How Much Does Water Heater Replacement Cost?

A water heater is an essential home appliance. When the time comes to install a new one, the average water heater replacement cost ranges from $810 to $1,656, with the national average at $1,217.

By Katie Flannery and Evelyn Auer | Updated Aug 26, 2022 3:52 PM



Water Heater Replacement Cost

Water Heater Replacement Cost

A water heater is a vital home appliance that homeowners rely on to provide hot water for bathing, cleaning, and cooking. According to Angi and HomeAdvisor, the average water heater replacement cost can range from $810 to $1,656, with the national average around $1,217, depending on the type and size of the water heater. The different types of water heaters include standard tank storage, tankless, hybrid or high-efficiency, and solar. Installation and labor costs will also affect the overall price of water heater replacement. Labor costs to install a standard replacement water heater usually run from $150 to $450, but this cost can rise to $2,500 to convert from a water heater with a tank to a tankless model. Most plumbers will quote a flat rate that includes materials and labor, but some may charge by the hour. Hiring a plumber will cost anywhere from $45 to $150 per hour, and the cost of an electrician can run from $50 to $100 an hour.

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Factors in Calculating Water Heater Replacement Cost

Calculating Water Heater Replacement Cost

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The cost of water heater replacement usually ranges from $810 to $1,656, with an average cost of $1,217 if the water heater is replaced with the same style and size. Other factors that affect the overall water heater replacement cost can include permit fees and carpentry work, which can add $50 to $1,500 or more to the overall project cost. The type of water heater will also affect the price as will the location of the water heater within the home, size, type of ventilation system, and materials. The geographic location of the home can also affect the cost to replace a water heater due to the climate and fuel prices.

Tank vs. Tankless Unit

Water heaters come in two main styles: storage tank and tankless water heaters. A storage tank water heater stores hot water in a large tank that typically holds anywhere from 30 to 80 gallons. More than 90 percent of water heaters installed in the United States are tank-style heaters. A tankless water heater costs two to three times more than tank-style water heaters. This type is more difficult to install and will therefore have higher labor costs. Tankless water heaters produce hot water on demand by heating water as it enters the unit.

The average cost, including labor and materials, for tank-style water heaters runs from $650 to $2,500. They usually last between 8 and 12 years, and they can run on gas, propane, electricity, or solar power. They’re relatively easy to install, but they take up a lot of space and they’re always on, which uses up a lot of energy. Tankless water heater costs can range from $1,200 to $3,500, and a tankless water heater can last more than 20 years. These water heaters can run on gas or electric and take longer to install—usually 2 to 3 hours on average. Tankless heaters are smaller and take up less space, but they are more expensive to install. They’re not ideal for homes in colder climates, and larger homes may need multiple units to provide adequate hot water.

Unit Size

How much a homeowner will pay for a hot water heater replacement also depends on the size of the water heater. Tank-style heaters can range in size from 20 to upward of 100 gallons of storage, but a 40-gallon tank size is the most common. A 40-gallon tank is sufficient for a two-person household, but for a household with more than five people, a 60- to 80-gallon tank may be more suitable. Here is a breakdown of water heater costs based on size:

  • 30-gallon tank: $550 to $2,100
  • 40-gallon tank: $550 to $2,350
  • 50-gallon tank: $650 to $2,400
  • 75-gallon tank: $1,250 to $3,500
  • 80-gallon tank: $1,350 to $3,500

Unit Type

Most types of water heaters use either natural gas or electricity. The heating is provided by either an electrical coil or by a gas pilot light. On average, a natural gas water heater replacement costs $600 to $2,700, while an electric heater replacement costs $600 to $3,500. Even though natural gas water heaters cost more and are not incredibly energy efficient, the high price of electricity often makes natural gas the most cost effective option in the long run. Electric water heaters may work the best for small apartments or extremely confined areas since they don’t need venting. Choosing between electric and gas water heaters can help homeowners come up with a cost range for their water heater replacement.

Homeowners can also choose between propane-powered, indirect, solar-powered, high-efficiency, and hybrid heat pump water heaters. Deciding on how to choose from among the best water heaters will be influenced by a number of factors. Each type of water heater is discussed in more detail in a section below.

Unit Brand

The cost of a replacement water heater can also depend on the brand chosen. As with other products, some brands have a lower price point, while others are more expensive. Here are some popular water heater brands and their price ranges.

Venting System

Water heater venting happens in one of two ways: direct vent or power vent. A direct vent heater expels exhaust gases through an exhaust pipe or chimney above the unit. This type of unit can cost between $350 and $4,000, including installation.

A power vent heater has a fan or a blower that pushes gases out of the home. This type of heater averages a much higher cost of $1,050 to $5,000 because the installation will also include wiring and electrical work.

