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

Reviewed by Cristina Miguelez remodeling expert. Written by Fixr.com.

Gas tankless water heaters provide a nearly endless amount of hot water to your home. They can supply water to one room or appliance or large enough to supply all the water you need for the entire home. Tankless heaters are installed inside the walls of your home, so they do not take up space in your utility closet nor operate 24 hours a day, saving energy and money.

Because tankless water heaters come in many sizes and can be installed in different areas, they have a wide range of associated costs. The national average cost to install a gas tankless water heater is $1,400 to $3,500, with most homeowners spending around $2,500 for a whole-house water heater with an 8 GPM output installed in an easy-to-access wall. This project’s low cost is $750 for a 3 GPM gas water heater installed in an addition with an existing gas line. The high cost is $4,500 for a 10 GPM whole-house heater with a new gas line installed.

Gas Tankless Water Heater Installation Cost

Cost of a Gas Tankless Water Heater by Type

Tankless water heaters work by heating the water you need when you need it. They can be installed close to a water source or near where the water enters your home to heat it. The first method of installation is single-point installation. Single-point installations can provide water to a single appliance or room, depending on its size and location.

The second method is a whole-house water heater installation. These heaters are large enough to supply hot water to multiple rooms or appliances at one time.

If you have a large property with very high hot water needs, you may need to combine a whole-house heater with a smaller point-of-use heater to help meet supply. Below are the average costs of installing both types.

What Size Tankless Gas Water Heater Do I Need?

The hot water heater size you need is directly tied to how much water you use each day. While heaters can be categorized as being single-point or whole-house, they are also sized by the number of gallons of water per minute they can heat. That starts at around 2 to 3 GPM for gas tankless water heaters and may go as high as 11 or 12 GPM.

To determine how large a hot water heater you need, find out how much water you use at once. You also need to determine how you want to use the heater. A point-of-use heater can supply water to a single tap or appliance or supply water to an entire bathroom. Whole-house heaters generally supply multiple points, so you need to add the hot water needs of multiple areas.

Consider how many gallons per minute of water each tap or appliance uses and how many of these water sources are in use at any time.

In addition to the GPM output of the water heater, many tankless heaters are also sized by the number of bedrooms your home has. While water needs vary, larger homes with more bedrooms and occupants typically use more hot water than a smaller home with fewer bedrooms and occupants.

This can be a good guideline for the water heater size you need. However, your water needs can vary regardless of size. You may find you need a larger or smaller heater than what is generally recommended for a home of your size. Below are the basic recommendations for heater sizes based on the number of bedrooms a home has.

Cost of a Gas Tankless Water Heater by Size

In most cases, the cost of your gas tankless water heater is determined by size. Larger units can heat more water than smaller units and generally cost more. Larger units may also have different costs for their installation than smaller units. Some smaller units can be placed close to a tap or appliance to make installation faster and easier, while whole-house units need to be positioned in a more central location. This can raise the cost of the unit and installation because the gas line may need to be upgraded or moved. There can be overlap between costs on varying sizes, particularly with installation. The larger the unit you install, the higher your total costs typically are. Below are the average costs for each unit based on its GPM.

Gas Tankless Water Heater Output by Climate

Many things impact the tankless water heater size you purchase and how many BTUs it needs to heat the water. One of these is the temperature of the groundwater where it enters your home.

Your climate dictates how warm or cool the water is as it enters your home. Water entering your home that is fairly warm does not need as much energy to raise it to the final temperature. However, very cold water entering your home needs more energy to reach its final temperature. For this reason, the same size unit may produce a different GPM in different climates.

For example, a 4.5 GPM unit in a hot climate like Florida may produce as many as 7.1 GPM. However, that same unit in New England may only produce 3.5 GPM. You may sometimes need a larger unit or get away with a smaller unit based on the average groundwater temperature in your area.

Below is the average number of GPM you can expect from a 4.5 GPM unit based on the groundwater temperature outside.

Gas Tankless Water Heater Installation Cost by Fueling Method

Natural gas is not available in all areas. Homeowners who live in more rural areas may not have access to a natural gas line. Liquid propane is more available for many of these residents and what they typically use for heating a home or powering a water heater.

