How much does Water heater installation cost?

If your water heater is leaking or nearing the end of its lifespan, it’s time to install a new one. According to EnergyStar.gov, water heaters last an average of 13 years. You should consider replacing yours if it’s more than 10 years old. Otherwise, when your old water heater breaks down—which it will do eventually—you’ll be faced with an urgent and more costly project. 

This guide explains how much it typically costs to purchase different types of water heaters and have them professionally installed in your home. Pricing data is based on estimated project costs provided to Yelp users by plumbing businesses on Yelp, along with industry research. Learn more in the methodology section at the end of the guide.

The cost of water heater installation by a licensed plumber is typically $1,610 (not including the cost of the heater), according to Yelp data. However, that cost can range from $790–$2,070, depending on several factors: whether the plumber buys the water heater, the appliance’s size and type, difficulty of installation, and your location—all of which can increase total project cost to $5,000 or more. 

Professional plumbers typically charge $148 per hour to install a water heater, but hourly rates range from $85–230 across the US, according to Yelp data. They’ll usually provide free quotes for water heater installation based on the number of hours they think the job will take at their rate. You can also solicit bids from water heater specialists or home improvement centers—which can arrange for installation of the water heaters they sell.

Avoid surprises when asking about costs. Make sure the quote you receive includes:

A wide range of water heater types are available, including standard gas and electric tank heaters, tankless water heaters, and hybrid heat-pump water heaters. Typical installation costs range from $1,846 for a storage tank heater to $3,366 for a tankless water heater, according to Yelp data. That includes the appliance purchase, installation, and removal and disposal of the old water heater.

Traditional water heaters typically cost $1,846, including purchase and installation, with a nationwide range of $1,450–2,400, according to Yelp data. This common type stores hot water in a large cylindrical tank (which holds 20–80 gallons). When you turn on a hot water tap, hot water is drawn from the storage tank, and more cold water is drawn into the bottom of the tank to be heated.

Electric water heaters typically cost $1,993, including purchase and installation, but can range from $1,100–2,500 nationwide, according to Yelp data. Electric water heater installation requires a plumber for the water hookup and, for a new unit, an electrician to handle any new electrical wiring that may be needed. (If your current water heater is electric, the electrician shouldn’t be necessary.) Unlike gas-burning models, electric water heaters don’t require venting. That can eliminate the additional cost of an exhaust system if you don’t already have one. 

Gas models generally cost 10–20% more than conventional electric heaters. Including purchase and installation, they’re typically $2,105, with a national range of $1,500–2,550, according to Yelp data. Installing a gas water heater can reduce utility bills over time, because natural gas is a less expensive fuel source than electricity in most regions. 

Hybrid heat pump water heaters typically cost $2,620, including purchase and installation, with a national range of $913–4,000, according to Yelp data. These appliances gather heat from surrounding air and use it to heat the water in a storage tank. They’re more expensive than gas or electric storage water heaters, but about 3 times more efficient—so they reduce energy bills. They can save a household of 4 people about $550 per year on electric bills compared to a conventional electric water heater, according to Energy Star, a US government program. In addition, heat pump water heaters may qualify for federal, state, and local incentives (see “Money-saving tips” below). 

Tankless water heaters typically cost $3,366, including purchase and installation, but can range from $1,600–5,000 nationwide, according to Yelp data. Also called “on-demand water heaters,” tankless appliances don’t store heated water. When you draw hot water from a household fixture, the unit quickly switches on and rapidly heats the water traveling through it, using an electric element or gas burner. While tankless water heaters typically cost more to install than storage water heaters, they can be 24–34% more energy-efficient, so they may reduce your utility bills.

Here are some of the issues that can affect the cost of installing a new water heater in your home.

Larger storage tank water heaters will cost more than smaller ones, but the labor for installing them is usually about the same. A 50-gallon water tank is a popular choice, but sizes range from 20 gallons for a small household to 80 gallons for a large one.

Tankless water heaters have different flow rates, measured in gallons per minute (GPM). A higher flow rate is beneficial in a household that uses multiple showers or faucets at once, but it typically costs more. For example, a tankless water heater with a 5 GPM rating will be more affordable than a unit with a 9 GPM rating. The installation of a high-flow rate tankless water heater may require additional work, such as upgrading gas lines or electrical connections, which can also affect the installation cost.

Home size	Flow rate for a gas tankless water heater	Flow rate for an electric tankless water heater
Home with 2–3 bathrooms	4.5 GPM	3.5 GPM
Home with 4+ bathrooms	5.5 GPM	4.5 GPM

Energy efficiency, measured by a Uniform Energy Factor (UEF), affects water heater costs—the higher the energy efficiency, the higher the water heater’s price. Water heater UEF ranges are:

A 50-gallon, non-energy-efficient gas storage tank water heater with an 0.60 UEF will cost about $600 to buy. A similar-size high-efficiency water heater with a UEF of 0.90 will cost about $720 to buy. But while the high-efficiency unit costs more to purchase, it saves about $100 per year on energy bills, so you’ll recoup the cost difference in just 1.2 years.

