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Because water heaters are necessary for our day-to-day activities because they provide hot water for things like taking a shower, doing the dishes, and doing the laundry, it is crucial to be aware of the associated costs. The cost of installing a water heater can range anywhere from $900 to $3,000, with $1,400 being the average cost across the country.

This piece will look into the elements that determine these prices, investigate the many types of water heaters, and present helpful recommendations for saving money.

Table of Contents:

A Breakdown of the Costs

When calculating the cost of installing a new water heater or replacing an existing one, the price of labor per hour, the cost of the parts and materials, and the size of the unit are all important considerations. Let’s investigate the primary factors that go into determining the final price tag.

Price by The Hour

There are some plumbers who will bill you by the hour, but the majority of them will give you a flat rate that includes both the labor and the materials. It will cost between $50 and $200 per hour to hire a plumber in the local area. If you require further work to be done with electricity, the cost of hiring an electrician will range from $50 to $150 per hour.

Components and Materials

To ensure that the installation of the water heater goes smoothly and effectively, a variety of items are required. These materials consist of water and gas piping in addition to venting pipes and connectors, discharge pipes, fittings, pipe thread compound, pressure release valves, solder, and venting pipes and fittings. Keep in mind that installations that are more complicated may call for the use of additional materials, which can have an effect on the total cost of replacing the water heater.

Size of the Unit

The number of people living in your home can affect the capacity of your water heater, which in turn might have an effect on how much it will cost to replace your water heater. Tank-style water heaters come in a variety of sizes, ranging from 20 to over 100 gallons of storage space, with a 40-gallon tank being the most typical for a family with two people. A larger tank, such as one that holds 60 or 80 gallons of water, may be necessary for households that have more than five people.

In Summary: The price of labor per hour, the cost of components and materials, and the size of the unit are all relevant variables when evaluating the cost of installing a new water heater or replacing an existing one.

How Much Does It Cost to Install a Water Heater?

There are many varieties of water heaters available on the market today, and the price of installation might change significantly depending on the model that you decide to purchase. You’ll find a breakdown of the many kinds of water heaters, along with an estimate of how much each one typically costs, so that you can make the most informed choice possible for your house.


The most common type of water heater is the tank variety, which works by holding water and keeping it at a consistent temperature all the time. Putting in a storage-tank water heater is frequently less difficult and time-consuming than installing a tankless water heater, which translates to an overall lower cost for the homeowner. The price of a storage-tank water heater can range anywhere from $600 to $800, however, this number is highly dependent on the tank’s capacity. The installation of a water heater in the tank style will run you an average of $900 to $2,500 dollars.


Tankless water heaters heat water just when it is needed, doing away with the requirement for a separate storage tank. These units are often more energy-efficient; nevertheless, additional installation considerations may be necessary in some cases. Tankless water heaters can have a price tag that falls anywhere between $600 and $1,500. The installation of a tankless water heater might run between $1,000 and $3,500 in price.


To heat the water, gas water heaters may use natural gas or propane as their fuel source. It is possible for the installation of a gas water heater to cost anywhere from $500 to $2,500 in total. The cost of installation is determined by the size of the tank as well as any additional labor that is required. But keep in mind that despite the fact that gas versions have lower operating costs, you cannot use them unless you already have a natural gas line installed in your home.


Electric water heaters are those that heat the water by employing the utilization of electricity. The installation begins at the same starting point in cost as gas water heaters, which is $500. On the other hand, they can be more pricey, with high-end electric models having a potential cost of up to $3,500. It is important to keep in mind that the monthly prices of gas and electric heaters are not the same; generally speaking, electric versions are more expensive than their gas counterparts.

Direct Vent

Direct vent water heaters draw combustion air from the outdoors and vent exhaust gases directly away from the interior of your home. The cost of installing a vent pipe when moving from a tank-style water heater powered by electricity with direct vent to one powered by gas with direct vent is typically between $500 and $1,000.

Power Vent

To assist in the process of venting combustion gasses away from the device, power-vent water heaters make use of a fan or blower. In circumstances when a conventional chimney or natural draft venting cannot be utilized due to a lack of space or other logistical considerations, power-vented water heaters are an excellent alternative. The cost of installing a power vent water heater may change depending on the configuration of the venting system and the additional electrical requirements. For the installation of the vent pipe, you can anticipate spending between $500 and $1,000.

In Summary: There are many different types of water heaters on the market today, and the cost of installation can vary greatly depending on the model you choose. You’ll discover a breakdown of the many types of water heaters, as well as an estimate of how much each one normally costs, so you can make the best decision for your home.

