range of tankless water heaters

How Much Does Water Heater Installation Cost?

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Determining water heater installation cost requires considering a variety of factors. While the average cost for water heater installation ranges between $1,600 and $2,400, appliance options at both ends of the spectrum offer cheaper and more expensive options, with fewer or more features, respectively. 

With that in mind, let's explore what factors go into both water heater cost and installation so you have a better idea of what to expect when you need a new unit.

Factors to Consider

The biggest factor in hot water heater installation cost is the type of unit you choose. The fuel it uses plays a big role in the cost to install a water heater, as does the type of unit you select. 

Bigger tank sizes come with bigger price tags, and commercial options typically cost more than residential ones when you're wondering, "How much does it cost to install a water heater?" 

Fuel Type

The energy requirements of an appliance naturally affect water heater installation costs — both at the outset and in the long term. Choosing a fuel type that's economical also means understanding which energy sources are more readily available in your area and picking appliances that operate easily on readily available fuels.


Because electric appliances are generally cheaper, it's only natural that electric water heater installation cost is usually lower upfront than other fuel types. The downside to an economical purchase price, however, is increased operational costs in areas where electricity is priced higher. 

Expect to pay $920 to $1,177 for electric water heater installation costs.


Both types of gas water heater installation types have similar upfront costs, with propane models priced a little higher than their natural gas counterparts. Let's take a look at the costs associated with installing gas water heaters

On average, gas water heater installation costs around $2,607.

Natural Gas

Natural gas has several advantages over propane, including a cheaper upfront price point in most cases. In areas where natural gas is readily available, this type of water heater also offers lower operating costs. Whether you can install natural gas water heaters depends on the availability of lines in your area, with the cost of running them to your home adding to your price tag.


Propane water heaters usually cost a bit more than natural gas options, and operating costs run higher, especially in areas where propane is in higher demand during the winter. Because propane doesn't come through lines and is stored in tanks that connect to your property, these water heaters are a viable choice in rural or remote areas with no natural gas lines or unreliable electricity. Costs of installing a propane storage tank, however, drive up costs for propane water heaters.


Solar water heaters almost always cost more upfront than gas or electric models because you also require solar infrastructure to power them. 

Expect to pay roughly $2,000 to $3,000 on average, with high-end models costing upwards of $7,500. 

On the flipside of higher prices at the outset, solar water heaters typically save you money on energy costs after the initial sticker shock of water heater cost and installation. 

Many areas offer rebates or tax credits for installing energy-efficient appliances, so you may be able to recoup some of your water heater installation cost that way.

Water Heater Type

With energy efficiency mattering more and more in terms of reaching sustainability goals, the water heater type you select affects how much energy it uses, which affects future costs. 

Likewise, advanced features and technology that help you control your energy consumption from your computer and smartphone may influence the decisions you make about where to buy a water heater

While the average cost of water heater installation depends on the type you choose for your home, some types may cost more upfront but end up costing you less to operate. With that in mind, consider the following water heater installation types and options when deciding on what works best for your space.

Electric water heaters, tank and tankless


Conventional tank water heaters typically cost less than other types, but they're not as energy-efficient as other types, which can affect your overall cost. One benefit of these water heaters is their simplicity and ease of repair, making models with a tank the most economical upfront choice. Installation for these units runs between $1,000 and $2,500.


Tankless water heaters come in two types: condensing and non-condensing. The main difference is how each one handles and uses the combustible gasses they generate during heating. 

When it comes to tankless water heater install cost, condensing water heaters usually cost more but are more energy-efficient to operate. These units typically cost between $960 and $3,910.

tankless high efficiency


Condensing water heaters cost more at the outset but save you money on the back end with lower energy costs thanks to a secondary heat exchanger that maximizes the use of combustible gasses. You may, however, incur charges in addition to the tankless water heater install cost with these units. This is because condensing water heaters require special venting and, thus, extra labor during the installation process. In general, these water heaters work best when powered by a gas energy source to maximize efficiency. Instead of the vent being a stainless steel application, the use of PVC is applied to the installation. 


Non-condensing water heaters have a lower upfront price and a higher cost for operation than condensing water heaters because they don't use combustible gas as efficiently. Standard venting is all that's required for these units, however, saving money on installation costs. 

electric heat pump

Heat Pump

Heat pump water heaters typically run more than tankless water heater installation cost options, but they usually offer long-term savings thanks to their energy-efficient design. The complexity of installation, however, may influence upfront costs.


Hybrid water heaters combine elements of conventional tank water heaters and their heat pump counterparts for improved efficiency. The labor cost to install water heater options like these may run more than usual due to extra essential components. The units usually run between $1,250 to $3,600.

Direct Vent

Direct vent water heaters cost more upfront than all but power vent water heaters, and this cost is further driven up by the need for special venting. The units themselves may be higher or lower than other water heater types, depending on whether the unit uses gas or electric as a power source. Adding this type of ventilation can add $500 to $1,500 to your water heater installation cost.

Tank Size

handling equipment

Tank size plays a big part in determining the cost of the water heater you select. Naturally, tanks that heat more gallons of water typically have a higher price point, so the larger the tank size, the more you can expect to pay. 

For example, the average 40-gallon water heater installation cost runs between $1,000 and $2,500, while its 80-gallon counterpart runs between $2,650 and $3,910.


turning the cold water off

How you intend to use the water heater also determines the type you purchase. No matter the power source or type, the average cost of water heater installation for commercial units runs more than residential options. This is because, barring all the standard features, commercial units are designed to accommodate a higher demand, so they're typically a lot more complex than even top-of-the-line residential water heaters. 


Size, type and power source all influence the installation costs of residential water heaters, and this water heater selector tool helps you choose the best option for home use. 

Tankless options usually cost more than water heaters with tanks, and units rated for improved energy efficiency typically have higher upfront costs for purchase and installation. 

Adding extended or comprehensive warranties can also add more to your price point, as can choosing advanced technology and features, such as smartphone connectivity. 

Your cost for residential water heater installation also typically varies based on location, with most units and installation costs ranging between $960 and $3,910 across the United States.

turning the cold water off


Costs for commercial water heater installation depend on the unit you select. Most units plus installation cost between $2,500 and $4,500 for business owners. 

Keep in mind, however, that you get what you pay for when it comes to commercial water heaters. Models by highly established brands, such as A. O. Smith, are usually worth the initial upfront costs due to their enduring reputation for durability and ease of use. 

These units typically cost more due to advanced features, functionality and premium construction from high-quality materials.

Other Costs to Consider

Beyond the initial purchase price for your water heater, other costs come into play that you might not think about until you're staring at an invoice with sticker shock. Before you make a decision about the type, size and power source for your water heater upgrade, consider these additional costs you're apt to incur during the installation process.

Hourly Labor

Labor costs to install a water heater in your local area and the complexity of your installation influence the final price. For example, less common high-efficiency units may require more time and special tools or skills, so they almost always cost more to install than standard