As you take a hot shower in the morning, a new water heater cost is furthest from your mind. You probably don’t think too much about how that hot water is delivered. It just appears out of the faucet that way, and you’re happy. Until, of course, the hot water heater stops working and you’re left with a frigid showering experience. 

In that case, it’s probably time to look into the health of your water heater. New water heaters can be a large investment. It’s definitely worth looking into whether or not the device can be salvaged and repaired rather than replaced. 

Regardless of if you need a full replacement or quick repair, it’s important to understand the plumbing costs involved. In this guide, we’ll be covering everything there is to know about new water heater cost.

Understanding the Different Types of Water Heaters

There are several types of water heating systems to choose from, each with its own set of pros and cons. Here’s a quick breakdown of the most common types of water heaters on the market: 

Tank Heaters

The traditional tank water heater is the most common. It stores the heated water in a large tank until that water is needed. As the hot water is used, more water is heated and the tank is refilled. 

Tank heaters can be fueled by gas, electricity, or both (hybrid). Natural gas heating is the most expensive, but it’s also the most efficient. Regardless of the fuel type, this type of water heating system can last up to 15 years with proper care and maintenance. 

Tankless Heaters

Also called on-demand water heaters, tankless systems do not store water in a large tank. Instead, the water moves through a coil to heat up as it is needed. They’re more expensive, but these systems can last as long as 25 years. 

Point-of-Use Heaters

A point-of-use heater is a small heating solution that’s typically fixed to a kitchen sink or small shower space. If you want to increase your hot water output at a specific place in your home, this is a great option. 

Smart Heaters

The smart water heater hasn’t been around that long, but it’s definitely the most intelligent type of heating system. It’s typically tankless and connects to WiFi for preset temperatures and features. 

Because it’s a “smart” heater, it constantly monitors and adjusts temperatures for maximum efficiency and energy savings. It even cycles water to prevent and remove bacterial buildup within the system. 

Hybrid Heaters

A hybrid heater is the perfect combination of old and new technology. It uses the old-school tank-storing method combined with smart heating technology to save on energy costs. 

Installing this type of heater can be costly. The good news, though, is that you can save big on your utility bills while significantly reducing your carbon footprint. 

Average New Water Heater Cost (Replacement)

Your exact new water heater cost depends on a few things. First and foremost, the type of water heater you go for plays a major role. 

Traditional tank heaters heaters aren’t nearly as expensive as tankless units. You also need to consider the size and capacity, as well as the installation fees and necessary permits. 

Taking these factors into consideration, a new water heater can cost anywhere from $2,500 to $7,500. This is a wide range, so it’s important to sit down and weigh your options before selecting a new water heater.

When to Repair & When to Replace

Most water heaters are not designed for easy repairs. This is because they are built to last for a certain number of years. Once that lifespan is up, there’s not much that can be done. In most cases, it’s best to just invest in a brand-new system. 

In most cases, it’s more cost-effective to replace a water heater rather than repair one that’s not working improperly. Even if you pay for a repair, you’re likely to have to repair it again, and the cost of repairs adds up quickly.

A well-built heater from a reputable company should last around 15 years. If your heater is only a few years old, then it might be smart to simply repair it. But if it’s 10+ years old, it’s best to replace it altogether. 

Factors Affecting the Cost of a New Water Heater

As mentioned earlier, a new water heater can cost anywhere from $2,500 on the low end to $7,500 on the high end. So why is there such a wide range when it comes to pricing? 

Well, there are a lot of factors that can affect the cost of a new water heater, including: 

  • Type of water heater
  • Product model
  • Your location’s cost of living
  • Labor costs
  • Type of fuel used for heating
  • Permit costs
  • Disposal costs (for old water heater)
  • Installation complications (unforeseen costs)

Cost of Tank Vs Tankless Heaters

Now that you know the difference between tank vs tankless, let’s compare the costs of these common systems. 

A tank water heater is the most common, and affordability is a big reason for that. With a tank heating system, you can expect solid performance for 8 to 12 years. Depending on the model, you could pay anywhere from $900 to $2,500 for a brand-new system.

Because there is a large tank affixed to the heating system, it’s important to consider space requirements. The typical tank size ranges from 30 to 50 gallons, so you’ll need a good amount of space for installation.

What About Tankless Heaters?

Tankless heaters have a longer lifespan and can perform effectively for up to 20 years. The downside is the higher price tag. A new tankless heater will set you back about $3000 on average. 

The higher cost is all thanks to the tankless system’s more advanced technology. Hot water is heated on demand by a heated coil system, so there’s no need for a large-capacity tank. For this reason, tankless heaters are better for small spaces. 

If a tankless water heater is for you, the next step is to decide between condensing vs non-condensing. Condensing water heaters are more efficient because they constantly recycle heat. Of course, they’re more expensive, but you’ll save on energy costs in the long term. 

Source of Fuel

The type of fuel used to heat your water is another major factor that can affect the overall cost. Most heaters are powered by either natural gas or electricity, but solar power is becoming more common. 

The initial cost of natural gas heaters is more, but there are no electricity costs involved. Over time, you’ll definitely save money thanks to a lower monthly power bill.

Electric heaters, on the other hand, have a cheaper upfront cost. Because they run on your home’s electricity, they’re more expensive to run. The upside is that they have cheaper installation costs, and the cost to replace them is lower. 

Solar heaters are the most environmentally friendly option for homeowners. They’re definitely the most expensive to purchase. But because they run on the power of the sun, there’s essentially no operating cost once it’s installed. 

Location, Permit & Labor Costs

Depending on where you live, you may be paying more or less than the average price range. Locations with a higher cost of living have higher plumbing costs. This include replacing, installing, and operating a new water heater. 

This rule also applies to the location of the heater within your home. Easily accessible areas within the home will have cheaper installation and labor costs. On the contrary, hard-to-access tight spaces will have a pricier bill tacked on for the homeowner. 

In regards to permits, whether or not you need one depends on your local government. To ensure proper installation, you may need to undergo an inspection to evaluate electrical lines, gas lines, and water lines. 

This shouldn’t cost too much, but once again, it depends on the location and the local government. Ask the installer for a complete breakdown of estimates, including the cost of a permit if it’s necessary. 

Disposal of the Old Water Heater

There are a few viable options for disposing of your old water heater. No matter which method you choose, you must follow local regulations on water heater disposal. 

Many homeowners choose to take their old appliances, including water heaters, to a local recycling center. You could also scrap it for parts, donate it, or even sell it if it’s still working efficiently enough. 

If you just want to take the easy way out, consider hiring a professional removal service. According to Angi, “You can also hire a junk removal service near you. These professionals will disconnect your old heater, carry it out of your home, and dispose of it properly according to local regulations.”

Is It Possible to Install a New Water Heater Without a Professional?

While it may be possible to install a new water heater without professional help, it’s not recommended. This is especially true if there’s natural gas involved. 

Working with natural gas is difficult, and more importantly, dangerous. That’s why it’s best to hire a pro with experience in the field. It may cost more, but it’s entirely worth it. 


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