How Much Does A New Tankless Water Heater Cost?

Last updated Mar. 7, 2025 by Charles Zemub

In the quest for efficiency and modernity, many homeowners consider upgrading their traditional tank water heaters to tankless models. Unlike traditional heaters that store a finite amount of hot water, tankless water heaters provide virtually unlimited hot water on demand. This efficiency, coupled with energy savings and space-saving designs, makes tankless water heaters an attractive option. However, one of the biggest questions potential buyers have is, "How much does a new tankless water heater cost?" This article will dive into the costs associated with purchasing and installing a new tankless water heater, while also exploring the factors influencing these prices.

Understanding Tankless Water Heaters

Before diving into the costs, it’s essential to understand what makes a tankless water heater desirable. Unlike their traditional counterparts, tankless water heaters don’t store water in a large tank. Instead, they use high-powered burners to heat water as it passes through the unit. This design means you only use energy to heat water when you need it, which can lead to significant energy savings over time.

Benefits of Tankless Water Heaters

• Energy Efficiency: As they operate only when needed, tankless water heaters are around 24-34% more energy-efficient than conventional water heaters for homes that use 41 gallons or less of hot water daily.
• Space Saving: These systems are compact and can be mounted on walls, freeing up valuable floor space.
• Longevity: With proper maintenance, tankless water heaters can last longer than traditional heaters, often over 20 years.
• Continuous Hot Water: You’ll never run out of hot water as long as the system’s flow rate isn’t exceeded.

Cost Factors for Tankless Water Heaters

Initial Purchase Cost

The initial purchase cost of a tankless water heater can vary significantly based on several factors, including the unit’s size, capacity, and brand. On average, you can expect to pay between $1,000 and $3,000 for a new tankless water heater. Here’s a breakdown:

• Electric Models: Typically, electric tankless water heaters are cheaper, ranging from $500 to $2,000. They are more suitable for smaller households or as point-of-use systems in less frequently used locations.
• Gas-Powered Models: These are generally more expensive due to their higher efficiency and capacity. Prices usually range from $1,000 to $3,000.

Installation Costs

Installation costs add significantly to the total expenditure of a tankless water heater. Proper installation is crucial, especially for gas models, to ensure safety and efficiency. Installation can cost between $800 and $3,500, depending on the complexity of the job. Here are some considerations:

• Retrofitting Home Systems: If your home isn’t pre-equipped, adding the required electrical upgrades or gas lines can increase the installation costs.
• Ventilation Requirements: Gas models require proper venting, which may necessitate additional modifications to your property.
• Plumbing Adjustments: Installation may require modifications to your home’s plumbing system to ensure optimal delivery of hot water.

Operational Costs

The operational costs of a tankless water heater are generally lower than traditional models, leading to long-term savings:

• Energy Expenses: Although electricity and natural gas costs vary, tankless systems use less energy, translating to reduced monthly bills.
• Maintenance: Routine maintenance can include descaling processes to prevent mineral buildup. Professional services may range from $70 to $150 per year, but regular maintenance can prolong the unit’s lifespan and maintain efficiency.

Additional Features and Considerations

• Technology Integration: High-end models may include features like Wi-Fi connectivity, allowing you to control and monitor your water heater remotely. These features can add to the initial cost.
• Environmental Rebates and Tax Credits: Some regions offer rebates or tax credits for energy-efficient upgrades, which can help offset the initial installation expenses.

Determining the Right Tankless Water Heater for You

Choosing the best tankless water heater involves assessing your household’s hot water demands, energy sources, and budget:

• Household Size: Larger households will need units with higher flow rates, often necessitating more expensive models.
• Existing Infrastructure: Evaluate your home’s current plumbing and heating setups to determine if significant upgrades are necessary.
• Long-term Savings: Consider potential long-term savings against the upfront costs to decide if this investment aligns with your financial goals.

FAQs Section

What is the lifespan of a tankless water heater?

Tankless water heaters can last over 20 years with regular maintenance, which is significantly longer than the typical 10-15 years for traditional water heaters.

How do tankless water heaters provide hot water instantly?

These systems heat water as it flows through the unit, using high-powered burners rather than storing pre-heated water, ensuring a continuous supply on demand.

Can I install a tankless water heater myself?

Professional installation is highly recommended, especially for gas models requiring proper venting and gas line additions. DIY installation could lead to safety risks and may void warranties.

Are there any downsides to tankless water heaters?

Initial costs can be higher, and for larger households requiring simultaneous hot water use, a single unit’s flow rate might be insufficient. Proper sizing and possibly multiple units can address these issues.

Do tankless water heaters work during a power outage?

Electric models will not work during power outages, while gas models may still function if they rely on a standing pilot light. It’s essential to check the specific model’s requirements.

By evaluating these considerations, homeowners can make informed decisions about investing in a tankless water heater that suits their home and lifestyle, balancing initial costs with long-term benefits.