Here's how much it will cost to replace a Water Heater

by Team HomeServe |

Is installing a Water Heater expensive?

Have you ever stepped into a shower and had the sudden shock of realizing there’s no hot water and that your water heater is broken? Like many things around the home, there is a huge amount of variation in hot water heater installation costs. Things like the type of water heater, the size of the heater, and the sort of power used for the heater will affect installation costs.


We use hot water for all sorts of everyday tasks, so the hot water heater is one of the most essential household appliances. When it's time to replace it, you will need to spend some money to get a new heater. The following guide will go over all the details of pricing so that you can be fully prepared for hot water heater installation costs. By carefully considering up-front costs, maintenance costs, and costs to operate, you can find the most affordable and high-quality options that fit your budget.

What you can expect to pay in Water Heater installation costs

Every hot water installation is different, but learning the average costs will give you a decent idea of how much you have to pay. The average cost for a water heater will be somewhere between $1,000 and $3,000. Depending on where you live and what type of water heater you purchase, some installations can run as low as $400 or as high as $2,510. There's a huge amount of variation in average costs because there are so many different types of water heaters.

Why does installing a Hot Water Heater cost so much?

Replacing your hot water heater is a little pricier than some other appliances because installation involves several different elements. Keep in mind that most states require a licensed plumber to install the heater, so you cannot perform a do-it-yourself installation. The total price for your installation may include:

  • The cost of the unit
  • Materials for installation
  • Labor from a licensed plumber
  • Permits for installation
  • Removal of your old unit (optional)

Though not technically a part of installation, you may also want to consider the costs of running the tank. Certain types of systems and types of power may result in lower energy bills throughout your years of using the water heater.

Cost depends on the type of Heater

One of the biggest factors that affects water heater pricing is simply the type of tank you purchase. Water heaters come in a few basic designs, and each water heater system has its own advantages.

1. Tank Water Heaters

A tank water heater is the traditional style where you have a big tank that heats up water, stores the hot water, and dispenses it throughout your home. This is one of the most common and most affordable types of hot water heaters. The cost of a basic tank water heater is roughly $300 to $600, depending on where you live. If you need an affordable installation, you may want to choose this style. It lets you save on replacement costs, so you don't have to pay a lot when your tank breaks down unexpectedly.

2. Tankless Water Heaters

Tankless water heaters are a newer design that heat water on demand instead of heating it in advance. Instead of a big storage tank, it is just a small device that heats your water instantaneously when you turn on the tap. This ensures you do not waste energy heating water that is just going to sit around unused. Before installation, they can cost $1,600, which is significantly higher than tank heaters. However, these tanks are more efficient than general hot water heaters, so they can help to save you money on utility bills.

3. Hybrid Water Heater

A hybrid water heater, also called a heat pump water heater, is an even newer and less common type of water heater. This type of heater transfers heat from surrounding air into the heater to warm your water. It may also have a small auxiliary heater to jump-start water heating. These units tend to run a bit higher in price. You can end up paying anywhere from $1,100 to $3,000 on average.

How much will size affect Water Heater replacement cost?

One of the other major elements in hot water heater prices is the size of the unit you select. For most water heaters, size is measured in gallons. The size you get will affect how many people can comfortably use hot water in your home. If you get an improperly sized unit, you may find yourself running out of hot water or paying unnecessarily high utility bills. Generally, the larger the tank, the more the heater will cost. Here's what you can expect with some of the most common sizes.

  • 30 gallon: These smaller tanks will do well for small households with two to three people. Expect to pay anywhere from $300 to $900, dependent on where you live.
  • 40 gallon: You may want this size if you have three to four people in your house. These generally cost about $350 to $1,500, dependent on where you live.
  • 50 gallon: Fifty-gallon tanks are recommended for homes of four to five people. You'll pay between $400 to $2,300 for this size, depending on where you live.
  • 75 gallon: These supersized tanks are for houses with more than five people. The site recommends adding 10 gallons for each additional person. They can be anywhere from $800 to $3,000, depending on where you live.

These costs also hold fairly true for tankless water heaters. Though they do not technically store gallons of water at a time, their capacity is still measured in the gallons of water they can supply on demand. If you are looking at tankless heaters, expect to pay on the higher end of the range for each gallon size.

Price for installing a Water Heater with different types of power

The type of power used to run your hot water heater also has a huge influence on costs. The majority of hot water heaters run on electric and gas, so you can find the most pricing information about these models. Gas water heaters are typically the most expensive type of heater, but their overall energy costs will be lower. However, there are also some newer types with some interesting methods of alternative power. Here's a breakdown of costs for each sort of hot water heater power.

1. Electric Water Heater

An electric tank water heater usually costs around $750. Electric tankless heaters will cost a little more, at around $1,660. The cost to run this sort of heater for a year will vary based on local power rates. On average, it costs somewhere between $200 and $450 to pay for energy for this heater type.

2. Gas Water Heater

Gas water heaters have a higher up-front cost, with the price of a gas tank water heater averaging around $850 and the cost of a gas tankless water heater ranging around $1,600. The yearly energy cost for this sort of heater is lower, though, so when you calculate the cost over the lifespan of the hot water heater, it is usually cheaper. It usually costs about $220 to $350 to run a gas water heater for a year.

