How Much Does It Cost to Install Point-of-Use Water Heaters?

By Geoffrey Sperring

April 24, 2025

Are you tired of waiting for the cold water to heat up when you want a shower and then finding the hot water runs out because you're the last to shower? If so, you may need a point-of-use water heater that cuts the waiting time and provides a continuous supply of hot water sufficient for everyone in the household.

This May Also Interest You: Is a Tankless Water Heater Worth the Cost?

Tankless instant water heaters have a compact design that's easy to install in a bathroom or kitchen. They provide immediate hot water whenever needed. Read on to learn what it costs to install a point-of-use water heater in your home.

What Is a Point-of-Use Water Heater?

A tankless POU water heater is a compact water heater that provides instant hot water. Unlike traditional tank water heaters, it doesn't have a storage tank and instead uses powerful gas or electric heating elements to heat water as you use it. Known as a point-of-service water heater, these mini water heaters are ideal for situations where you require a constant supply of hot water. You can use them as a central water heater or install them in places where the hot water supply is inadequate. Another type of POU heater uses a small tank. These are only suitable for occasional hot water use because of their limited hot water capacity.

How Much Does an On-Demand Water Heater Cost?

The cost of a tankless heater depends on its capacity in gallons per minute and its fuel. The two main types of point-of-use water heaters are electric and gas-powered.

Electric Point-of-Use Tankless Water Heater Costs

Electric water heaters have one or more powerful electric elements to heat water very quickly. These units are compact and easily installed in a convenient closet or under a counter. The cost of point-of-use electric water heaters ranges from $350 (CAD 475) for a 1.6 gallons per minute (GPM) unit suitable for one shower up to $1,360 (CAD 1,845) for a 5 GPM unit for whole-home use — according to product listings on Lowes.com.

Gas Tankless Water Heater Costs

Gas point-of-use water heaters can produce more hot water than electric tankless heaters. Smaller tankless water heaters with a capacity of 3 GPM typically cost $400 (CAD 543), while large tankless heaters able to supply 10 GPM cost up to $2,000 (CAD 2,714). The cost difference between propane and natural gas heaters is small. In the United States, high-efficiency gas heaters may be eligible for a Federal tax credit worth up to $600.

What Is the Labor Cost to Install a New POU Water Heater?

According to data from HomeGuide, the price for a plumber to install a tankless heater varies from $600 to $2,500 (CAD 814 to CAD 3,392), depending on the amount of labor required. Additionally, the cost to install a point-of-use water heater usually includes an electrical or gas connection.

Additional Costs for Electric POU Water Heaters

You need to include the labor cost to install a new electrical circuit to the heater. These costs range from $250 to $900 (CAD 339 to CAD 1,221).

Additional Labor Costs for Gas POU Water Heaters

A gas POU heater often needs a larger diameter gas supply line at a cost of between $350 and $750 (CAD 475 and CAD 1,018). You'll also need to install an exhaust vent, which can cost between $100 and $600 (CAD 136 and CAD 814).

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Point-Of-Use Water Heater Total Installation Costs

The total cost of installing an electric POU water heater varies between $1,400 and $4,960 (CAD 1,900 and CAD 6,730). This includes an allowance for the installation of an electrical supply and $200 (CAD 262) for permits.

The total cost of installing a gas POU water heater is from $1,650 to $6,050 (CAD 2,239 to CAD 8,209), depending on its size. This estimate assumes you require an upgraded gas line and allows for the installation of a vent.

Are Point-of-Use Water Heaters Worth It?

POU water heaters are energy-efficient as they only heat water as needed. Apart from energy savings, they offer advantages over traditional tank water heaters because hot water is instantly available. Additionally, a cabinet water heater can provide continuous hot water so you'll never run out of hot water.

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