Tankless water heater cost has three components:
- 1Tankless water heater price
- 2Tankless water heater installation cost
- 3Operating cost
Here’s an overview. Complete details for each cost type follow the overview.
Tankless Water Heater Price
Electric tankless water heaters start at about $125. Whole-house electric tankless water heaters range to about $1,000.
Gas tankless water heaters start at about $125, but for high-quality, long-lasting gas tankless models, prices start at about $500 and range to more than $2,000.
Tankless Water Heater Installation Cost
Installing an electric model costs $150 to more than $700. The cost to install a gas water heater costs about $600 to $1,500.
DIY installation might be possible for either type based on your skills.
Operating Cost / Energy Cost
This cost is the cost of energy required to run the water heater. The annual operating costs for electric water heaters averages about $75 for the lowest capacities to more than $300 per year for whole-house electric tankless water heaters.
Gas water heaters cost approximately $200 to $600 per year to operate based on their size and efficiency.
Tankless Water Heater Costs 2019
This table shows gas and electric tankless WH cost by size.
Gas Heater Size / BTUs
Gas Heater Cost Range
120K - 140K BTUs
$500 - $1,200
$750 - $1,600
$900 - $1,900
190K - 199K BTUs
$1,000 - $2,200
Electric Heater Size / kWs
Electric Heater Size / kWs
Less than 6kW
$100 - $225
$175 - $250
$215 - $390
$365 - $550
$400 - $635
$425 - $715
$435 - $800
Installation costs are discussed below.
Cost Factors: Tankless Water Heaters
How much a gas or electric tankless water heater costs depends on a range of factors – some obvious and others more obscure.
#1: Gallons per minute (GPM) flow rate: The more hot water the unit can produce, the more it will cost when all other factors are equal.
For gas models, GPM is a factor of the BTU capacity, typically from 140,000 BTUs to 199,000 BTUs.
For electric models, GPM is a factor of kilowatts. The range is about 3.5kW to 36kW.
- Electric point of use (POU) models start at about 0.6 GPM and range to about 2.0 GPM.
- Electric whole house models range from about 3.0 GPM to more than 5.0 GPM.
- Gas tankless water heaters range from about 5.5 GPM to more than 10 GMP.
Note on maximum flow rate and incoming water temperature: The coldest ground water temperatures vary tremendously based on climate, as this map shows.
The maximum GPM flow rate of a tankless water heater can only be achieved when incoming water is relatively warm. The colder the incoming water is, the higher the rise in temperature required, and the lower the GPM output will be. For example, a water heater that can deliver 5.0 GPM in Florida might only deliver 2.5 GPM during a Michigan winter.
There is more information on this topic in our Tankless Water Heater Buying Guide.
Note on thermostat setting: Also, the higher you have the thermostat set, the lower the GPM will be. A unit capable of producing 6 GPM in your climate when the thermostat is set to 110F might only manage 5 GPM at 120F or 4 GPM at 140F.
#2: Quality: The quality of the units varies significantly. Quality of the major brands is discussed in our brand guides. When comparing models, view warranty information. In general, the better the quality, the longer the warranty.
#3: Efficiency (gas only): Gas tankless water heater efficiency starts at about 82% or .82 UEF (uniform energy factor). The most efficient gas models are about 95% efficient. A secondary heat exchanges is used to boost efficiency, and the added equipment raises the cost.
#4: Indoor vs. Outdoor (Gas only): Indoor units cost more because they must be built with fittings to connect to a vent. Cost is typically $25 to $75 more for the indoor version vs. the outdoor version of any given model. This affects installation cost too (details below).
#5: Recirculating pumps (gas only): A recirculating pump can be installed in a whole-house gas unit to keep water warm in the line between the pump and an outlet. These pumps increase unit cost by $300 to $500 and raise installation cost too. Not sure if you want to install a recirculating pump? Read our article Is a Recirculating Pump Worth the Money?
#6: Other Features: Additional features that increase cost for gas and electric models include WiFi capability, wireless remotes and wall thermostats.
Tankless Water Heater Installation Cost
This table shows installation costs for each water heater type. Cost factors are discussed below the table.
Type & Installation
Installation Cost Range
$150 - $300
Electric 110V plus outlet
$250 - $500
$300 - $600
Electric 220 plus outlet
$500 - $750
$600 - $1,000
Gas indoor plus vent
$900 - $1,500
Installation Cost Factors
Tankless water heater installation cost ranges from $150 to $1,500. Here are the factors.
#1: Whether an outlet must be installed and wired (Electric only): When a 110-120V outlet is available to plug the unit into, an electric tankless unit is easy to install. Cost goes up when an outlet must be installed.
#2: 110V vs 220V (Electric): The same scenario exists for 220-240V units. If an outlet must be added and wired back to the electrical box, possibly with the addition of one or more circuit breakers, cost is higher.
#3: Vent or no vent (gas): When replacing a tankless water heater and the old vent can be used, cost is lower than when a vent must be installed through the wall ($100-$200) or the roof ($300-$600 or more).
#4: Indoor vs. Outdoor (gas): Gas units installed outdoor don’t need a vent, so cost is lower.
#5: Installation complexity: When installation is in a crawlspace, attic or other location that is difficult to access and work in, cost will be higher.
#6: Where you live: Your location affects general cost of living. It might impact the number of installers in your area too. Competition can lead to lower prices for installation.
#7: Recirculation pump (gas): Wiring a recirculating pump takes time and materials. So does installing the piping necessary to achieve recirculation. There are several methods of recirculation. The method you choose will affect cost.
We’ve completed a Guide to Tankless Recirculating Pumps where you can research pros, cons and costs.
Tankless Water Heater Operating Costs & Factors
As noted above, energy costs are:
- $75 to more than $300 per year electric tankless water heaters
- $175 to $500 per year for gas tankless heaters
Here are the cost factors:
#1: Demand for hot water: How much hot water your household uses is the most important factor in operating cost. Plain and simple, smaller households tend to use less hot water than larger ones.
#2: Temperature rise: This is the second most important factor. The more the temperature of incoming water is raised by the water heater, the more energy the unit will consume. As noted above, the temperature of the groundwater (incoming water) and the thermostat temperature setting determine the temperature rise.
#3: Electric vs Gas: Gas heat costs less than electric heat. In most areas, burning gas directly at the water heater is a cheaper way to heat than using electricity that is created by burning gas or coal in a power plant.
#4: Natural gas vs propane: The cost of propane is 200% to 250% the cost of natural gas. Prices vary by region. See Note on Energy Guides below.
#5: Water heater capacity: The larger the kW size of an electric unit, the more energy it will use. The larger the BTU capacity of a gas unit, the more gas it will consume. Larger equals higher energy costs.
#6: Recirculation: Using a recirculating pump to keep hot water close to the outlet will increase use.
Note on Energy Guides: Most tankless water heaters have an Energy Guide mandated by the US Department of Energy. The yellow label shows the expected cost of operating the unit per year. The guides are based on average use and average energy costs. If you’re considering a gas model, be sure you’re looking at the right label, since there should be one label for natural gas (NG) and another for liquid propane (LP).
Consider the Noritz NR662, a 140,000 BTU water heater. The Energy Guide for natural gas is $160 per year. The guide for propane is $365, 228% the cost of natural gas.