Hot Topic: How Much Does Water Heater Installation Cost in 2022?

Your home’s water heater is one of the most essential appliances, something you use on a daily basis.

Hot bath? Water heater.

Doing the washing up? Water heater.

Curled up with a book on a winter’s night? I’m guessing the water heater is at work for your central heating!

Yet the water heater is usually out of sight and out of mind – until it’s time to replace it.

And if you don’t want to freeze, you’ll need to replace it fast. But how much does it cost to install a new water heater?

So if you’ve got a burning desire to know how much it costs to install a water heater, read on. We cover every size and every type for this hot topic.

For a quick look at our findings, here are the hottest takeaways.

Key Insights:

  • The general range of water heater installation or replacement is $800 – $1,200.
  • Tankless water heater installation starts at $1,200.
  • The national average for water heater installation is $1,176.

What's The Average Cost of Water Heater Installation

Water heater installation can cost anything from $270 to $3,500. But in general, the cost of water heater installation will be between $800 and $1,200.

And across the United States, the average cost for water heater installation was $1,176.

The cost of water heater installation can vary based on a few factors, which we’ll cover in the next section. But for a ballpark figure on water heater installation, look no further.

If you’re hiring a plumber, you can expect to pay between $45 and $200 per hour. An electrician will cost between $50 and $100 an hour. Installation can take up to three hours, so labor costs can be from $150 – $600.

Water Heater Installation By Size

Smaller water heaters are cheaper to install. The cost of installing a 30-gallon tank water heater is between $270 and $1,000. But the average cost of installing an 80-gallon tank water heater will range from $1,000 to $3,200.

Water Heater (Gallon Tank)Average Installation Cost
30-gallon tank$270–$1,000
40-gallon tank$300–$1,600
50-gallon tank$400–$2,500
80-gallon tank$1,000–$3,200

Water Heater Installation By Type

Tankless water heaters are more expensive to install than tank water heaters, and high-efficiency heaters are more expensive again – although they’ll save you money in the long run.

Your Choice Of Water Heater

Not all water heaters are created equal. From propane-powered heaters to high-efficiency options, some water heaters are going to cost more than others.

Tank Water Heaters

The most popular choice amongst homeowners is tank water heaters. While they’re not the most efficient on the market, they’re loved for their affordability and the ease with which they can be installed.

The range for installation of a tank water heater is under $300 for a small 30-gallon tank or up to $1300 for the average installation.

Tank water heaters can be installed in a utility closet or garage and they work by continually heating and holding water, giving your home hot water on demand. But because they’re constantly reheating, they can lead to larger energy bills and a shortened lifespan.

Tank water heaters convert around 60% of the energy they use into heat and typically last for between 8 and 12 years before replacement.

Tankless Water Heaters

Tankless water heaters heat water on demand without the use of a tank – and they can be powered by both gas and electricity. They’re far more efficient than tank water heaters, and convert up to 94% of the energy they use into heat. However, they’re also considerably more expensive to install.

Installing a tankless water heater should cost between $1,200 and $3,500, depending on the system you choose.

They can be installed out of the way in garages or utility closets, but smaller models can also be distributed throughout the home so your hot water has less of a distance to travel.

Whether powered by gas or electricity, tankless water heaters require more labor to install than a traditional tank water heater. Despite the initial cost, they’ll last longer than tank water heaters – around 20 years – and thanks to their high efficiency they will reduce your energy bills.

Indirect Water Heaters

Indirect water heaters take the heat generated by an existing furnace or boiler and transfer that to your water. This can make them an efficient option as they use heat that would otherwise be wasted.

Indirect heaters require a tank, but because heating your water is a byproduct of energy already used, they’ll keep your monthly bills low. The installation cost of an indirect water heater is higher than a tank water heater, however, and averages at around $1,500.

