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Tankless Water Heater Cost Savings: Cut Your Bills in Half

Discover how much cost you can save by tankless water heater

A tankless water heater gives you hot water when you need it. It doesn’t waste energy when you are not using it. It is like having a magic tap that gives you hot water instantly.

The tankless water heater cost in the US usually ranges between $1300 and $4000, including installation and labor costs. However, it may vary depending on brands, types, and flow rates.

This guide will explain the tankless water heater installation cost and the factors affecting them. Moreover, we will also guide you through the traditional and condensing tankless water heaters and comparison to the tankless water heater system.

Types of tankless water heaters

inarticle image-tankless water heater cost-Types of tankless water heaters

The types of tankless water heaters are usually determined based on the type of fuel system they use. Some of them are:

  1. Tankless gas water heaters: These are natural gas tankless water heaters. They heat water using natural gas and are better than electric ones. You need to connect the gas line to their separate gas units.
  2. Propane tankless water heaters: The propane tankless water heater uses propane gas for hot water demand. If a tankless system is built to work with natural gas, it should also use a connector with propane.
  3. Electric tankless water heaters: These electric water heaters are powered by electricity, so they do not use any fuel.
  4. Solar tankless heaters: These systems use solar energy to heat the water, making them an eco-friendly and energy-efficient option.

Average cost of a tankless water heater

inarticle image-tankless water heater cost-Average cost of a Tankless water heater

The final cost depends on the brand, size, system performance, and labor costs. 

A tankless water heating system typically costs between $500 and $1200. Installing it can cost an additional $800 to $1500. 

It’s important to consider all these factors when choosing a tankless water heating system that fits your needs and budget.

Additional costs and considerations

If you’re considering a tankless water heater, remember that some extra costs may be involved. The costs can depend on factors like the size and location of the unit and how complicated the installation is.

But it’s also important to remember that a tankless water heater can save you money in the long run. Your energy bills will be lower, and the heater will last longer than a traditional water heater.

Check out the table below for an idea of what the extra costs might be for installing a tankless water heater: 

Factors Average cost 
Whole-house or Single-point installation cost $100 to $300(Single-point) – $450 to $1,500 (Whole-house) 
Permit cost $50 to $500 
Brand cost $150 to $3000 (Depending upon the brand you choose)  
Type cost $500 to $4000(depending upon the fuel system you choose) 

It’s a good idea to weigh the upfront costs of a tankless water heater against the long-term benefits and maintenance costs. This way, you can make an intelligent choice for your home.

You can also talk to a professional plumber for more specific information about your situation’s costs and considerations.

Factors that affect the cost of a tankless Water Heater

Various factors influence the price of a tankless water heater system. 

Here are a few examples:

  • Type of fuel system: Fuel used to heat the water is one of the most important factors in determining the tankless water heater cost.
  • Flow rate and capacity: The flow rate is how much hot water your system can provide at one time. The flow rate of the tankless water system is usually measured in gallons per minute (gpm). You should also consider the size tankless water heater.
  • Building permits: Most towns and cities require permits for certain types of home improvements, including tankless water heaters. Depending on where you live, these additional costs can add to the overall installation cost.
  • Heater brands used: The brand used for the tankless water heater can have a significant effect on the cost. Generally, higher-end brands offer more advanced features and better energy efficiency. But they also tend to be more expensive.
  • Location: Placing the tankless water heater in an inaccessible area will cost more for installation and labor.
  • Maintenance cost: When you get a tankless water heater, remember to think about the heater repair cost. You may need to flush out the system annually.

These are just some factors that can affect the cost of a tankless water heater system.

Comparison with traditional water heaters

inarticle image-tankless water heater cost-Comparison with traditional water heaters

Tank and water heaters are cheaper and last longer than tankless ones. But, they use more energy to store hot water in the tank, leading to higher energy bills. On the other hand, tankless water heaters are costly upfront but save money in the long run with lower energy costs and fewer maintenance requirements.

Here is an overview of both of them:

Traditional water heater Tankless water heater 
Working process 
Have capacity of 30 to 60 gallons being 5 feet taller and 2 feet wider. They don’t have storage space and are around only 2 feet tall which directly pass water in pipeline. 
They are cheaper costing around $ 570 for electric and $600 for gas using heater. They cost between $1300 and $3700 including installation charge. 
Energy efficiency 
Gas water heaters as better and electric ones are fair for annual energy consumption cost. Tankless water heaters of both gas and electric types operate more efficiently than their conventional counterparts. 

Potential savings

inarticle image-tankless water heater cost-Potential savings

Tankless water heaters are a good option for saving money and space in your home. 

Unlike the bulky traditional gas storage water heaters, tankless models are small and can be mounted on the wall. This frees up closet space that you can use for other things.

Certified tankless water heaters are designed to heat water only when needed. This feature is not available in traditional electric and gas storage models. 

A family of four can save up to $95 a year on gas bills. Over time, this adds up to $1,800 in savings. [1]Energystar, “Save money and more, https://www.energystar.gov/products/water_heaters/water_heater_whole_home_gas_tankless/benefits_savings”

So, with tankless water heaters, you can save money and free up valuable space in your home.

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Is the cost of a tankless water heater higher than a traditional water heater?

Yes, tankless hot water systems cost more upfront than traditional gas or electric storage water heaters. But they may save you money in the long run due to their energy efficiency and longer lifespans.

What factors affect the cost of a tankless water heater installation?

Several factors can affect the cost of a tankless water heaters installation, such as type of fuel, flow rate, brand used, location, and required building permits. Additionally, maintenance costs should also be taken into consideration.

Can installing a tankless water heater save money on energy bills in the long run?

Yes, tankless water heaters can help save you money in the long run due to their energy efficiency.

Some certified models can even reduce your family’s annual gas bills by up to $95 annually. Over its lifetime, this adds up to around $1,800 in savings.

Are there any rebates or tax credits available to offset the cost of a tankless water heater?

Yes, the government offers credits to help you pay for energy-efficient upgrades like tankless water heaters.

This can save you money over time on your energy bills. Upgrades include heat pumps, tankless water heater maintenance, heaters, insulation, doors and windows, and more. [2]Energystar, “Savings for homeowners, https://www.energystar.gov/about/federal_tax_credits”

How long does it typically take to recoup the cost of a tankless water heater through energy savings?

The amount of time it takes to recoup the cost of a tankless water heater varies based on how much energy you use and the fuel cost.

On average, however, it can take 5-10 years to recover your initial investment completely. [3]Center for Energy and Environment, “Actual savings and performance, https://www.mncee.org/actual-savings-and-performance-natural-gas-tankless-water-heaters”

Considering the tankless water heater price with plumbing services can make it easy to install.

While the new tankless water heater costs more upfront, their lifetime savings may make them worth the extra expense.

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