Homeowners who need to install a water heater should know the cost of the same. The average cost of installing a water heater is between 750 and 2100 dollars with most homeowners paying about 1200 dollars.
Nonetheless, the cost depends greatly on the model of the water heater, the difficulty of the installation, the place, and other needs.
This detailed guide unravels all the elements that influence the cost of installing a water heater and can assist you in budgeting and making the right decisions regarding the hot water requirements of your home.
The kind of water heater you select has a great influence on the overall cost of installation. All the systems have various advantages, capacity and installation needs.
| Water Heater Type | Unit Cost | Installation Cost | Total Average Cost |
|---|---|---|---|
| Conventional Tank | $300-$1,500 | $450-$800 | $750-$2,300 |
| Tankless (Gas) | $600-$2,000 | $800-$1,500 | $1,400-$3,500 |
| Tankless (Electric) | $500-$1,500 | $700-$1,300 | $1,200-$2,800 |
| Heat Pump (Hybrid) | $1,200-$3,500 | $700-$1,500 | $1,900-$5,000 |
| Solar | $2,000-$5,000 | $1,500-$3,000 | $3,500-$8,000 |
The traditional tank water heaters are the least expensive to purchase, whereas the tankless ones are more expensive to buy but save energy in the long run. Heat pump and solar water heaters are major investments that have the potential of high energy efficiency and savings on utility bills.
Factors That Affect Water Heater Installation Costs
There are several factors that determine the end price of installing a water heater other than the type of unit.
Knowing these factors will enable homeowners to predict possible rise in costs.
Location and Accessibility
Labor costs may be raised by 20-30 percent when the installation is in hard-to-reach areas such as crawl spaces, attics, or small closets. Moving a water heater to a different location usually costs an extra 200-500 dollars because of extra plumbing and potentially electrical work.
Capacity and Size Requirements
The capacity of water heater influences the cost directly. A 40 gallon tank is normally used by 2-4 individuals and bigger families might require 50-80 gallon tanks.
Every unit size increment costs about 100-300 dollars. Sizing your water heater properly is important to efficiency and avoiding early replacement.
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Fuel Type and Utility Connections
Fuel conversion (e.g. electric to gas) may cost an additional $500-$1,500 because of new utility connections. Switching to a tankless model may need electrical work ($300-$800) or gas line work ($500-$1,000).
Code Compliance and Permits
Expansion tanks, earthquake straps, drain pans or better venting may be required by local building codes. The average permit cost is between 50-200 dollars, and inspection can cost you an additional 50-150 dollars.
Cost Breakdown for Water Heater Installation
Knowing the specific elements that constitute your total installation cost will enable you to know where you can save some money or where extra costs may be incurred.
Equipment Costs
The water heater unit alone usually constitutes 40-60 percent of the entire installation cost. In addition to the basic unit, other equipment may be:
- Pressure relief valves: $20-$40
- Expansion tanks: $40-$150
- Water and gas connectors: $20-$60
- Venting materials: $40-$300
- Drain pans: $15-$40
- Pipe fittings and valves: $25-$100
- Water heater stands or platforms: $40-$100
The high-end models that have such features as digital displays, Wi-Fi connectivity, or more efficient ratings can increase the unit price by $200-$500 but can provide convenience and cost savings in the long run.
Labor Costs
Labor cost of professional installation is usually between 45-150 dollars per hour, and most common installations would take 2-3 hours. The geographic location also has a major influence on these rates and in most cases, urban areas have higher prices as compared to rural areas.
Installations that take a long time and involve significant changes may take up to 8-10 hours of work. The highly specialized professionals can demand high prices:
- Licensed plumbers: $45-$150 per hour
- Electricians (for electrical upgrades): $50-$100 per hour
- HVAC specialists (for certain venting systems): $75-$150 per hour
Removal and Disposal Fees
The cost of removing and disposing of an old water heater is about 100-200 dollars. This is part of the installation package of some contractors and others charge it separately.
In some localities, the disposal of the environmentally responsible may be charged extra.
DIY vs. Professional Installation: Cost Comparison
Self-installation is a common way of saving money by many homeowners, but there are significant factors to keep in mind other than the immediate savings.
| Aspect | DIY Installation | Professional Installation |
|---|---|---|
| Average Cost | $400-$900 (equipment only) | $750-$2,100 (total) |
| Time Investment | 4-10 hours for beginners | 2-3 hours typically |
| Warranty Coverage | May be voided | Fully maintained |
| Safety Concerns | High (gas, electrical, flooding) | Minimal |
| Code Compliance | Homeowner responsibility | Handled by contractor |
The risks of DIY installation are personal injury, property damage, and voided warranties, and possible code violations. The majority of manufacturers need professional installation to keep the warranties in place. In the case of tankless and complicated systems, professional installation is highly advised.
Additional Costs to Consider
In addition to the simple installation, there are a number of additional costs that can be incurred based on your particular circumstance and needs.
Home Modifications
In the process of upgrading or changing the type of water heater, structural changes might be required:
- Venting upgrades or installation: $300-$800
- Dedicated electrical circuit installation: $200-$500
- Gas line extensions or upgrades: $350-$800
- Water line modifications: $150-$400
- Platform or stand construction: $100-$300
Tankless water heaters may need a lot of venting and utility upgrades, which may cost an additional $500-$1,000 to install, however, these upgrades make the system more efficient and safe.
