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How Much Does Water Heater Replacement Cost?

Bob Vila logo Bob Vila 2/22/2021 Katie Flannery

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  • Typical Range: $811 to $1,566
  • National Average: $1,176

A water heater is an important home appliance that is relied on to provide hot water for bathing, cleaning, and cooking. When it stops working properly and the time comes to replace it, the average water heater replacement cost can run from anywhere from $811 to $1,566, with the national average around $1,176, 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 $800. 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 $200 per hour, and an electrician can run from $50 to $100 an hour.

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Factors in Calculating Water Heater Replacement Cost

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Replacing a water heater usually ranges from $811 to $1,566, with an average cost of $1,176 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 water heater replacement cost due to the climate and fuel prices.

Tank vs. Tankless

Water heaters come in two main styles: tank style and tankless. A 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. Tankless water heaters usually cost two to three times more than tank-style heaters. They’re more difficult to install and will cost more in labor. The primary advantage of tankless water heaters is that they supply an endless amount of hot water with a series of super-heated coils.

The average cost, including labor and materials, for tank-style water heaters runs from $700 to $2,000. They usually last between eight and 15 years, and they can run on gas, propane, electricity, and 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 $1,000 to $3,000, and a tankless water heater can last more than 20 years. These water heaters can run on gas, electric, and propane and take considerably longer to install—sometimes up to 10 hours. Tankless heaters are smaller and take up less space, but they are expensive to install. They’re not ideal for homes in colder climates, and larger homes may need multiple units to provide adequate hot water.

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. Local fuel prices should be taken into consideration when deciding on what type of water heater would work the best in your home.

Location of System

The location of the water heater within the home can also impact water heater replacement cost. 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, the location of the water heater is important so that if it does leak, it won’t cause significant damage to the home.

Size

How much you’ll pay for a 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 if you have more than a five-person household, a 60- to 80-gallon tank would work much better. A 30-gallon tank-style water heater runs approximately $270 to $900, and an 80-gallon tank ranges from $1,000 to $3,000.

Type

All types of water heaters use either natural gas or electricity. On average, a natural gas water heater costs $100 to $200 more than electric heaters. The heating is provided by an electrical coil or by a gas pilot light. Even though natural gas water heaters cost more and they’re not incredibly energy efficient, the high price of electricity makes the natural gas option the most cost-effective in the long run. Electric water heaters may work the best for small apartments or extremely confined areas since they don’t need venting.

Venting System

Water heaters can be vented in two ways: direct vent or power vent. A direct vent heater expels exhaust gases out an exhaust pipe or chimney above the unit. This type of unit can add $500 to $1,000 to the overall water heater replacement cost if one decides to convert from electric to gas. A power vent heater has a fan or a blower that pushes gases out of the home. This type of heater can add $300 to $600 to the price and an extra $300 to $500 for wiring and electrical work.

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.

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Additional Costs and Considerations

When budgeting for water heater replacement cost, there are usually additional cost factors and considerations. 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.

Warranty

Both tank-style and tankless water heater units usually come with a warranty that averages eight to 12 years. If you would like to extend the coverage on the heater, it may cost extra.

Removal of Existing Water Heater

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, prepare 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 and the extent of the work needed for the installation. The average permit price is $50 to $500. You can pull the permit yourself 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 $1,000, and gas line addition prices can total anywhere from $250 to $800. The costs can really start to add up if you need to extend the gas line to reach the location of the water heater.

Electrical Work

Electrical wiring fees can cost between $500 and $1,500 on average. If you’re interested in converting from a gas water heater to an electric heater, it can be an additional $200 to $500 or more. 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 $500 to $700.

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 you’ve decided to move the location of the water heater, it will be more expensive to add plumbing.

Converting Fuel Sources

Converting from gas to electric or vice versa can tack on additional costs. Altering the fuel source usually involves adding electrical wiring, water line installation, and the addition of gas lines. Hiring a plumber and an electrician is necessary if this is part of the water heater replacement plan.

Expansion Tanks

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 from $40 to $350.

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Water Heater Replacement Cost: Types of Water Heaters

Water heater replacement cost can vary depending on the type of heater. Several types of heaters can be installed, including standard tank-style and tankless heaters. Homeowners should consider all their options before deciding on which type of water heater to purchase.

