000. Pricing depends on tank capacity, if the unit is tankless, power source (gas or electric), fuel type (natural gas or liquid propane) and if the unit is under warranty.
Should you hire a professional or DIY for water heater installations?
While homeowners can install a new water heater on their own, plumbing experts say the job is better left to the pros. If a homeowner plans to replace the water heater themselves, there are several safety measures to consider.
The energy source for any water heater, no matter if gas or electric, has the potential to cause serious bodily harm. Water heater voltage can be deadly, and gas leaks can cause explosions.
Pat Cronin
“They need to ensure they know how to properly turn off the water to the home, be able to safely turn off and disconnect the fuel source, whether gas or electric, and know how to safely install a new one,” Collins said. “Going back with how the old one was installed is not always the best approach, so researching proper installation procedures is recommended to avoid leaks, fires or harmful gases being emitted into your home.”
Safety and budget aren’t the only factors to consider. “Leaving a water heater installation to a skilled professional and licensed plumber is always going to be the best option, not only for safety but for warranty purposes as well,” Serna said.
He advised that homeowners do the job themselves to be familiar with the home's water pressure and to check for gas leaks. You should also see if your municipality requires a permit and if any code violations need to be corrected.
“Many old water heaters were installed under a different code year, and the codebook has since been updated,” Serna said.
Other plumbing experts emphasized concerns about safety and potential damage.
“Installing a water heater is a job best left to professionals other than for the most experienced DIYers,” Cronin said. “The energy source for any water heater, no matter if gas or electric, has the potential to cause serious bodily harm. Water heater voltage can be deadly, and gas leaks can cause explosions,” he added.
“Likewise, a mistake in a water heater installation can carry a lot of property damage liability,” he said. “One bad water-side connection could fail and cause costly property damage. You are best seeking a licensed, fully insured professional for this type of work.”
What other costs should you consider for a DIY job?
Depending on where you live, you may need plumbing permits, electrical permits or both to install a water heater properly. Check with your local government about the requirements and costs of these permits. Costs vary by municipality. For example, a permit for a “general miscellaneous project” in Tampa, Florida, costs about $180.
Cronin pointed out that purchasing specialized equipment for an installation project can come with significant upfront cost factors for homeowners.
“Water heater installations require a number of specialty tools,” Cronin said. “The investment in these tools, especially for homeowners who may not install another water heater or complete another similar plumbing project for another 10 years, can change the cost versus benefit calculation for DIY.”
Here are the tools and materials you’ll need for a DIY water heater replacement job, some of which you might already have on hand:
- Adjustable wrench
- Gloves
- Hand truck
- Pencil
- Pipe cutter
- Safety glasses
- Screwdrivers
- Voltage detector
- Buckets
- Drain pan
- Flexible hose kit
- Garden hose
- Hand pump
- Pipe fittings
- Plumbers tape
- Plumbing pipe
- Pressure gauge
- Pressure-reducing valve
- Pressure tanks
- Thermal expansion tank
- Wire connectors
Prices for these tools vary. For example, a voltage tester could cost anywhere from $13 to $56 if you’re shopping with a retailer such as Lowe’s. Expansion tanks come with price tags ranging from $40 to $60. Pipe cutters can cost as little as $10 or as much as $100.
While installing a new water heater yourself might save money on labor costs, it could cost you more in the long run.
What are the signs it’s time to replace your water heater?
You likely notice signs if your water heater needs to be replaced or repaired. Higher utility bills are often one of the first indicators of something wrong.
Here are some other signs to look out for:
- Cold water: Once the unit stops or delays producing hot water, you know there’s an issue. Cold water could be an indication of a broken heating element.
- Leaks: Leaks are typically caused by pressure buildup inside the tank, which happens when the water temperature or pressure is too high. Signs include puddles around the water heater base and corrosion on the side of the tank.
- Noises: Loud noises, such as a knocking sound, usually indicate sediment buildup. Hardened sediments move around the tank, causing gurgling, rumbling or knocking noises. Have your unit regularly flushed out to avoid this problem.
- Water discoloration: Rusty or cloudy water is a good sign that your water heater is underperforming. Rust-colored water could mean a part needs to be replaced or the tank itself has begun to rust. Cloudy water is usually a sign of sediment buildup.
What is the life span of a water heater?
Projected life span and maintenance tasks vary depending on the type of hot water heater. With proper maintenance, a tank water heater should last six to 12 years, while a tankless model can last for over 20 years.
Since water heaters are expensive, we recommend getting a longer warranty on your unit. Major retailers such as Lowe’s include warranties of up to 10 years with some of their installations. Ask your plumber what warranty options are available before installing the new unit.
Routine maintenance will help prolong the life of your unit. It’s recommended that the tank be drained, flushed and cleaned at least once a year. Those living in an area with hard water should consider servicing their unit every six months. You may be able to avoid replacement and repair your old unit if it is less than 10 years old and a replaceable part is failing.
Replaceable parts include the following:
- Burner assembly
- Heating elements
- Igniters
- Motors
- Thermocouples
- Thermostats
- Valves
Are there incentives and rebates for water heater replacement?
Incentives and rebates are available for some water heaters, especially those built for energy efficiency. The federal government offers a tax credit on the purchase and installation of select heat pump water heaters. Heat pump water heaters that earned the Energy Star label are eligible for the credit. The offering is 30% of cost up to $2,000. The tax credit began on Jan. 1, 2023, and lasts through Dec. 31, 2032.
The Energy Star Rebate Finder can help you check for additional promotions.
What’s next?
Water heaters are a central part of a well-functioning home, so installing a new unit shouldn’t be taken lightly. We recommend hiring a professional for any plumbing or electrical work required for the job. Leaving the installation to the professionals can save you from potentially dangerous scenarios you might encounter if you did the job yourself.
“There are a lot of choices when it comes to choosing a plumbing company to install your water heater,” Serna said. “Reviews and testimonials are going to be the biggest help when it comes to deciding who will install your water heater. I would also say that warranty programs are important. If a plumbing company can offer you a long warranty on a water heater, then that means they stand behind their product and workmanship,” he added.
Ask your plumber about warranty options for your unit, and make sure you understand your model's maintenance requirements. While you may have to pay a few thousand dollars for water heater installation, it’s well worth it for your home.
Editorial note: The name “Homefront” refers to the alliance between USA TODAY and Home Solutions that publishes review, comparison, and informational articles designed to help USA TODAY readers make smarter purchasing and investment decisions about their home. Under the alliance, Homefront provides and publishes research and articles about home service and home improvement topics.
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