How Much Does It Cost To Replace A Hot Water Heater?

Average new tank water heater cost

There are several options for hot water heaters on the market these days, but the standard tank water heaters are pretty efficient. They’re also the most cost-conscious choice, and many homeowners will opt to replace an older model with this standard option. 

Unless you're a licensed plumber, installing a hot water heater is a task best left to the pros. To pass a home inspection, you must meet specific requirements – and mistakes can be costly. The average cost of installing a hot water heater, including materials and labor, is anywhere from $400 to $1,000.

Water heater installation cost by brands

As with many home appliances, there is a wide price range. Some of this comes down to longevity and durability, but there are also considerations tied to brand names. Below, we’ll go through the three most popular brands for both tank and tankless water heaters so that you can compare costs. 

Tank water heaters:

• Bradford White: $600 to $850.
• Rheem: $325 to $500.
• AO Smith: $325 to $499.

Tankless water heaters:

• EcoSmart Electric: $400 to $599.
• Stiebel Eltron: $750 to $900.
• AO Smith: $800 to $999.

Remember that the costs above are for materials only; the labor cost to install a water heater is additional.

Water heater cost by size

When it comes to hot water heaters, bigger isn’t always better. The size of your water heater must be proportional to the number of people in your home and the amount of water you use. A large water heater will cost you more money – both in the upfront cost and long-term operation. 

Going by the number of people in your home is an excellent way to get an idea of the size of the hot water heater you’ll need. Here’s a quick list for reference:

• 1 to 2 people: 23 to 40-gallon tank.
• 2 to 3 people: 35 to 50-gallon tank.
• 3 to 4 people: 46 to 60-gallon tank.
• 5 or more: 55 to 80-gallon tank.

Cost to replace hot water heater

On average, it costs between $300 and $800 for materials and labor to replace a hot water heater. If you want to cut back on the labor cost to install a water heater, there are a few things you can do on your own. 

Removing and disposing of your old water heater will save you labor and fees. Most homeowners with some DIY skills and essential tools can do this relatively easily. Once you install your new hot water heater, you can also save on your utility bill by insulating it. 

If you’re comfortable with home repairs, you can replace a tank hot water heater on your own. This could save you a few hundred dollars in labor, but it’s important to ensure that you can confidently install your new appliance. Otherwise, you might risk your heater leaking if not installed correctly.

If you do choose to hire a professional, there may be costs associated with removing your water heater so a new one can be put in place as well. You can reduce these costs by doing this job on your own if you are capable.

Labor cost to install water heater

You can expect to pay anywhere from $45 to $150 per hour in terms of labor costs. The difference in price comes down to the type of hot water heater you have. The labor cost to install a gas water heater, or a solar system, is more than a standard electric hot water heater.

Average tankless water heater cost

Tankless hot water heaters, also referred to as on-demand hot water systems, offer a few notable benefits over standard tank hot water heaters. You can expect the upfront cost for a tankless hot water heater to be more than standard models, averaging between $1,400 and $2,800 for parts and labor.

In addition to having more hot water available, meaning no cold showers, you’ll also enjoy other benefits of a tankless hot water heater. Many of the main panels are mounted on exterior walls, meaning that there’s no bulky tank taking up storage space. Additionally, tankless systems use less energy, so you’ll see a reduction on your utility bills. 

Tankless water heater sizing

Tankless hot water heaters are measured by how many gallons per minute they can heat. While you might be able to get by with a model that heats two to five gallons per minute, it’s worth considering an upgrade to a model that can heat 7.5 to 11 gallons per minute. That means you don’t have to worry about running out of hot water if more than one person is showering simultaneously or you’re running multiple appliances that use hot water.

Electric vs. gas water heater replacement cost

Once you’ve decided on a tank versus tankless hot water heater, there’s another critical decision to make – what type of energy source will work best for you. This is where you’ll want to weigh the gas water heater replacement cost compared to your other options. Overall, tank hot water heaters are the least expensive. That’s why electric tank water heaters are the most const-conscious choice. 

You might think tankless gas heaters are costly, but tankless electric models are the high-end option. While tankless electric models are more expensive up front, they’ll cost you less to run long-term. Below is a breakdown of the cost categories:

• Electric tank water heaters: $700 to $850 cost – $6,700 over 13 to 15 years.
• Gas tank water heaters: $800 to $950 cost – $5,400 over 13 to 15 years.
• Gas tankless water heaters: $1,500 to $1,750 cost – $4,500 to $4,700 over 13 to 15 years.
• Electric tankless water heaters: $1,500 to $1,800 cost – $4,000 to $,4300 over 13 to 15 years.

The labor cost to install a gas water heater is also likely to be higher than an electric tank water heater since a gasfitter will need to certify the safety of the installation.

Propane and solar water heaters

If you’re trying to stay off-grid, there are a couple of options for ensuring that your water is toasty warm. Propane and solar water heaters are less common but quite energy efficient. Certain gas water heaters can also be converted to run on propane. 

You can expect a propane water heater to come in anywhere from $1,800 to $2,700 for a complete installation, and a solar water heater costs between $4,500 to $7,500.

Additional costs and considerations

For the most part, replacing a hot water heater is a relatively simple home maintenance project. A few factors to keep in mind could increase your costs, so beware of these below variables:

• Removal: You can expect to pay anywhere from $200 to $500 for the removal or disposal of an old model.
• Permits: In certain areas, you may need to acquire permits to install a water heater in your home. It is more common in new builds than in replacing an existing model. Expect an additional $200 to $400 if your project does require permits.
• Warranty: A standard warranty should last over 10 years and may include regular maintenance and repairs. Since your home's hot water heater is essential, investing in a warranty is a wise choice.