How Much Does HVAC Water Heater Installation Cost? ( Costing Guide )

Installing a new water heater is a significant investment, and the price tag often makes homeowners nervous. How much should you expect to pay? Is it worth the expense? This article will help you decide whether installing a new water heater is right for you.

Water heaters play a vital role in our daily lives as they provide hot water for various activities such as bathing, dishwashing, and laundry. It’s important to understand the costs of installing a water heater. Water heater installation costs from $900 to $3,000, with the national average being $1,400.

There are some factors to consider while replacing your water heater. The type of heater, the size, and the fuel source are all important considerations. The cost of installation can also be a factor. This guide will help you navigate choosing and installing a new water heater.

Water Heater

Water Heater

A water heater is used for heating and storing hot water. The primary function of a water heater is to heat water to a temperature above 120 degrees Fahrenheit (49 degrees Celsius).

However, some models also store cold water at lower temperatures for later use. Water heaters generally come in different sizes and shapes, ranging from small portable units to large tank models installed under sinks.

Also Learn: How To Drain A Water Heater Without Drain Valve?

How do I know if I need a new water heater?

Replacing your water heater isn’t something you’ll think about, like getting a new sofa or rug for your living room. In most cases, you won’t even think about your water heater until it performs in a less-than-ideal way.

If you notice any of these signs given below, your water heater may be failing, and you should call a professional for help:

1. Water leaking from the tank: This is one of the most obvious signs that something is wrong with your water heater. If you see water pooling around the base of your unit or dripping from any valves or fittings, there is a good chance that your tank is starting to leak.

2. Strange noises coming from the unit: If you hear popping, banging, or other strange noises from your water heater, it can indicate that the tank is starting to fail. Sediment buildup on the bottom of the tank causes these sounds, which can create hotspots and cause the metal to expand and contract unevenly.

3. The unit isn’t producing enough hot water: If your showers are shorter than usual or dishes aren’t getting as clean as they used to, it could mean that your water heater isn’t able to produce enough hot water. Sediment buildup in the tank and a faulty heating element can cause this.

4. The unit takes too long to heat up: If it seems like your water heater is taking longer and longer to produce hot water, it could be a sign that the heating element is failing. This problem usually comes with other issues, such as the unit not making enough hot water or strange noises from the unit.

5. The water isn’t as hot as it used to be: If you notice that the water coming out of taps is not as hot as it used to be, it can mean that the heating element in your water heater is starting to fail. This problem comes with other issues, such as the unit taking longer to heat up or not producing enough hot water.

Also Read: How To Get More Hot Water From Your Water Heater

How Much Does It Cost to Install a New Water Heater?

Type of Water Heater

Installation Cost (Average)Annual Cost (Average)LifespanEfficiency Factor (EF)




8-12 years





8-12 years





20 years





8-12 years





15-20 years





15-20 years


Hybrid Heat Pump



8-12 years



How can I choose the correct size water heater for my home?

When shopping for a water heater, you need to consider the size of your home and how many people will use the hot water. You can follow the chart below:

People in Household

Tank (gallons)

Tankless* (gallons per minute)













Water Heater Installation Cost by Type

Type of Water HeaterUnit Price RangeInstallation Cost Range
Tank$600 – $800$900 – $2,500
Tankless$600 – $1,500$1,000 – $3,500
GasVaries$500 – $2,500
Electric$500+$500 – $3,500
Direct VentVaries$500 – $1,000
Power VentVaries$500 – $1,000

Please note that the unit price range can vary depending on the size and specific features of the water heater. Installation costs also depend on factors such as the type of water heater, any additional work needed, and local labor rates.

These cost estimates provide a general overview and may vary based on your location and specific installation requirements. Obtaining quotes from local professionals for more accurate pricing information is advisable.

Factors that affect the cost

Several factors can influence the cost of purchasing and installing a water heater. Understanding these factors can help you budget more accurately and make informed decisions when choosing the right water heater for your needs. Here are the key factors that affect the cost:

  1. Type of Water Heater: The choice between tank and tankless water heaters significantly impacts costs. Tankless heaters are generally more expensive upfront due to their technology.
  2. Size and Capacity: The size or capacity of the water heater is a major cost factor. Larger units capable of holding more water tend to cost more.
  3. Energy Source: Gas water heaters are usually less expensive but may require a natural gas line or propane supply. Electric heaters, on the other hand, can have higher operational costs.
  4. Efficiency Rating: Water heaters with higher energy efficiency ratings (like Energy Star certification) may cost more upfront but can result in long-term energy savings.
  5. Installation Location: Installation costs can vary based on where the water heater will be placed. Replacing an old unit with the same type in the same location is often less expensive than changing types or moving the heater to a different location.
  6. Venting Requirements: Depending on the type of water heater, it may require specific venting options. Installation costs may increase if additional venting work is needed.
  7. Local Labor Rates: Labor costs for installation can vary widely by location and the complexity of the installation. Higher labor rates in some areas can contribute to increased costs.
  8. Additional Plumbing Work: If your plumbing system needs modifications or upgrades to accommodate the new water heater, this can add to the installation cost.
  9. Permits and Inspections: Obtaining permits and undergoing inspections as required by local building codes can add expenses to the installation process.
  10. Warranty and Brand: Higher-quality brands and models with longer warranties may come with a higher initial price tag.
  11. Water Quality: In areas with hard water or water quality issues, you may need to consider water softeners or additional filtration, which can add to the overall cost.
  12. Maintenance and Repairs: Factor in ongoing maintenance and potential repair costs over the water heater’s lifespan.
  13. Energy Costs: Consider the long-term energy costs associated with the type of water heater you choose. Gas heaters are often more cost-effective but may have a higher upfront cost.
  14. Incentives and Rebates: Some regions offer incentives or rebates for choosing energy-efficient water heaters, which can offset the initial cost.

When selecting a water heater, it’s essential to assess your specific needs and circumstances. While upfront costs are a consideration, they also factor in long-term operational costs and the potential for energy savings with more efficient models. Additionally, obtain quotes from qualified professionals in your area to better understand the total cost, including installation.

You May Also Like: Replace Anode Rod in Water Heater

How can I extend the life of my water heater?

You can do a few things to extend your water heater’s life.

1. Check the anode rod: The anode rod is a metal rod that helps protect the inside of your water heater from corrosion. Over time, the anode rod will rust.

2. Flush the tank: You should flush your water heater tank every few months to remove any sediment that has built up. Which will help improve efficiency and extend the life of your water heater.

3. Adjust the thermostat: You can save energy and extend the life of your water heater by simply adjusting the thermostat to a lower setting (120 degrees Fahrenheit).

4. Inspect for leaks: Regularly inspect your water heater for any signs of leaks or other damage. If you find any damage, try to repair it as soon as possible.

How often should I replace a water heater?

The lifespan of a water heater can vary depending on several factors, including the type of water heater, the quality of installation, maintenance, and the local water quality. Here are some general guidelines for when you should consider replacing a water heater:

Conventional Tank Water Heaters:

Typically, tank-style water heaters have a lifespan of around 8 to 12 years. However, with proper maintenance, they can sometimes last longer. Signs that it’s time for replacement include rust or corrosion on the tank, frequent leaks, decreased hot water supply, or unusual noises.

Tankless Water Heaters:

Tankless water heaters tend to have a longer lifespan, often around 20 years or more. This is because they do not store water and are subject to less wear and tear. Signs for replacement may include a drop in water temperature, reduced flow rate, or if the unit is no longer efficient.

Gas vs. Electric Heaters:

Gas water heaters typically have a shorter lifespan than electric ones, often around 8 to 10 years. This is because the combustion process can lead to more wear on the tank. Electric water heaters can last longer, with a typical lifespan of 10 to 15 years.

Quality and Maintenance:

The quality of the water heater and its installation can significantly affect its lifespan. Higher-quality units and professional installations tend to last longer. Regular maintenance, such as flushing the tank, checking the anode rod, and inspecting for leaks, can extend the life of a water heater.

Who should I call if I have a problem with my water heater?

If you have any problem with the water heater, it’s crucial to call the right person. Depending on the situation, you need to call a plumber, an electrician, or an HVAC technician.

Here are some suggestions on whom you can call if you have a problem with your water heater:

– Plumbers: If you have a plumbing problem, call a plumber.

– Electricians: If you have an electrical problem, call an electrician.

– HVAC technicians: If you have a heating or cooling problem, call an HVAC technician.

Frequently Asked Questions

1. Can I install a water heater myself?

Yes, you can if you are comfortable with basic plumbing skills. However, you will need to purchase an electric water heater, which may require professional installation.

2. Does installing a water heater by yourself void the warranty?

 Installing a water heater can void the manufacturer’s warranty if it doesn’t meet safety standards. However, exceptions exist, such as when installing an electric water heater.

3. Is it better to have the water heater inside or outside?

Having the water heater inside your home can be dangerous if there are cracks in the walls or other areas where cold air could leak into your house. If you install an outdoor unit, ensure it has proper ventilation and protects it from extreme heat.

4. Do tankless water heaters save space?

Yes, they do. These water heaters are a great choice for saving space because they only require hot water when needed. They also help reduce energy consumption because there is no need to store hot water.

5. What type of water heater is most energy-efficient?

It depends upon the size of your home and how much hot water you use. If you want to save money, you can consider replacing an older tankless water heater with a larger capacity.


Water heaters are essential in our lives, and it’s not always easy when they break down. Not only do we have to go without hot water, but we may also have to deal with expensive repairs. That’s why it’s essential to properly maintain your water heater and be aware of the replacement cost. We hope our article seems helpful to you.


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