Gas

A big decision to make is whether to install a gas or an electric water heater. Both tank-style and tankless water heaters can be powered by gas or electric. Gas water heaters tend to be more expensive but will save you money in the long run due to the overall expensive cost of electricity. They usually 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 $250 to $1,800.

Electricity

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 $200 to $2,880 on average.

Propane-Powered

Propane-powered water heaters are more expensive than natural gas or electric heaters. These units can run upward of $1,000 to $3,000, not including labor. Propane water heaters offer an alternative to natural gas for rural and off-the-grid homes.

Oil-Fired

Oil-fired water heaters cost approximately $1,000 to $3,000, not including labor. These types of water heaters are also popular with homeowners that are looking for a substitute for natural gas or electric-powered water heaters.

High Efficiency

High-efficiency water heaters cost an average of $1,000 to $3,000, 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 you can buy and install. The average cost for a solar water heater is between $1,800 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

Hybrid heat pump water heaters average $1,200 to $3,500, including materials and labor. They’re one of the most efficient water heaters, and they work by using a heat pump to pull the heat out of the surrounding environment and transfer it to the water by way of coils and a compressor. They heat the water without using a lot of energy, but they are large and expensive units and are not recommended for apartments or small homes.

Water Heater Replacement Cost: Do I Need a New Water Heater?

It’s easy to not pay attention to a water heater: out of sight, out of mind. Keeping an eye on the condition of your water heater will let you quickly notice 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 Water or Water With Metallic Taste

If the water coming out of the tap is rusty or has a metallic taste to it, that means the anode inside the heater has failed and the water heater is rusting and corroding.

Loud Noises

Loud noises such as pops, cracks, and bangs are signs that the heating element is failing.

Leaks

A leaking water heater indicates that there is a major internal failure. The power to the system needs to be turned off, and the heater needs to completely cool before it’s replaced.

Water Is Not Hot Enough

If the water coming out of the heater isn’t hot enough, this is a sign that there is a problem with the main heating element.

High Energy Bills

If your utility bill is unusually high, this may be a sign of an inefficient water heater. Tank-style heaters usually run for around four hours a day. If you notice that your water heater is running more than usual, it may need to be replaced.

Existing Water Heater’s Age

The expected lifespan of a tank-style water heater is around eight to 15 years, and a tankless unit can last up to 20 years or more. Knowing how long a water heater will last can help you prepare for the cost of repairs and replacement.

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Water Heater Replacement Cost: DIY vs. Hiring a Professional

While it may be tempting to save some money by replacing a water heater on your own, this is a project that’s best left to the professionals unless you are 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 plumber. 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 your home, has access to the best brands and models that are only available to professional installers, will handle the permit for you, and will install a new water heater correctly and safely the first time. When it comes time to replace a water heater, get in touch with a professional—that way you can be sure the job has been done right and everything is up to code.

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How to Save Money on Water Heater Replacement Cost

Replacing a water heater 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 you’d like in a 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 up to 100-gallon tank sizes. The most common size is a 40- to 80-gallon tank. It’s recommended to 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 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 your overall budget. Some water heaters cost more up front and save money down the road. Consider the overall cost, and choose what’s best for you.
  • Rebates, special offers, and tax credits. Utility companies offer rebates and special offers associated with large appliances and water heater replacement. Homeowners that use a gas water heater that is recognized as Energy Star Most Efficient meet the requirements of a $150 tax credit. Energy Star provides a comprehensive rebate finder list, available by zip code, of other money-saving offers.
  • Shop around. Get multiple quotes from a few different plumbers, and compare installation and labor costs.

Questions to Ask About Water Heater Replacement Cost

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 the water heater replacement before the project.

  • 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 and keeping the overall water heater replacement cost down can be a daunting process. Here are some frequently asked questions about water heater replacement to help guide you in your 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 $700 to $2,000, 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 eight to 15 years, and a tankless unit has at least a 20-year lifespan.

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 building codes. Due to the required labor and intensive knowledge required, hiring a professional is safer, and it will avoid any potential hazards that come from working on gas lines or doing electrical work.

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