Functionally, natural gas and propane heaters are the same. They have similar costs for the unit and installation. Many units can run on both fuels, while other units can be easily converted to run on propane even if they were originally designed for natural gas.

The biggest differences between the two units are how the fuel enters your home and its run cost. Natural gas is piped in from the street, while propane is stored on your property in tanks. Natural gas is considerably less expensive than propane, so while your costs to purchase and install the heaters are the same, your costs to run are very different.

Below are the average costs for both heaters installed.

Natural Gas Tankless Water Heater Installation

The cost of a natural gas tankless water heater installed is $1,400 to $3,500. Natural gas tankless heaters are some of the most efficient ways to heat water. Natural gas is one of the least expensive fuels on the market right now, but it is not available in all areas. You need to run a gas line extension to your hot water heater during installation. This may require an upgrade to your gas line to ensure it can supply enough fuel for very large heaters. Smaller heaters can use an extension off an existing line without issue.

Propane Tankless Water Heater

On average, the cost of a propane tankless water heater installed ranges between $1,400 and $3,500. Propane tankless heaters function like a natural gas heater, and the two are often interchangeable. However, propane is stored in tanks on your property rather than piped in. Propane prices are often much higher than natural gas, raising the cost of running the heater. Like natural gas tankless heaters, you may need to upgrade the size of your fuel line to provide enough fuel for large heaters. You may also need to upgrade your storage tank to ensure you have adequate propane if you have high hot water needs.

Average Cost to Install a Tankless Gas Water Heater by Brand

Many good and reputable companies make gas tankless water heaters. Several make heaters in a range of sizes with several attributes, while others specialize in specific heaters. For example, A. O. Smith makes point-of-use and other smaller heaters, while Westinghouse, Rinnai, Bosch, and Navien produce mainly whole-house heaters.

Other brands, such as Marey, Takagi, and Noritz, produce a wider range of sizes from point-of-use to whole-house heaters. Many brands also specialize in specific attributes. For example, EcoSmart makes extremely efficient heaters designed to save energy, while Rheem is available with the EcoNet Wi-Fi system that helps you stay on top of maintenance and water temperature.

Most of these brands offer excellent warranties, with EcoSmart having a 12-year warranty, while A. O. Smith and Navien have a 15-year warranty on the heat exchanger. Other brands, such as Bradford White and Takagi, are well known for durability, meaning their heaters are less likely to experience mechanical failure.

Below are the average cost ranges for the some of the most reputable brands on the market manufacturing gas tankless hot water heaters.

Labor Cost to Install a Gas Tankless Water Heater

The cost to install a gas tankless water heater varies tremendously based on several factors. Small point-of-use heaters installed in an open or easy-to-access area can cost as little as $300 to $500 to install. Whole-house heaters cost an average of $900 to $1,500 in labor to install. There are several reasons for this. The first is the cost of the plumber, with most plumbers charging between $75 and $150 an hour.

Next is the installation complexity. Tankless water heaters are usually installed within the plumbing of your home, which must be cut and fitted into the water heater. Depending on how easy the pipes are to access and how difficult the modifications are, this can take a few hours or days to install properly. Your gas water heater also needs a gas line to run it. This can be a gas line extension for small heaters, but whole-house heaters may need their own line. For very large whole-house heaters, you may need to upgrade the pipe to a larger size, increasing costs. A 25-foot gas line averages $800 installed, but smaller extension lines cost $10 to $25 a linear foot.

Gas tankless heaters need to vent directly outside. So, your unit needs to be installed on or close to an exterior wall to allow the vent to be installed properly. The farther the vent pipe needs to travel to a wall to vent, the higher your installation costs. This is why the total range of labor costs for the installation is so wide.

Cost to Replace a Gas Water Heater With Tankless

If you have a current tank-style gas water heater that is nearing the end of its life, you may want to consider switching to a tankless model. Tankless gas heaters use less energy and provide nearly an endless supply of hot water, while tank-style heaters need to refill and reheat.

