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Water Heater Costs: Save Money & Stay Warm (Updated 2024)

Discover the water heater cost and save money in the long run

The instant water heater is one of the most important part of a home. But before installing, you need to know the price of water heaters.

Usually, the water heater cost in the US ranges from $600 to $4,000, depending on the type and size of the water heater. This cost includes the purchase cost and installation.

This Dbd guide covers various types of water heaters, factors that impact installation and maintenance costs, and financing options for purchasing a water heater. Additionally, learn about water heaters, their installation and maintenance costs, and how to finance their purchase.

Types of water heaters

Water heaters come in several types that you can find in the market. Here are the most common ones. [1]Energy Gov, “Types of water heaters, https://www.energy.gov/energysaver/selecting-new-water-heater”

Traditional storage tank water heaters

inarticle image-water heater cost-Traditional storage tank water heaters

A tank-style water heater is the most common and oldest kind of water heater. It has a big tank that stores hot water so you can use it whenever you need it.

It’s important to remember that this type tank style of water heater needs to be turned on and off to save money and energy.

Tank-style water heaters can be found in many homes because they are reliable and provide hot water on demand.

On-Demand or tankless water heaters

inarticle image-water heater cost-Demand or tankless water heaters

If you are frustrated with waiting for hot water or the hot water running out quickly, think about getting an on-demand hot water heater here.

Unlike traditional water heaters, tankless heaters don’t store hot water in a tank. Instead, they heat the water as you need it. This makes them an energy-efficient choice for your home.

This heater will be ready for use when you need it. You will also save money on your electricity bills, and they can use gas lines using natural gas.

Heat pump water heaters

inarticle image-water heater cost-On-Heat pump water heaters

This water heater uses a heat pump to warm the water by taking heat from the air nearby. It’s better for the environment and cheaper than gas or traditional water heaters. 

By using it, you can save money and help the environment too.

Solar water heaters

inarticle image-water heater cost-Solar water heaters

Solar water heaters use the sun’s power to warm up water for your home. They are affordable and good for the environment. 

This means you save money and help protect the planet.

Factors that influence water heater cost

inarticle image-water heater cost-Factors that influence water heater cost

Replacing a water heater comes with certain costs, which are impacted by various factors during installation. Let’s look at some of these factors: [2]Energy Gov, “Selection criteria, https://www.energy.gov/energysaver/selecting-new-water-heater”

Type of water heater

The cost of your water heater depends on the type you choose. Tank-style water heaters are cheaper than other types but may not save energy.

Size and capacity

The size and capacity of the water heater also affect its cost. Bigger tanks require more energy, so the water heater replacement cost is higher.

Fuel system

The fuel system you choose also affects the cost. For instance, electric water heaters and heat pump models are cheaper than natural gas.

Installation cost

The installation cost of a water heater depends on the type of heater and the difficulty level involved in its installation. Generally, tankless water heaters are easier to install than traditional models, so they come with lower installation costs.


Living in a cold area means you may have to pay more for a water heating system. This is because you’ll need a well-insulated system or higher power to keep the water hot throughout the year. [3]Home Advisor, “Accessibility,https://www.homeadvisor.com/cost/plumbing/install-a-tankless-water-heater/”

Maintenance costs

It needs regular maintenance to keep your water heater running well for a long time. The cost of maintenance depends on how old your water heater is and what condition it’s in.

The average cost of water heaters

inarticle image-water heater cost-The average cost of water heaters

As we discussed the factors affecting the water heater installation costs, let’s dive into the cost breakdown.

The cost of a water heater typically ranges from $600 to $4,000. This cost includes the expense of both purchasing and installing the unit. [4]RMI, “Excel Data for RMI Heat Pumps for Hot Water, https://rmi.org/insight/heat-pump-hot-water-cost/”  

The table below shows the average cost of different types of water heaters.

Types of Water Heaters Average Cost 
Traditional Storage Tank Water Heaters $600-$800 
On-Demand or Tankless Water Heaters $800 to $1,500 
Heat Pump Water heater $2,000-$3,000 
Solar water heater $3,000-$4,000 

Financing options for water heater installation

inarticle image-water heater cost-Financing options for water heater installation

Any homeowner can benefit from a financing option for their water heater installation cost. The commonly used financing options are:

  • Credit Cards: Most major retailers and dealers offer financing options through credit cards.
  • Personal Loan: You can get a personal loan from your bank or credit union to cover purchasing and installing the water heater.
  • Home Equity Loan: If you have equity in your home, you can use it to secure a home equity loan for financing your water heater installation.
  • Government Grants or Rebates: Some governments, states, or local authorities provide grants for energy-efficient water heater installation to reduce energy consumption in the long run. 
  • Low-Income Home Energy Assistance Program (LIHEAP): This government program helps low-income families and individuals pay for energy costs, including water heaters. [5]Energy Gov, “Low-Income Home Energy Assistance Program, https://www.energy.gov/energysaver/financing-and-incentives”
  • Tax credit: Federal government offers a tax credit of up to 30% with a maximum limit of $2,000 on water heaters that meet their requirements. [6]Energy Gov, “Making our homes more efficient, https://www.energy.gov/policy/articles/making-our-homes-more-efficient-clean-energy-tax-credits-consumers”

When choosing a water heater, remember how much money you’ll save in the long run. 

It’s best to hire a professional to install it for you, which can help you save even more money. You can also find ways to pay for a new water heater that won’t break the bank.

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How much does it cost to replace a water heater?

On average, replacing a water heater ranges from $600 to $4,000. This includes both the purchase and installation costs.

What is the average lifespan of a water heater?

The average lifespan of a water heater is 10 to 12 years. However, this may vary depending on the type and make of your water heater.[7]Inter Nachi, “Estimating the lifespan, https://www.nachi.org/lifespan-water-heater.htm”

What factors affect the cost of a water heater?

The cost of a water heater is affected by the type, size, energy efficiency, and location. Make sure to consider these factors when purchasing a new one.

How much does it cost to install a tankless water heater?

Installing a tankless water heater ranges from $1,300 to $4,000. This includes both the purchase and installation costs.

Can I install a water heater myself to save on cost?

Installing a water heater alone is not recommended as it can be dangerous. A professional water heater installation can save you money in the long run.

Is it more cost-effective to repair or replace a water heater?

Replacing a water heater is usually expensive. Many people try to repair it instead as the heater repair costs less. But in the long run, replacing the water heater can save you more money. 

Understanding the average water heater installation cost can be helpful. When buying a water heater, you can also consider the monthly fee over the long term. That way, you can pick one that fits within your budget.

About the author

Andy Cale
Andy Cale
Global News Expert | + posts

Andy Cale is an experienced journalist who has been writing for over twelve years. He focuses on global news and events, particularly on current affairs. His pieces cover news stories, info guides, reviews, and opinions on various topics that are important to the world today.


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