Solar Heaters

Solar water heaters are rarely the sole source of heat in any system, but they’re a hyper-efficient option. Solar water heaters combine a tank water heater system with solar power, using the energy from the sun’s rays to warm your water.

Water is heated and stored in a tank, but the system only draws energy from your home if the sun isn’t generating enough heat – this makes them exceptionally efficient, and a great way of saving on your monthly bills.

Solar water heaters cost around $2,000 to install although this can increase to $3,000 if you require a water pump in the system, and it’s a labor-intensive process leading to high costs from employing an electrician.

Propane Heaters

Propane water heaters are usually combined with a tank water heater design in settings where electrical or natural gas power isn’t available – such as off-grid living. Inevitably, these become more expensive to install and cost between $1,000 and $3,000.

Hybrid Heat Pumps

Hybrid heat pumps absorb heat from the air surrounding the water heater and use this to heat your water. They’re connected to your mains power supply as a backup only.

This cutting-edge technology makes them the most efficient water heaters on the market – but they don’t come cheap. Hybrid heat pump water heaters cost between $1,200 and $3,500 to install.

Calculating Your Water Heater Installation Costs

The average cost of water heater installation might not mean much if you live on top of a mountain or Mr. Burns is your joiner. Let’s take a look at the factors that contribute to the actual cost of water heater installation.

Gas vs Electric Water Heaters

All water heaters, including solar and hybrid heat pumps, require a power source even when that source of power is just a backup. For the most part, you’ll be choosing between gas and electric powered water heaters.

Electric water heaters are cheaper to install. A 50-gallon tank electric water heater will cost around $500, whereas an equivalent gas-powered water heater will cost around $700.

However, gas water heaters are considerably more energy-efficient than electric and will save you money every month. That efficiency also gives them green credentials.

Ease of Installation

Where you can locate your water heater in your home will have an impact on the cost of water heater installation. Installation in an easily-accessible garage or utility closet will always be cheaper than installation in a hard-to-reach attic, for example.

Additionally, any carpentry required to house the water heater might mean a joiner joining the electrician and plumber. It adds up!


Tank water heaters can be sized to hold anything from 20 gallons to upwards of 100. Larger models cost significantly more, both in unit price and in terms of installation.

Don’t buy a water heater that’s any larger than you’ll need. A 40-gallon tank is enough for a two-person household but larger families who want to have multiple hot showers running will need an 80-gallon tank.


When you’re replacing a water heater it’s common to discover that old fixtures and fittings aren’t suitable for your new heater. This is especially likely if you’re moving from gas to electricity-powered, or from a tank to a tankless system.

Buying additional piping, valves and connectors can add hundreds of dollars to an installation. You can save money by replacing your old water heater with a similar system.

Venting Needs

Water heaters require venting, both to enable airflow around the heater and to expel gases such as carbon dioxide created by the process of heating water. Direct vents expel air through a chimney to the outside of the home, while power vents use a fan to vent the unit.

Adding a direct vent can cost between $500 and $1000 including labor costs, while power vent heaters will cost around $300 to $500 to install.


Because the installation of a water heater is a significant piece of work on your home, many cities and districts require a permit to be obtained before the work can be carried out.

Usually, this amounts to an admin fee and it’s less than $100 – your contractor should be able to help you understand the local requirements.

Old Water Heater Removal

Out with the old, in with the new. Most contractors will charge a small fee for removing your old water heater and $100 – $150 is the average across the country.

Running Water And Gas Lines

If you’re replacing like for like you won’t need to run any new lines but if you’re switching power or moving your water heater to a new location then you may need to run new water and gas lines to your heater.

Installing a water line can cost between $300 and $1,000 and installing gas can cost between $250 and $80.

Switching Fuel Sources

Switching fuel sources will increase the cost of installation for a water heater. Most often people are moving away from natural gas and choosing to power their water heater with electricity – this means adding electrical wiring and requires a new circuit because water heaters can’t be placed on the existing circuit.