The length of a water heater’s warranty usually factors into its price. Storage tank water heaters (including hybrid heat pump models) have warranties that typically range from 6–12 years. For tankless water heaters, warranties can be shorter, often around 5–10 years. Some manufacturers offer extended warranty options for an additional cost of $100–500, depending on the product and the warranty’s terms. The extent of coverage and type of repairs a warranty will cover vary widely for different brands and price points (for example, some only cover manufacturer defects). Be sure to read your warranty terms when purchasing a water heater.

If your water heater is in a difficult-to-access location, or if you need to have new plumbing installed—such as cold water supply lines, an expansion tank, shutoff valve, or a gas line—the cost of installation will be higher. Having new plumbing installed can easily cost an additional $500–2,500.

“If you’re going into a home with galvanized piping, the hot and cold water lines going into the water heater must be replaced with copper, and then you have to replace the shutoff valve,” says Patrick Finegan, owner of Drain-EEZ Plumbing in Chicago. “If the existing piping is copper, then you just do a simple swap-over.”

Similarly, if an electric water heater requires a new electrical circuit and circuit breaker, the installation cost will go up. 

Labor costs vary, depending on where you live. For example, it typically costs $1,500 for water heater installation in Chicago versus $1,825 in San Diego. Here’s what you can expect to pay for installation of a standard storage tank water heater in a few key American cities, according to Yelp data.

In some cases, you may need to obtain a permit from your local municipality to install a new water heater. An installer may obtain the permit, but you’re responsible for paying for it. “The plumber will either quote you the price of the permit or include it in their fees,” says Craig Korin of Craig Korin Construction & Plumbing in Van Nuys, California.

Here are a few things you can do to reduce your expenses when installing a new water heater.

If you install an EnergyStar-rated energy-efficient model, you could qualify for a tax credit that equals 30% of the project’s cost, up to $2,000 for a heat pump water heater or up to $600 for a high-efficiency natural gas or propane water heater. Learn more at Energy.gov and the Database of State Incentives for Renewables & Efficiency.

Ask for estimates from 2 or more qualified plumbers in your area to make sure you’re getting a fair price. Get a written contract that outlines the scope of work and the cost of the installation. Ask about any seasonal discounts or price reductions that may apply. Some plumbers also offer discounts for seniors, military members, and other groups.  

You might be able to save some money by buying a water heater at a discount from a home improvement center, appliance store, or online, and then hiring a plumber, electrician, contractor, or other water heater installer to put it in. (Keep in mind that some plumbers won’t work on a product they haven’t pre-approved for your home.) Many major home improvement centers will arrange installation for a purchased water heater through their contracted professionals. 

Though you could potentially save on labor costs with a DIY water heater replacement, installing this large appliance is a complex job that requires a range of skills and tools, and includes plumbing and, in some cases, electrical work. If you have the skills and are comfortable with DIY projects, it’s still important to be careful and follow the manufacturer’s instructions step by step. In the vast majority of cases, homeowners should hire a professional plumber or other water heater installation professional.

When interviewing a plumber for water heater installation, ask about their qualifications and customer-service practices. The following information is often available on the pro’s Yelp Business Page:

Questions about the business

Questions about installation costs

Water heater installation services usually cost $790–2,070, according to Yelp data, depending on the type of heater and difficulty of installation. If you purchase a water heater at a home improvement, they’ll often arrange for installation at a contracted price.

To purchase a new gas water heater with a 50-gallon tank, expect to pay $600–3,500. The specific price will depend on the water heater’s type, model, and specifications. You’ll typically pay about $2,105 to purchase a standard gas water heater and have it professionally installed, according to Yelp data.

Though you can save labor costs of $790–2,070 by installing a water heater yourself, unless you’re a highly experienced DIYer, you’re much better off leaving water heater installation to a pro. The job involves shutting off, draining, disconnecting, and disposing of the old water heater, and connecting the new water heater to plumbing, gas, or—for an electric water heater—an electrical circuit. In addition, if a water heater isn’t installed by a licensed plumber, the warranty may be voided.

Find a licensed plumber in your area.

Cost data in this guide is based on project quote estimates provided to Yelp users by licensed professionals and businesses on Yelp (as well as analysis of industry data). Actual project costs may vary depending on location or complexity of the project. Cost data has been reviewed by our industry expert, Don Vandervort, a nationally known home improvement author. Don is the founder of the website HomeTips.com and has written or produced more than 30 home improvement books.