How Much Is a Gas Tankless Water Heater?
Gas tankless water heaters give you hot water whenever you turn on the tap. You'll pay for the unit, installation by a plumber, and sometimes new gas lines or venting. These systems last 15-20 years and use less energy because they only heat water when you need it.
Article Summary
The total price includes the water heater itself plus installation. Installation typically requires professional help because homes often need gas line upgrades or new venting. Three types are available: non-condensing, condensing, and premium models with scale prevention.
Gas tankless water heaters need electricity for their controls and displays, even though they heat with gas—most plug into standard 120V outlets while some need 240V hardwiring. These units last up to 20 years and use less energy. They also qualify for federal tax credits up to $600.
Gas Tankless Water Heater Prices by Model Type
The price of your tankless water heater depends on which technology level you choose. Each type offers different features and efficiency ratings that affect both upfront cost and long-term savings.
Basic Non-Condensing Models: Cost Less Upfront
Non-condensing units work in the 80% - 85% efficiency range, with 82% being common. This means for every dollar spent on gas, 82 cents goes to heat your water. These tankless heaters tend to require metal pipes for venting because the exhaust stays very hot.
Condensing Models: Save More on Monthly Bills
Condensing models catch heat that would normally escape. They work at 95% efficiency. Only 5 cents of each gas dollar gets wasted. The exhaust cools down enough to use plastic PVC pipes. Your plumber can run PVC pipes up to 150 feet, giving you more options for where to place the heater.
Premium Models with X3® Technology: Stop Mineral Buildup
Premium models have X3® Scale Prevention Technology built in. Hard water has minerals that stick to heaters. Without X3®, you need a plumber every year to clean out the minerals.
Key features of premium models:
- X3® Cartridge: Stops minerals from sticking and never needs replacing.
- Built-In Pump: Gives you instant hot water at every faucet.
- WiFi Control: Change settings from your phone anywhere.
- Digital Display: Shows temperature and easy-to-read error codes.
- Triple Lifespan: Heat exchanger lasts three times longer than a tankless model without X3® Scale Prevention Technology.
- No Yearly Cleaning: Saves up to $200+ per year on descaling service.
Water Heater Selector Quiz
Need Help From A Pro?
A. O. Smith water heaters are professionally installed by local independent contractors.
Professional Installation Costs for Your Home
Getting your tankless water heater installed properly requires professional work and maybe some home upgrades. The total installation cost depends on your plumber's rates and what changes your house needs.
What Plumbers Charge: Basic Installation
You need a licensed plumber to install a gas tankless heater. The plumber connects water pipes, gas lines, exhaust venting, and electricity for the controls.
These are the installation steps your plumber handles:
- Wall Mounting: Secures the unit with proper brackets and support.
- Water Connections: Hooks up cold water in and hot water out at the bottom.
- Gas Line Hookup: Connects the gas supply on the side with leak testing.
- Venting Installation: Runs exhaust pipes from the top of the unit to outside.
- Electrical Wiring: Connects 120V or 240V power for controls.
- System Programming: Sets the temperature and tests all faucets.
- Final inspection: Checks for leaks and proper operation.
City installations can oftentimes cost more than rural ones.
For professional installation, find a certified plumber near you.
When You Need New Gas Lines: Additional Costs
Most tankless heaters need lots of gas to work—up to 199,000 BTUs. Your current gas line might be too small. If the pipe is too narrow, not enough gas flows through. The heater shows error messages or shuts off. You might need bigger pipes from your gas meter to the heater. Sometimes you need a new gas meter. Sometimes you need a new pressure regulator. Never try gas work yourself—always hire a professional. If your heater sits close to the gas meter, it costs less. Far away means more pipe and more money. Houses built before 2000 almost always need bigger gas lines.
Venting Through Walls and Roofs: Material and Labor Costs
Gas produces exhaust that has to be vented outside. Non-condensing units need steel venting because the exhaust stays hot. Condensing units let you use plastic pipes. You can use PVC, CPVC, or other plastics. These pipes can run 75 to 150 feet. If your heater sits on an outside wall, venting goes straight out. Easy and less expensive. If it's in a basement corner, pipes must go through floors and walls to reach outside. More work means more cost. In warm places where pipes won't freeze, you can install the heater outside with just a vent cap.
