By Otis 
Introduction
Tankless water heaters are the first choice for homeowners who want to save energy, have unlimited hot water and improve their efficiency. The first question is How much does a tankless heater cost?
Budgeting is easier when you know the cost to install a tankless water heater and the installation fee. This guide will help you calculate the cost of installing a tankless gas or electric water heater based on industry estimates.
What is a Tankless water heater?
Tankless water heaters heat water only as needed. The unit does not store pre-heated hot water in a storage tank. Instead, it warms the water as it passes through. This provides constant hot water with no standby energy losses.
This system is more energy efficient, takes up less space and has lower operating costs.
Why homeowners choose tankless systems
Tankless water heaters are popular among owners because:
∙ The boilers provide unlimited hot water to multiple showers, appliances and other devices.
∙ By eliminating the tank standby heater, they reduce their monthly energy consumption.
∙ The tanks require less room than conventional tank systems.
∙ These heaters have a longer life span compared to storage tanks.
∙ These systems are perfect for new construction or remodels.
The upfront cost may be higher despite the advantages, especially if additional venting is required, electrical upgrades or improvements to the gas supply are needed.
Tankless water heaters
- Electric Tankless Water Heater
Installing electric tankless water heaters is generally simpler and cheaper. These heaters are best suited to smaller homes and places where venting may not be possible, providing endless hot water.
- Gas Tankless Water Heater with Propane or Natural Gas
The higher flow rate of gas tankless units makes them a better choice for families with multiple bathrooms or larger families.
Installation prices are typically higher due to the venting requirements or possible upgrades of gas lines.
Cost of Tankless Water Heaters — A Breakdown
Unit Cost
Based on data from the industry
∙ Electric tankless heaters can cost between $170 and $800.
∙ The price for gas tankless water heaters is around $230 to $2300. Many premium models are priced between $1,000 and $2,000, depending on the flow rate in gallons per minute, features, etc.
Installation cost
The cost of installation can vary widely.
∙ Electric tankless installation: Typically $650-$2,500, depending on electrical panel capacity and home setup, which can affect the overall tankless water heater installation cost.
∙ Gas tankless installation: Generally $1,600-$5,600, including venting, gas line work, and labour.
Installation costs can be significantly higher if you need major upgrades to your home (gas, venting or electrical).
Total installed cost
Summary of all Estimates
∙ Total cost of electric tankless installation: $1400-$3,000
∙ Total for gas tankless installations: $ 2,100 – $5,600
∙ Complex installations may exceed $5,000-$7,000+
Factors that Influence the Installation Cost
Your final cost is affected by several factors:
∙ Fuel type (electric vs. gas vs. propane)
∙ Upgrades to electrical systems or gas lines are required
∙ Venting configuration
∙ Plumbing repairs
∙ Fees for inspection and permits
∙ Heater size and flow rate
∙ Water hardness (scale accumulation may require a softener).
Tankless Water Heaters Pros and Cons
Pros
∙ Never-ending hot water
∙ Energy costs are lower over the long term
∙ Space-saving design
∙ Longer lifespan
∙ Reduced Standby Energy Loss
Cons
∙ Costs upfront are higher when you choose to install a tankless water heater, but the energy savings can be significant.
∙ Installation may require home upgrades
∙ Gas models need venting
∙ In areas with hard water, a water softener is needed.
∙ High simultaneous demand requires larger units.
Important Note
The cost of a tankless system is higher, especially for the installation. Before choosing a water heater, consider your household’s size, hot-water demand and home infrastructure.
FAQ
Q1: How much does it cost to install a water heater without a tank? Electric systems cost between $1,400 and $3,000, while gas systems cost from $2,100 to $5,600, depending on the venting work and gas line.
Why are gas installations more expensive?
Gas systems require more labour and upgrades to the gas supply.
Q3 – Is it cheaper to install electric tanks?
Yes — electric tankless systems require no venting, and therefore less labour. Q4: Do tankless systems reduce energy costs?
Yes. The system heats water only when it is needed. This reduces standby losses and saves energy over time.
Conclusion
It can be a wise long-term deal to upgrade to a tankless heater, but you should understand the total cost involved before moving to a tankless system. Installation, upgrades, and the type system you select all affect the overall cost.
The best gas tankless water heaters are usually for big homes with high hot water demands and higher flow rates. Electric models are often more accessible and easy to install for smaller households or those with a limited demand for warm water.