System Location

The location of the water heater within the home can also impact the cost to replace hot water heaters. If the water heater is in a difficult-to-reach place in an attic or basement, or if the installers will have to carry a water heater up or down multiple flights of stairs, additional costs may be added to the installation price. Because there is always the risk of a water heater springing a leak, it’s important that the water heater is located somewhere it won’t cause significant damage to the home if it does leak.

Labor

The cost of labor to install a replacement water heater is typically calculated in hours. For example, a plumber will charge an average of $45 to $200 per hour, depending on the labor costs in the area and the plumber’s experience level. An electrician costs an average of $50 to $100 per hour. In total, a standard water heater installation will cost between $150 and $450 in labor, though that cost rises to $600 to $1,850 when the job involves installing a tankless water heater. Homeowners who want to convert a tank water heater to a tankless one will spend up to $2,500.

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Materials

The materials used to install a water heater can include discharge pipes, fittings, pipe thread compound, pressure release valves, solder, venting pipes and connectors, water and gas piping, and more. These items can increase the water heater replacement cost, depending on the exact materials needed for the job.

Geographic Location

The geographic location of the home impacts the overall cost of fuel prices and water heater replacement cost. Depending on where the water heater is located within the home, the climate can affect energy use and the temperature of the water entering the heater. The colder the water is when it enters the heater, the more energy is needed to heat it to the desired temperature. On the high end, water heater replacement in San Francisco typically runs between $1,150 and $2,100. In Chicago, on the other hand, costs are typically between $800 and $1,400. Homeowners will also want to take local fuel prices into consideration when deciding on what type of water heater would work the best in their home.

Additional Costs of Water Heater Replacement

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Additional Costs and Considerations

When budgeting for water heater replacement cost, there are usually additional cost factors and considerations for homeowners to keep in mind. Labor costs for installing a standard water heater range from $150 to $800. Labor costs can vary due to the size and type of water heater and the location of the installation. Additional costs can include an extended warranty, removal and disposal of the old water heater, permits, the installation of water and gas lines, plumbing, electrical or carpentry work, fuel conversions, and expansion tanks.

Warranties

Both tank-style and tankless water heater units usually come with a warranty that averages between 8 and 12 years. The warranty may cost extra if homeowners choose to extend the coverage time frame. If the old unit is still under warranty and can’t be repaired, its replacement may be covered.

Many home warranties also include water heater repairs or replacement. Keep in mind that warranties may be voided if the unit has not been maintained with regular service. Some plumbers will also offer a warranty for their work, and this may cover repairs not included in the manufacturer’s warranty.

Existing Water Heater Removal

The cost of removing the old water heater can range from $100 to $500, depending on the hourly rate of the contractor and the size and location of the unit. If the heater is difficult to access, homeowners may have to pay more for the removal of the existing water heater.

Permits

Permits for water heater replacement can range from $100 to $1,500, depending on the type of water heater being installed and the extent of the work needed for the installation. Homeowners can pull the permit themselves or have the contractor do it and have the price added to the overall bill.

Water and Gas Line Installations

Converting from one fuel source to another can run up the water heater replacement cost. Water line installation costs can range from $350 to $1,900, and gas line addition prices can total anywhere from $275 to $825. The costs can really start to add up if it’s necessary to extend the gas line to reach the location of the water heater.

Electrical Work

Electrical wiring fees can cost between $50 and $100 per hour on average. It can cost an additional $200 to $500 or more to convert from a gas water heater to an electric heater. Electric heaters require their own dedicated circuit and cannot be put on an existing line.

Carpentry Work

When installing a new water heater, a new wall may need to be framed, an open area may need to be enclosed, or an enclosed area opened up. The average price for framing a wall is $200 to $400, and drywall installation can run from $1,000 to $2,900.

Plumbing Replacement

An important factor to keep in mind during a water heater replacement is the current state of the plumbing. If pipes need to be replaced or the water heater is being moved to a different location, the overall project cost will likely be higher.

Fuel Source Conversion

Converting from gas to electric or vice versa can tack on additional costs. Altering the fuel source usually involves adding gas lines, adding electrical wiring, and water line installation. Hiring a plumber and an electrician is necessary if this is part of the water heater replacement plan. To add electrical wiring, homeowners can expect to pay between $550 and $2,300. Adding a water line will cost between $350 and $1,900, and a gas line addition will range from $275 to $825.

Expansion Tank Installation

An expansion tank provides additional space for water that expands as it heats. Many modern building codes require an expansion tank to be installed when replacing an old water heater. Pipes may burst when the pressure builds as the water heats. These tanks can range in price from $40 to $350.

Types of Water Heaters

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Replacement Cost by Type of Water Heater

Water heater replacement cost can vary depending on the type of heater. A choice of several types of heaters can be installed, including standard tank-style and tankless heaters. When determining how to choose a water heater, homeowners should consider all their options before deciding on the type of water heater to purchase.