Rebates & Tax Credits
Rebate and incentive programs provide savings to consumers for the purchase of water heaters that meet certain energy efficiency standards.
Need Help From A Pro?
A. O. Smith water heaters are professionally installed by local independent contractors.
Monthly Operating Costs and Maintenance
After installation, your tankless water heater costs money to run and maintain each month. How much you spend depends on the model's efficiency and whether it needs regular cleaning.
How Much You Save: Gas Bill Reductions
Efficiency ratings show how much gas is used for heating water. Non-condensing units are 82% efficient. Condensing units are 95% efficient. Higher efficiency means lower gas bills. If your family uses 64 gallons of hot water daily, a 95% efficient unit saves many therms of gas each year. ENERGY STAR®-certified condensing models are eligible for a $600 tax credit. That's 30% of what you spend on the heater and installation, up to $600.
Yearly Maintenance: Descaling and Service Costs
Regular tankless heaters in hard water areas need yearly cleaning. This costs $200 or more each time. If you skip cleaning, minerals damage the heat exchanger.
Maintenance needs by model type:
- Standard Units: Need yearly descaling at $200+ per service.
- Hard Water Areas: May need cleaning twice per year.
- Units with X3®: Never need descaling service.
- Air Filter Check: Clean or replace every few months.
- Vent Inspection: Keep clear of leaves and debris.
- Error Code Monitoring: Watch the display for service alerts.
Your Home's Hot Water Needs Affect Price
The size and power of the tankless heater you need depend on how much hot water your family uses and where you live. Your house also affects the final installation cost.
Calculating Your Family's Hot Water Use: Size Requirements
You need to know how much hot water you use at once. Each shower uses about 2.5 gallons per minute. Add up everything that might run together—showers, dishwasher, washing machine, sinks. This tells you what size heater you need. The right size gives everyone hot water when they need it.
Cold Climate Homes: Need Bigger Units
Where you live matters. Cold places need stronger heaters. If your groundwater starts at 40°F, you need more power than in places where the water starts at 60°F. Check the manufacturer's charts for your area. Big houses sometimes need two heaters working together. Hotels and apartments can link up to 12 units with special controls.
Older Homes: Often Need More Work
Newer homes with good gas lines and easy venting spots cost less to install. Older homes often need more work. The distance from your gas meter also matters. Electric hookups are important, too. Most units plug into 120V outlets. Some use 240V hardwiring, which adds cost. Cities charge more for installation. Some states need extra permits. Other areas give rebates that lower your price.
Rebates & Tax Credits
Rebate and incentive programs provide savings to consumers for the purchase of water heaters that meet certain energy efficiency standards.
Need Help From A Pro?
A. O. Smith water heaters are professionally installed by local independent contractors.
Ready to Make the Switch?
Gas tankless water heaters may cost more upfront, but they pay for themselves through lower energy bills and decades of reliable service. A. O. Smith's ADAPT®™ line includes models with X3® Scale Prevention Technology that eliminates annual maintenance costs and extends the life of your unit up to three times longer.
Every A. O. Smith tankless water heater qualifies for federal tax credits and comes with a 15-year limited warranty on the heat exchanger. That's peace of mind that lasts. Use the water heater sizing tool to see which model saves you the most money for your home's hot water needs. Then find a local plumber to get an installation quote.
Frequently Asked Questions
Installation costs for a gas tankless water heater depend on your home's setup and any necessary upgrades like gas lines or venting. A licensed plumber handles all the connections—water lines, gas, venting, and electrical—and makes sure everything meets local codes so your warranty stays valid.
You can absolutely replace a 40-gallon water heater with a tankless model. Your plumber will evaluate your gas lines, venting, and electrical connections to determine what updates are needed, and they'll handle the installation to make sure everything works properly for your household's hot water needs.
ENERGY STAR® certified condensing tankless water heaters qualify for a federal tax credit of up to $600 (30% of equipment and installation costs). You'll use IRS Form 5695 when filing your taxes, and you'll need the manufacturer code to claim the credit.