3. Solar Water Heaters

A solar water heater uses the power of the sun to warm water. These water heaters start at around $1,000, and you save money on your utility bills each month. Most are not strictly solar, however. They typically have an auxiliary electric or gas heater, so you aren't stuck with cold water on a cloudy day. Something else to consider when calculating solar water heater cost is income tax credits. You may save about $60 a year on your income tax thanks to energy-efficient government incentives.

Which brands cost the most for installing a Water Heater?

Different brands sell their heaters for different prices, but some brands may build stronger heaters than others. When it comes to picking brands, you'll probably want to find something that balances affordability, reliability, and durability. Consumer Reports gives high rankings to A.O. Smith, Rheem, Whirlpool, GE, and Kenmore. According to their tests, these brands build reliable, high-quality water heaters.

Rheem tends to be a brand that lets you save money, with tank water heaters retailing for around $400 to $2,300. A.O. Smith heaters are about the same, but they can cost up to $3,500. Those in the market for a cheaper tankless water heater might appreciate Noritz, a brand that retails tankless heaters for as low as $515. On the other end of the spectrum is Rinnai, a brand where most tankless heaters cost anywhere from $900 to $1,995. There are plenty of affordable options for both tank and tankless water heaters from a number of different brands, so you can find the one that fits your needs best.

Are energy-efficient models worth it?

When trying to calculate hot water heater prices, many people wonder whether or not they should bother thinking about energy efficiency. Most energy-efficient models will be a little pricier than standard models. However, they claim to save money on heating water each month. To decide if an energy-efficient model is worth it, you need to look at its annual expenses to operate compared to the operating costs for cheaper, non-energy-efficient models.

Multiply this annual savings by the lifespan of the water heater to see if it will be cheaper to get an energy-efficient model in the long run.

Generally, whether or not this type of water heater is cheaper will depend on factors like your local energy rates and the level of energy efficiency. According to ENERGY STAR, a high-efficiency tank water heater will save you somewhere between 10 to 20% on energy costs. A high-efficiency tankless water heater will provide even bigger savings of 45 to 60%. This can add up to $1,800 of savings over the lifetime of the tank, making energy-efficient models cheaper overall.

Prices for Water Heater installation

As you can see, the biggest price for a hot water heater is simply the unit itself. However, when calculating overall costs, you also need to remember the price of installation. Installation costs for a water heater replacement will include the price for materials like pipe fittings, the price of permits, and the price of labor.

For materials such as pipe fittings, valves, and connectors, you will usually need to pay an extra $8 to $10 per foot. Permit fees vary a lot. Some regions do not require a permit at all while others may charge a fee of up to a few hundred dollars to get a permit for the installation. When calculating labor costs, some plumbers may charge per hour while others may provide a flat rate for water heater installations. Expect to pay about $45 to $150 per hour while a plumber installs your heater. When you call the professionals to install your tank, expect it to take about one to three hours to install.

Other factors that affect overall Water Heater replacement cost

When calculating prices for your new hot water heater, remember that our guide is just nationwide averages. There can be a huge amount of variation based on where you live. Plumbers in California will most likely be charging more than a plumber in Oklahoma. You can check cost-of-living records for your area to see whether you are likely to pay more or less than national averages.

An important thing to keep in mind with any hot water heater installation is the current state of your plumbing. Anything that increases the hours to install the tank may increase prices for labor and materials. The simplest installations are ones where all the relevant pipes and connections are in place. If you want to install a heater in a new place, the plumber may have to spend additional time dealing with the hookups.

Things may also be a little pricier if you want to convert your system from electric to gas or from tank to tankless. These extra prices will be the cost of rewiring your home or adding a gas line to your house. If you need to run a gas line to your home to install a gas water heater, expect to pay an extra $210 to $620.

How long before you need to replace your Heater again?

When calculating hot water heater total costs, it's helpful to take into account the average lifespan for the product. The typical hot water heater tank will last about eight to 12 years. Meanwhile, the average tankless water heater will last around 15 years to 18 years. Because tankless water heaters do not corrode as much, they last far longer. If you're able to pay the higher price up front, you may find that the annual price of the tank ends up being lower due to its longer life span.

Potential signs your hot water heater is going out include:

  • Banging or rumbling noises from the tank
  • Hot water that looks red or yellow
  • Unusually high energy bills
  • A sudden decline in hot water temperature
  • Leaking around the tank

Performing regular maintenance, like flushing your hot water tank and replacing your sacrificial anode rod, will help your tank last as long as possible. If you notice any problems, call for water heater repair promptly before the damage gets worse. With a little regular care of your tank, you can avoid having to pay hot water heater replacement costs too often.

Protect your Hot Water Heater with a Plan from Homeserve

No matter how functional your hot water heater is, repairs and maintenance are an inevitable part of owning this appliance. Be ready before issues arise with a heating plan from HomeServe. Once enrolled, we can help you manage water heater repairs quickly and affordably. Whenever a covered issue pops up, all you need to do is give our 24/7 repair hotline a call. We’ll send a local, expert plumbing contractor who can help to get your hot water heater working as soon as possible. See what plans are available in your area.