Gas

Gas water heaters tend to be more expensive but will save homeowners money in the long run due to the typically higher cost of electricity. They tend to heat water quickly, and they come in energy-efficient models. Gas water heaters work when the power goes out, but there are always safety issues associated with a gas-powered heater. The average price of a gas water heater can range from $600 to $2,700.

Electric

Electric water heaters are cheaper to install but will cost more to run, depending on local electricity prices. An electric water heater will not work during a power outage, and it generally does not heat water as quickly as a gas-powered heater. These types of water heaters do have fewer safety concerns and require less maintenance. An electric water heater can run between $600 to $3,500 on average.

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Propane

Propane-powered water heaters are more expensive than natural gas or electric heaters. These units can run upward of $700 to $2,500 including labor. Propane water heaters offer an alternative to natural gas for rural and off-the-grid homes.

Indirect

Indirect water heaters use a coil inside the tank to heat the water in a very efficient way. This type of water heater costs an average of $1,200 to $3,500.

High Efficiency

High-efficiency water heaters cost an average of $1,500 to $3,300, including labor. They’re considered 100 to 300 percent more efficient than conventional water heaters. They use a mixture of better insulation, smart controls with leak detection and protection, heat pumps, and plastic tanks to create better energy efficiency.

Solar

A solar water heater takes its power from the sun to heat the water. Solar water heaters come in different sizes and types and are typically one of the most expensive water heaters available. The average cost for a solar water heater is between $1,700 to $5,500, but the cost can soar up to $13,000 or more. They save money in the long run by using a renewable and eco-friendly energy source, and some homeowners have supplemented a conventional water heater with a solar-powered one.

Hybrid Heat Pump Water Heaters

What is a heat pump? A hybrid heat pump water heater works by pulling heat out of the surrounding environment and transferring it to the water using coils and a compressor. This type of water heater costs $1,200 to $3,500 on average, including materials and labor. Heat pump water heaters don’t use a lot of energy, but like the cost of a standard heat pump, a hybrid heat pump water heater is expensive. Additionally, these units tend to be large and are therefore not recommended for apartments or small homes.

Do I Need to Replace My Water Heater?

It’s easy to ignore the existence of a water heater: out of sight, out of mind. However, it’s important for homeowners to know when to replace a water heater. Keeping an eye on the condition of the water heater will quickly reveal any warning signs of a deteriorating heater. Sudden failure of a unit will prompt immediate replacement, but there are several red flags that signal a water heater is nearing the end of its life.

Rusty, Sandy, or Cloudy Water

In older water heaters, it’s common for sediment to build up on the inside of the tank, or for the unit to become corroded. When this is the case, hot water may come out rust-colored, gritty, or cloudy. This can sometimes be remedied by having the water heater descaled, but if the problem persists even after maintenance, a replacement may be necessary.

It’s also advisable to double-check that the problem is actually with the water heater and not another part of the home’s plumbing. A quick way to test whether the problem is specific to the water heater is to run cold water from the tap. If that water is also rusty or cloudy, the problem is likely not water-heater related.

Metallic-Tasting Water

If hot water has a metallic taste, this is an indication that metal from the tank is corroding and leaching into the water. Having the tank descaled could clear up the issue, but if the metallic taste is still present soon after maintenance it may be time to retire the old unit.

Excessive Noise

If a homeowner notices that the water heater is making noise, such as loud knocking or banging sounds, it usually means that the unit is in need of attention. The sound is caused by excess sediment buildup hitting the walls of the water heater tank before making its way into the water supply. Sediment buildup can also damage the water heater over time if not removed. Water heater repair costs much less than replacement, so it’s wise to investigate strange water heater noises sooner rather than later.

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Leaking

Leaking is a telltale sign that the water heater is failing. Years of heating and cooling wear out the unit over time, and the expansion can cause the metal to split. It may be possible to have the leak patched temporarily, but it will likely be necessary to replace the water heater in the near future.

Decreased Water Temperature

If it seems like water takes forever to warm up or is not reaching as high a temperature as it should, there may be an issue with the water heater’s heating elements. Sometimes a simple water heater element replacement can fix the problem. However, if outdated parts are needed or multiple parts are failing, it could be worth it to replace the water heater.

Increased Energy Bills

An increase in energy bills may mean that the water heater is working inefficiently. Occasionally, a quick thermostat reset can remedy the issue—on average, the temperature should be set somewhere between 120 and 140 degrees. If changing the temperature on the unit does not work, there may be a deeper problem.