Other Costs Associated With Installing a New Water Heater

When installing or replacing a water heater, other costs to consider may come into play in addition to those for labor, parts, and the type of water heater unit itself. These costs are as follows:

Permits and inspections are required.

When installing a new water heater or replacing an existing one, it is imperative to acquire the necessary permits and go through the inspection processes. Permits may be required by the local building codes to guarantee that the installation complies with both safety and environmental norms. At the very least, you will need a permit in order to make modifications to the plumbing and electricity in your home, as well as to install gas appliances. There is a wide range of prices for permits, from $100 to $1,500.

Installation of Water and Gas Piping

To ensure that the water heater is used in a manner that is both safe and effective, it is necessary to correctly connect it to the existing plumbing and gas supply. Adding to the overall expense of installation is the possibility that your home’s water and gas lines will need to be modified or extended in order to make room for the new water heater. To guarantee that the water and gas line installations are carried out in a secure manner that is in accordance with all applicable building rules and regulations, it is essential to retain the services of a skilled professional.

Water Heater Location

It is possible that the installation of the water heater will be more difficult and expensive if it is done in a location that is difficult to access, such as a corner of the attic or the basement. Take into account how easily the chosen area can be reached, and if there are any potential obstacles, discuss them with the installation professional so that you can prepare for any additional costs.

In Summary: When installing or upgrading a water heater, additional costs to consider may come into play in addition to those for labor, parts, and the type of water heater unit itself. These prices may include natural gas, electricity, and propane.

Warning Signs That It’s Time to Replace Your Water Heater

If you are aware of the symptoms that point to the need for a replacement water heater, you can avoid unanticipated breakdowns and unexpectedly high repair bills. Keep an eye out for the following signs:

  • Insufficient availability of hot water
  • A stained or rusty body of water
  • Strange or disturbingly loud sounds
  • Leaks or pooling water surrounding the unit led to an increase in the amount of money spent on energy
  • The age of the water heater, which should be over 10 to 20 years old on average

How to Cut Costs When Purchasing and Installing a New Water Heater

Although the installation of a new water heater or the replacement of an existing one might be a considerable financial expenditure, there are ways to save money:

  • If your current water heater isn’t too old, you should consider having it repaired rather than replacing it with a whole new model.
  • Take advantage of any rebates or incentives that are currently available for purchasing energy-efficient water heaters.
  • Because of the higher cost of larger units, you might want to think about acquiring one that is just a little bit smaller if it can fulfill all of your requirements.
  • Make sure you insulate not only your water heater but also the pipes that are connected to it in order to improve energy efficiency and decrease the amount of heat that is lost.

Doing it Yourself or Hiring a Pro

If you need a Water Heater Replacement, we strongly advise that you get it done by an expert. It is possible to save money on labor costs by performing the installation oneself; however, this takes technical skill and could render the guarantee useless. Hiring a professional not only assures the installation is done correctly but also lowers the likelihood of making mistakes or creating safety issues, and it typically comes with some sort of warranty protection for the work that is carried out.

In Summary: You can avoid unannounced breakdowns and surprisingly expensive repair fees if you are aware of the indicators that indicate the need for a replacement water heater. Although the installation of a new water heater or the replacement of an existing one can be costly, there are ways to save money. If you need your water heater installed or repaired, we strongly encourage you to use a professional.

Frequentky Asked Questions

Why is the installation of a water heater such a costly endeavor?

Because water and electrical connections need to be made during the installation of a water heater, the process is time-consuming and expensive. The difficulty of guaranteeing a safe and efficient setup contributes to an increase in the overall cost of installing a water heater because of the complexity of the process. Additionally, the installation of certain heaters may necessitate the purchase of a permit.

How much does it typically cost to hire a plumber to install an electric water heater?

When upgrading from a tank-style water heater to a tankless unit, the installation labor expenses can reach up to $2,500. This is significantly higher than the average $150 to $500 range for labor costs associated with installing a standard replacement water heater.

How long does it take to set up a water heater that is 40 gallons in capacity?

An experienced technician would normally need between two and three hours to complete the installation of a hot water heater that holds 40 gallons.

Is a water heater with 40 gallons of capacity sufficient for a house that has three bedrooms?

Whether or whether a 40-gallon water heater is appropriate for a home relies on a variety of criteria, including the number of people living there, their habits regarding water consumption, and their way of life. In many instances, a unit with a capacity of forty gallons should be adequate for a home with three bedrooms.

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