Additional Components and Upgrades
Optional enhancements can improve performance, efficiency, and longevity:
- Water softener integration: $400-$1,000
- Recirculation pumps (for faster hot water): $200-$600
- Smart water heater controllers: $150-$500
- Premium anode rods: $30-$150
- Leak detection systems: $50-$300
- Insulation blankets: $20-$100
Water Heater Installation Costs by Region
The cost of installation differs greatly in different parts of the United States because of the differences in the labor rates, permits, and cost of living.
| Region | Average Installation Cost | Cost Factors |
|---|---|---|
| Northeast | $1,100-$2,400 | High labor rates, strict codes |
| Midwest | $800-$1,900 | Moderate labor costs, basement installations |
| South | $700-$1,800 | Lower labor rates, fewer code restrictions |
| West | $1,000-$2,500 | High permits costs, seismic requirements |
| Pacific Northwest | $950-$2,200 | Energy efficiency requirements |
Metropolitan regions usually charge 15-30 percent more as compared to the rural regions. Certain areas have unique requirements which influence costs, e.g. earthquake strapping in California or increased energy efficiency standards in the Northeast.
Long-term Cost Considerations
In comparing water heater products, it is better to look at the lifetime costs instead of the installation costs to get a clearer view of what you are investing into.
Energy Efficiency and Operating Costs
Annual operating costs vary significantly by water heater type:
- Conventional electric tank: $450-$600/year
- Conventional gas tank: $300-$500/year
- Tankless electric: $300-$450/year
- Tankless gas: $200-$350/year
- Heat pump (hybrid): $200-$350/year
- Solar with electric backup: $100-$250/year
The more efficient models are expensive to purchase but save a lot in the long run. The Energy Star certified models are generally 10-50 percent more energy efficient than the regular models and could save hundreds of dollars a year.
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Lifespan and Replacement Cycle
The different types of water heaters have different anticipated lifespan which influences the long-term ownership costs:
| Water Heater Type | Average Lifespan | Maintenance Cost/Year |
|---|---|---|
| Conventional Tank | 8-12 years | $50-$100 |
| Tankless | 15-20 years | $75-$150 |
| Heat Pump (Hybrid) | 12-15 years | $50-$150 |
| Solar | 15-30 years | $100-$200 |
Good maintenance increases the life of the equipment and keeps it efficient. Professional annual service usually costs between $75 and 200 dollars but may help to avoid premature failure and costly repairs.
How to Save on Water Heater Installation Costs
There are a number of ways in which the cost of installing water heater can be minimized without sacrificing quality or safety.
Timing and Planning
The non-emergency replacements provide more cost-saving opportunities. To prevent the emergency rates of installation, which are 25-50 percent higher than the regular rates, plan your replacement before your current unit breaks down.
Other contractors will have discounts in off-peak seasons, which are usually fall and spring seasons when the demand of HVAC and plumbing services is not high. It is possible to unlock contractor discounts by bundling a water heater installation with other home improvements.
Rebates and Incentives
Energy-efficient water heaters often qualify for financial incentives:
- Federal tax credits: 30 percent of cost of some solar systems
- Utility company rebates: $100-$500 for energy-efficient models
- State energy programs: Varying incentives by location
- Manufacturer rebates: $50-$300 on select models
The Database of State Incentives for Renewables & Efficiency (DSIRE) gives location-specific data on programs available. Other utilities also provide special financing of energy efficient home improvements.
Comparison Shopping
Get a minimum of 3-5 quotes of licensed professionals to compare prices and services. In assessing the bids, they should contain:
- Detailed breakdown of all costs
- Permits and inspection fees
- Old unit removal and disposal
- Warranty information
- Timeline for completion
You can also buy the water heater unit yourself at the retailers during sales and get up to 10-20 percent off the retail price and still pay a professional to do the installation.
How to Get the Best Water Heater Installation Prices?
- To begin with, remember that the quality of installation is the most crucial thing in the case of water heater project. Therefore, never compromise the contractor quality in favor of lower price.
- Second, request at least 3 bids prior to making the decision. To receive 3 free estimates of your local water heater contractors, you can click here and this estimate already considers rebates and tax credit and automatically filters out unqualified contractors.
When to Replace vs. Repair Your Water Heater
When deciding on whether to fix an old water heater or spend money on a new one, a number of factors have to be considered.
Age and Condition Assessment
Water heaters that are near or beyond their projected life are usually more suitable candidates of replacement. One of the rules of thumb is the 50 percent rule – when the cost of repairs exceeds 50 percent of a new unit, it is generally more cost effective to buy a new one.
Warning signs indicating replacement may be necessary include:
- Rusty water or visible corrosion on the tank
- Rumbling or banging noises
- Water leaking from the tank itself (not connections)
- Inconsistent water temperature
- Significant reduction in hot water volume
- Multiple repairs in recent years
Emergency vs. Planned Replacement
The cost of emergency replacements is normally 25-50 percent higher than planned installations because of the rush service charges, the lack of comparison shopping, and the possible after-hours labor rates.
The unusual noises, discoloration of water or temperature variations are some of the signs that show that failure is imminent. By tracking these indicators you can pre-plan a replacement before total failure and avoid emergency installation premiums.
There are contractors who provide financing on unexpected replacements, which can help control the short term financial burden, but still enable a quality installation.
Don’t Overpay for HVAC Services – Call 888-894-0154 Now to Compare Local Quotes!
How to Get the Best HVAC Prices
- Firstly, keep in mind that installation quality is always the most important thing for residential HVAC project. So never sacrifice contractor quality for a lower price.
- Secondly, remember to look up the latest rebates as we talked above.
- Thirdly, ask for at least 3 bids before you make the decision. You can click here to get 3 free estimates from your local contractors, and this estimate already takes rebates and tax credit into consideration and filter unqualified contractors automatically.
Lastly, once you chose the right contractor, remember to use the tactics from this guide: Homeowners Tactics When Negotiating with HVAC Dealer to get the final best price.
