How Much Does It Cost to Install a Water Heater?


The average cost to install a conventional tank-type water heater falls between $800 and $1600. This includes the water heater unit and typical labor for a standard installation. Any additional electrical or plumbing (water or gas) work will add to the total cost. A new tankless style water heater can cost considerably more, between $1,000 and $3,000 for the unit and installation. 

The specific costs for installing a water heater in your home will depend on your location, the type and model water heater, whether it is electric or gas and any other work that is required. This guide will provide some basic information to consider when pricing your next water heater installation, including solar, tankless, hybrid and high-efficiency models. 

Types of Water Heaters 

The two main types of water heaters are those with a tank and tankless. Tank, or conventional, water heaters can heat water by electricity or gas, and they are designed to store hot water in a large tank, ready for instant use. The average water heater tank holds between 30 and 80 gallons. Over 90% of hot water heaters installed in the U.S. are tank-style, or conventional. 

Tankless water heaters are more expensive to install and require a different type of installation. Also called “on-demand” water heaters, they heat water as it passes through a series of superheated coils and can deliver an endless supply of hot water. 

Under these main two categories are some different types of water heaters. These are designed to be more energy-efficient. Depending on your location and level of usage, these can be worth consideration, since water heaters are usually the second-highest in energy consumption in most homes. 

Solar Water Heaters

The typical solar water heater installation costs between $1,800 and $5,000, depending on the particular installation and what is required. These systems use the sun to heat water for use. Many users install a solar water heater as a supplement or backup to a conventional water heater. While it can be an expensive installation, there are some savings in energy costs and possible tax credits. 

Hybrid Heat Pump Water Heaters

The average heat pump water heater costs anywhere from $1200 to $3,500 to install. Like a heat pump used for heating your home, the unit pulls warm air from the environment and uses it to heat water in the tank. The heating unit is usually large and requires quite a bit of clearance (up to 1,000 square feet) for efficient operation. While they are super-efficient, the space required makes them an unrealistic choice for small homes or apartments. 

Indirect Water Heaters

Indirect water heaters rely on another, nearby heat source, like a furnace or boiler that heats with oil, gas, electricity or solar. Their average cost for installation falls between $800 and $1,500. They are an extremely efficient option and their size makes them a good choice for almost any application. 

Additional Costs for Water Heater Installations 

There can be additional costs for a water heater installation. Typical cost estimates include the unit and a normal plumbing cost that requires no extra work. When additional work is required, this must be factored into your cost estimate. Here are some of the common additional costs for water heater installations. 

Plumbing or Electrical Work – These professionals typically charge by the hour and can range from $45 to $150 per hour, plus the needed materials. 

  • This can be necessary when converting from one fuel source to another, as from electric to gas. It can be necessary to add new or replace old wiring, replace or add water lines or add gas lines. 
  • There may also be a cost to add an expansion tank. 

Carpentry Work – Depending on your installation, you may need a professional carpenter to create a new space for the water heater and components, add a new wall to make an enclosure, add or move existing framing or support components or add drywall. 

  • Framing a small wall can cost $200 to $500, depending on materials and size. 
  • Installing and finishing drywall can be costly, from $1,000 t0 $3,000 or more. 
  • Any work that involves structural components can be expensive, and may involve an hourly rate between $50 - $80. 

Permits – Depending on your local jurisdiction, you may need a single permit, or both a plumbing and electrical permit. If other work is involved, you may need additional construction or renovation permits as well. Permits usually fall between $100-$1,500. 

Signs You Need a New Water Heater

It can be difficult to determine if you only need repairs or if it is time to replace your water heater. Some sure signs that a replacement water heater is needed include: 

  • Discolored or bad-tasting water – this is a sign of internal tank corrosion and there is no fix. Replace your water heater. 
  • A leak from the tank itself – this could be around the water connections or the heating elements. If the tank itself has corroded and began to leak, replace your water heater. 
  • Loud noises from your unit – this is a sign that corroded material and hardened minerals are popping loose from the heating elements inside your unit. It is likely filled with such hardened material. Replace your water heater. 
  • Your unit is 10-15 years old – at this age, your water heater has reached the end of its usable life, and if it is not having problems, they can happen at any time. Replace your water heater. 

Should I Hire a Professional to Replace My Water Heater? 

Modern families cannot do without a water heater. New systems are more energy efficient, saving you money and helping our environment. When installed properly, you can expect many years of satisfactory use from a new water heater. Due to what could be involved in your installation, including electrical, plumbing or gas modifications, it is recommended that you contract a professional to install your new water heater. The investment in a licensed, experienced professional now can save you much more in repairs and damages from an improper DIY installation. 

Contact your local plumbers for pricing and references and search online for reputable contractors that have numerous positive reviews. Installing a new water heater is an investment in the health and welfare of your family, so you want everything to be done safely and efficiently.

Share To: