How much does a tankless water heater cost to install?
Installing a gas tankless water heater runs $3,000–$6,500 all-in, including the unit and professional installation. A standard 40–50 gallon tank heater costs $1,200–$3,500 installed. The tankless pays back its premium through energy savings in 8–15 years for most households.
Gas line upsizing is the hidden cost most quotes leave out. Most whole-home tankless units require a ¾-inch gas line — if your current line is ½-inch, upgrading it adds $300–$800 to the project. Always ask about this upfront.
What makes up the total tankless installation cost
Unit cost — condensing vs non-condensing
Non-condensing: $600 – $1,200 unit; condensing: $1,000 – $1,800 unitHow to tellNon-condensing tankless (standard efficiency, 80–85% efficient) is less expensive but vents through PVC or stainless; condensing models (90–98% efficient) cost more but save more on gas
The fixFor most homes, a condensing unit pays back the premium; non-condensing is fine where venting is a constraint
Installation labor and venting
$800 – $1,800 labor; $200 – $600 venting materialsHow to tellNew venting run for the tankless unit, which often goes out a side wall rather than up through the roof like a tank heater
The fixPlumber installs unit, connects gas and water lines, runs new vent — typically 4–8 hours
Gas line upsizing
$300 – $800; can hit $1,500 if the run is longHow to tellTankless units need 150,000–200,000+ BTU; most homes have ½-inch gas supply lines sized for a tank heater's 40,000 BTU demand
The fixPlumber runs new ¾-inch or 1-inch gas line from the meter; this is frequently needed and frequently omitted from initial quotes
Electrical connection
$150 – $400 if new circuit neededHow to tellAll tankless heaters — even gas — need electricity for ignition and controls; most require a dedicated 120V circuit
The fixIf you don't have an outlet near the installation location, an electrician is needed
Water softener or scale prevention
$150 – $600 for filter; $1,000 – $3,000 for whole-house softenerHow to tellTankless heaters are much more sensitive to scale buildup than tanks — hard water areas require regular maintenance or a whole-house filter/softener
The fixAnnual descaling flush ($150–$300) or installation of a scale-prevention filter at the unit
Try this first (before you pay anyone)
- Check your current gas line size before getting quotes — look at the pipe diameter at the meter or where it connects to your current water heater. ½-inch pipe (about the diameter of a nickel) means upsizing is likely needed.
- Ask any installer explicitly: 'Does your quote include gas line upsizing if needed?' A quote that doesn't account for this will have a surprise add-on.
- For a like-for-like tankless swap (replacing an existing tankless), costs are much lower — $1,500–$2,500 — since the gas line, venting, and electrical are already in place.
Unlock the hiring checklist
Use this before you call a plumbing, so you know what to ask and what to avoid.
Call a pro when…
- Gas line work of any kind requires a licensed plumber — never DIY gas connections
- Your current tank heater is 8+ years old and showing signs of failure (rumbling, rust-colored water, pooling) — a replacement decision is urgent, not a research project at that point
- You want to evaluate whether a heat pump water heater (electric, lower operating cost) might make more sense for your home — the technology has improved significantly and may be a better fit than gas tankless in some climates
Repair or replace?
Tankless water heaters last 15–25 years — significantly longer than tank heaters (8–12 years). For a tankless under 10 years old with a single component failure (flow sensor, igniter, heat exchanger), repair is the right call at $150–$600. For a tankless over 15 years or with heat exchanger failure on an older unit, replacement makes more sense — heat exchanger repair can approach or exceed a new unit's cost. Tank heaters: if it's over 10 years old at first failure, get a replacement quote alongside the repair quote.
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Related questions
How much do tankless water heaters save on energy bills?
The US Department of Energy estimates tankless heaters are 8–34% more efficient than tank heaters for average households. For a family using 40–80 gallons per day, savings run $100–$300 per year on gas. At that rate, the $1,500–$3,000 premium over a tank heater pays back in 8–15 years. Higher hot water usage accelerates the payback.
Can a tankless water heater run out of hot water?
Technically no — they heat water on demand without a storage limit. But they do have a flow rate limit: most residential units produce 5–8 gallons per minute. If you run a shower, dishwasher, and washing machine simultaneously, the unit may not keep up with demand, and water temperature drops. Size the unit correctly (look for GPM rating and temperature rise for your climate) or install two units for large households.
Is tankless worth it if I'm selling the house soon?
Usually not for the energy savings — you won't be there for the payback period. However, a new high-efficiency tankless is a legitimate selling feature that many buyers notice, especially on home inspection reports. The resale angle is secondary; the main case for tankless is for owners staying 8–15+ years.
Can I install a tankless water heater myself?
Gas line connections must be done by a licensed plumber in virtually every jurisdiction. The unit itself can be mounted by a handy homeowner, but connecting it legally — gas, venting, and electrical permit — requires licensed trades. An unlicensed install voids manufacturer warranties and homeowner's insurance coverage for gas-related incidents.