Existing Water Heater’s Age

Like most appliances, water heaters wear out after a certain age. Water heaters are also becoming more advanced, and parts can become outdated and difficult to come by over time. Basic tank water heaters can be expected to last between 8 and 12 years, and tankless heaters have a longer lifespan of 20 years. If the unit is at least 8 years old and is exhibiting any of the above signs of failure, it’s likely that a replacement will be necessary soon.

Water Heater Replacement Cost: DIY vs. Hiring a Professional

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Water Heater Replacement: DIY vs. Hiring a Professional

While it may be tempting for homeowners to search online for “how to replace a water heater” and attempt the installation themselves, this is a project that’s best left to the professionals unless the homeowner is highly skilled with handling plumbing, gas lines, and electrical work. The intense labor and comprehensive knowledge of installing a water heater make this a job that’s best suited for a professional. Who fixes water heaters? Typically, homeowners will need to call a plumber to fix or replace their water heater. A water heater replacement project needs permits and inspections, and if anything goes wrong, the cost of cleanup, repairs, and updating an improper installation can skyrocket. A plumber can recommend the best water heater for the home, has access to a wide selection of the best brands and models, will handle obtaining the permit, and will install a new water heater correctly and safely the first time. When it comes time to replace a water heater, the best way to be sure the job has been done right and everything is up to code is to employ a professional to install the unit.

How to Save Money on Water Heater Replacement Cost

Hiring one of the best water heater repair services can be expensive, and the additional costs associated with installation can quickly add up. One way to save money is to replace the water heater with another of exactly the same size and type, but there are a few other ways to save money without compromising on the features homeowners want in their new water heater.

  • Consider size. Choosing the right size water heater can make a big difference in cost. Consider not only the number of gallons the tank holds but also the number of gallons the heater can supply per hour. Traditional tank-style water heaters come in 20-gallon to 100-gallon tank sizes. The most common size is a 40- to 80-gallon tank. It’s recommended that homeowners buy a water heater that fits the needs of the household and not get one that’s too big. Buying a unit that’s too large will result in the homeowner paying more for a larger heater and for the energy over the entire lifespan of the appliance.
  • Fuel type. The choice of natural gas, electric, or an alternative power source depends on the location of gas lines and the overall budget. Some water heaters have a higher initial cost but can save homeowners money down the road. Consider the overall cost, and weigh the pros and cons of each.
  • Rebates, special offers, and tax credits. Utility companies offer rebates and special offers associated with large appliances and water heater replacement. Homeowners who use a gas water heater that is recognized as Energy Star Most Efficient meet the requirements to receive a $150 tax credit. Energy Star provides a comprehensive rebate finder list of other money-saving offers, which is available by ZIP code.
  • Shop around. Get multiple quotes from a few different plumbers, and compare installation and labor costs.

Questions to Ask About Water Heater Replacement

Asking a plumber or professional water heater installer the right questions can help minimize miscommunication, save money, and get the desired results. Here are some questions to ask about water heater replacement when hiring a contractor.

  • Should I buy a tank-style or a tankless water heater?
  • What size tank do I need?
  • Will the water heater be energy efficient?
  • How long will the installation take?
  • Will you dispose of the old water heater?
  • What brands can I choose from?
  • Does the water heater have a warranty?
  • How much is the total cost?
  • Who will install the new unit?

FAQs

Choosing the best water heater replacement contractor and keeping the overall water heater replacement cost down can be a daunting process. Here are some frequently asked questions about hot water heater replacement to help guide homeowners in their decision.

Q. What is the cheapest water heater to install?

The most affordable water heater to install would be a standard tank-style unit. On average, the price of this type of water heater runs from $650 to $2,500, including materials and labor. Tankless water heaters can cost two to three times more than standard tank heaters.

Q. How long can I expect my water heater to last?

A tank-style water heater should last 8 to 15 years, and a tankless unit has at least a 20-year lifespan. Homeowners can extend the length of a water heater’s life by scheduling regular maintenance and replacing the unit’s anode rod, which protects the unit from corrosion and typically lasts around 5 years.

Q. Do I have to hire a professional to install a water heater?

It is recommended to hire a professional to install a new water heater. Professional water heater installation will ensure the heater is installed correctly and is up to current building codes. Because of the labor and extensive knowledge this project requires, hiring a professional is safer than DIY-ing the install, and it will avoid any potential hazards that come from working on gas lines or doing electrical work.

Q. How long does it take to install a new water heater?

In all, replacing a water heater with a unit of a similar design will take between 2 and 3 hours. If the old unit has a tank and the new unit is tankless, the process will take longer.

Q. What are some common signs of water heater failure?

Banging or knocking sounds coming from the unit, leaking, rusty or gritty hot water, and lack of hot water are all potential signs of water heater failure. Noticing these signs can help homeowners get ahead of the problem and replace the unit before it fails.

Sources: Angi, HomeAdvisor, Fixr, The Home Depot

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