2023 Water Heater Installation Cost & Prices

There are different options to purchase when it comes to water heaters. Water heater installation cost depends on a number of factors such as type, size, brand, and other cost factors.

In this article you will read a concise overview of water heater installation cost factors for different types water heaters. You can also go to our platform here, where you can have access to a variety of water heaters to compare against each other.

Below, you can find a list of average water heater installation cost (material and labor) based on the heater type:

Standard tank : $600 – $1,800
Tankless : $800 – $3,500
Solar : $1,500 – $6,600 [including federal rebates and tax credits]
Hybrid : $1,500 – $4,400
Indirect : $1,200 – $4,300

Tank units take 2 to 6 hours to install on average.
Most tank units last 8 to 15 years on average.
Most homes need a 40- to 50-gallon tank or a tankless system.
Annual operating costs are $225 to $580 for tank units and $150 to $535 for tankless systems.

Water Heater Installation Cost by Type

The most basic way to categorize water heaters is based on whether they have tanks or are tankless. Water heaters can also be categorized based on their fuel type. For standard tank water heaters, the possible types based on fuel source include gas, electric, propane, oil-fired, indirect, hybrid, and solar. For tankless water heaters, however, the possible types based on fuel source include gas, electric, and propane.

To have a general comparison between tank and tankless water heaters, tankless water heaters could have 25% to 50% higher unit price and a labor cost of 50% to 150% higher than their standard tank counterparts. In other words, your water heater installation cost could go 20% to 100% higher when you choose tankless water heaters. Tankless water heaters, on the other hand, have the advantage of being more energy efficient, able to supply unlimited hot water on-demand, and last up to 35% longer than their standard tank counterparts.

Water heater installation cost could also be affected by the venting system of fuel-fired water heaters (Gas, propane, and oil-fired). The gaseous products of combustion in these water systems can be exhausted via atmospheric, direct, or power vent configurations. In terms of costs, consider the fact that your water heater installation cost would be $350 to $1,000 more than direct vent and atmospheric vent installations while using a power vent configuration.

Gas Water Heaters

The unit price for gas water heater systems ranges from about $400 to $1,800 for standard tank units and $400 to $2,100 for tankless units. Moreover, the labor cost for standard tank gas water heaters is between $200 and $1,000, and between $300 to $2,500 for tankless gas water heaters. This means that gas water heater installation cost for standard tank units is $600 to $2,800 and for tankless units is $700 to $4,600.

Electric Water Heaters

Water heater installation cost for standard tank electric water heaters ranges from $500 to $2,100, while for tankless electric water heaters, it is $600 to $2,500. The unit price portion of the total cost for standard tank electric water heater is about $300 to $1,100 and for tankless systems is $300 to $1,000. It means that a labor range of $200 to $1,000 is to be expected for standard tank water heaters and $300 to $1,500 for tankless electric water heaters.

Propane Water Heaters

Apart from the special on-site fuel tank cost ($1,200 to $2,400 for a 500-gallon tank), that is a requirement for these kinds of systems, water heater installation cost for propane water heaters is $700 to $3,000 for standard tank units and $700 to $4,600 for a tankless unit.

Oil-fired Water Heaters

Oil-fired water heaters are common in commercial applications as they provide up to 4 times faster water heating. However, they require more maintenance. Nonetheless, water heater installation cost for oil-fired heaters ranges from $2,000 to $4,500, while the unit price alone is $1,700 to $2,500. It means the labor cost is estimated to be between $300 and $2,000.

Indirect Water Heaters

Indirect water heaters use the home’s boiler as the heat source to circulate fluid through a heat exchanger in the storage tank, making them a more efficient water heater option. The unit cost for these systems is something between $900 and $2,800 and their installation labor cost is estimated from $300 to $1,500. Therefore, you water heater installation cost for indirect configurations is $1,200 to $4,300.

Hybrid Water Heaters

In hotter climates, hybrid water heaters which pump heat the surrounding air it into the storage tank become a great option. They are up to 3 times more efficient than electric standard tank heaters for example, and might be eligible to federal tax credits of up to $300 and possibly additional rebates.

Unit price for hybrid water heaters ranges from $1,200 to $2,800 and labor costs range from $300 to $1,600 making the total water heater installation cost ranging from $1,500 to $4,400.

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Solar Water Heaters

Solar water heaters can be used as standalone or hybrid systems coupled with electric or gas heaters. By using solar water heaters, you could save 50% to 80% on your energy costs.

Solar water heaters cost $1,000 to $6,000 for their units and $2,000 to $3,000 for their installation labor costs. It means that your water installation cost for solar configurations ranges from $3,000 to $9,000. However, there are considerable federal tax credits and rebates for using solar systems, which make the final installation cost range from $1,500 to $6,600.

Additional Water Heater Installation Cost Factors

There are situations that will cause an extra labor cost. If you have old plumbing that needs to be brought to code, it could add $75 to $500 to your normal labor cost. In addition, you might need some additional exterior, closet, etc. installations, which would add $75 to $150to your labor cost. It might be helpful to know that plumbers normally charge $45 to $150 per hour and electricians $40 to $100 per hour.
In most cities, you will be required to acquire water heater permits that would add $25 to $250to your total water heater installation cost.
You may be required or due to its benefits are prone to provide an expansion tank for your water heater. In this case, a cost of $100 to $400 will be added to your total water heater installation cost.
Sometimes, removing an old water heater might add an extra labor cost of $70 to $500 to your water heater installation cost.
If you had to move your water heater from its currently set location, depending on fuel source, type, moving distance, and requirement for drywall repairs, new gas line running, plumbing, etc. your water heater installation cost could increase from $500 to $2,500.