The switch from a tank-style heater to a tankless heater has similar costs to the installation of a new tankless heater, plus removal and disposal costs for the old heater. This makes the average cost roughly $1,500 to $3,700 in total, but you may have additional costs for extending the gas line to the new location if you are locating the new unit far from the old one.

Pros and Cons

Tankless gas hot water heaters can give you a nearly endless supply of hot water, without having to wait for your storage tank to heat and refill. They are located discreetly inside your walls or wherever your plumbing pipes are and use considerably less space than a tank-style unit. They can also save up to 50% of the energy costs over a tank-style heater, depending on how often you use them and their overall size.

Tankless heaters have a few drawbacks, however. They can be hard to access for service and maintenance if they are inside the wall, so an access panel may need to be installed for additional costs. They also do not have a storage tank of hot water available, so in the event of a power outage or a gas line is shut off, you do not have any hot water available.

Depending on your home’s layout and size, you may also need more than one heater to meet your hot water needs.

Maintenance

Tankless water heaters do not require much maintenance, and they function well on their own. However, they require yearly cleaning and inspection to help them stay at their best. This is particularly true if you have hard water because these deposits can build and cause your heater to wear faster.

Schedule your plumber to come out for a yearly inspection and cleaning of your unit. This can include removing mineral buildup, checking vents, and ensuring the unit is fully operational. This costs $75 to $260 per visit, depending on the amount of work.

Gas Tankless Water Heater vs Tank

Gas water heaters come in two varieties - tank-style and tankless. Tank-style heaters use a large storage tank to hold the water. It heats the water constantly to keep it at temperature for the times when you need it. These tanks are typically large and occupy space in your basement or utility room.

Tankless heaters work only when you need them to. Therefore, they use considerably less energy than tank-style heaters and can save money on your energy bills. The tankless heater is installed inside your plumbing, so it takes up much less space than a tank-style heater.

Tank-style heaters are generally less costly to purchase and install than tankless heaters. They are also easier to access for maintenance and cleaning. Below are the average costs of tank-style and tankless gas water heaters.

​​Electric vs Gas Tankless Water Heater

Tankless hot water heaters can use electricity or natural gas as fuel. Both types can provide you with a nearly endless supply of hot water and use less energy than a tank-style heater.

Electric tankless heaters use resistance to heat water. They are usually smaller than gas heaters and difficult to find in sizes over 6 GPM. They cost more to run than gas tankless heaters, but they are available everywhere.

Gas tankless water heaters burn natural gas to produce heat. They can come in sizes up to 11 or 12 GPM and cost less money to run than electric tankless heaters. However, you need a natural gas line in your home for them to run, which is not always available.

Gas heaters also need to vent to the outdoors, which can limit their location. They also need a gas line run, which can further limit locations and increase installation costs. Electric heaters do not need to vent and are less expensive to purchase and install.

Below are the average costs to install both electric and gas tankless hot water heaters.

Enhancement and Improvement Costs

Small Storage Tank

While tankless hot water heaters are designed to work without a storage tank, you can add one if desired. This can allow you to keep a small reserve of hot water on hand for times when the system is at capacity. This costs $600 to $2,000, depending on the tank size. Having a tank increases your energy costs.

Additional Considerations and Costs

• Permits. In most areas, you do need a permit to install a tankless water heater. Speak to your plumber or local municipality for more information.
• Lifespan. Tankless units can last up to 20 years when regularly maintained. Some brands are known for lasting longer than others, so ask your plumber for recommendations.
• Warranty. Warranties vary by manufacturer and brand. Some may be for 5 years, while others are up to 15. Speak to your plumber about which warranties may be available for the unit you are installing.
• Hard water. Hard water can shorten the lifespan of your heater. You need to descale it regularly or install a water softening system to help.
• Climate. Your climate impacts the size of water heater you need. Generally, colder climates require larger systems than warmer climates.
• Tax credit. Tax credits may be available to homeowners who make energy-efficient home improvements, including tankless heaters. Speak to your plumber and accountant about whether your system qualifies.
• Home value. Tankless heaters can increase your home’s value by roughly 4%. This varies by area and system type.