The cost of moving from gas to an electrical heater will add between $200 and $500 to your installation costs.

How To Spot A Faulty Water Heater

Replacing a water heater is a costly job, so you don’t want to do it too early. Leave it too late, however, and you’ll be out in the cold. Here’s how to spot a faulty water heater so, like Goldilocks, you won’t be too hot or too cold – you’ll be just right.

Water Tastes Metallic

If you notice your water starts to taste metallic or comes out stained with rust, then it’s likely that an anode in your water heater is failing. The anode attracts any metal particles and keeps them out of your water supply.

You can replace an anode, so don’t jump the gun on a new water heater just yet. Get an engineer out to have a look.

Strange Noises From Your Water Heater

It’s scary stuff – the things that go bump in the night. And it’s still pretty scary when it turns out to be a faulty water heater! Clunks, bangs, and cracks from your water heater are a sure sign that things are going wrong.

Look Out For Leaks

If your water heater is leaking then something’s gone wrong. A leaking water heater probably needs to be replaced as soon as possible, so turn off the power supply immediately.

Water Temperature Is Falling

Sometimes the heating element in a water heater is the first thing to go. If you notice the water from your taps isn’t as hot as you’d expect, then you should check to see if your water heater is working correctly.

Your Energy Bills Are Rocketing

Towards the end of a water heater’s lifespan, it will begin to lose some efficiency, for example, when the smart functionality begins failing and water is reheated more often than needed. Watch your energy bills for any fluctuations.

Age Is Just a Number

Lastly, old water heaters need to be replaced before something goes wrong. If your tank water heater is older than around 10 years, or your tankless heater is approaching 20 it might be time to start shopping around. With so many powerful and energy-efficient water heaters on the market, it’s the right time for an upgrade!

Water Heater Installation Costs FAQ

Got some burning questions about water heater installation costs? Here’s your hot water heater installation FAQ.

How Much Does It Cost To Install A Water Heater?

The cost of installing a water heater varies based on many factors, but the average cost in America is $1,176 as of 2022.

How Long Will A Water Heater Last?

Tank water heaters typically last between eight and 12 years with proper care. Tankless water heaters can last up to 20 years.

How Big Should My Water Heater Be?

A 40-gallon water heater should be adequate for a family of two, while an 80-gallon tank could be required for a family of five. As well as the number of members of your household, you’ll have to assess your hot water consumption: how many bathrooms do you have, and how many showers can be running at once?

Can I Install My Own Water Heater?

Unless you’re experienced with both plumbing and electrics, it’s not a good idea to install your own water heater. Water heater installation is expensive for a reason – it requires professional understanding and years of experience. If you install your own water heater it’s likely that you’ll void the warranty, so a small error could cost you big.

Final Thoughts…

When your water heater starts failing it can be a stressful time, especially if the long nights are closing in.

With an average cost of $1,176, replacing your water heater isn’t cheap. But by upgrading to a high-efficiency model or tankless system you can knock a few bucks off your monthly energy bill – think of it as an investment in the future.

And there are plenty of ways to save. Replacing a water heater with a similar model will reduce your installation costs while relocating your heater to a more accessible location can pay dividends.

So don’t let replacing a water heater freeze you in your tracks!

Eric Phillips

Hi, I’m Eric, a Plumber, Home Repair Expert and Chief Editor behind Dripfina. I first became interested in water purification and water safety when I spent a couple of years traveling the world. I not only learned the importance of keeping my own water fresh and pure (yes, sometimes the hard way…) but I also saw how important water is as a resource worldwide. Read more about me...

1 thought on “Hot Topic: How Much Does Water Heater Installation Cost in 2022?”

  1. Thanks, This was very helpful in my understanding of my TOTAL Cost with the Tank, Expansion Valves, Additional piping, disposal of old tank charges and County Fees. I now figure my total cost should not be more than $2,000 for a 50 Gal Gas Water heater replacement.


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