If you’re in the market for a new water heater, doing your research regarding the cost of the hot water heater and the cost to install the water heater is imperative. In this guide, we help you sort through your options by providing the average water heater cost and water heater installation costs. You’ll also learn more about the factors affecting pricing, as well as other things you must consider.
How much does a water heater cost?
The average price range includes cost factors such as the cost of labor, costs for materials, permits, removal of the old water heater, and the water heater itself. We’re going to break that down into the following points to help you better understand pricing:
There are a few features that can affect the cost of the unit:
- Capacity: Larger heaters will use more energy (to heat more water), but offer more water on reserve for times when the shower is in use and dishes are being washed. Residential water heaters range in capacity from about 20 to 80 gallons, with the average between 30 and 40 gallons.
- Rate: Different heaters can refill themselves at different speeds. Needs may vary, depending on whether a household tends to use hot water in concentrated bursts.
- Warranty: A water heater with a longer warranty typically costs more. This corresponds partly to the value of the warranty itself, and partly to the claim that the warranty makes about the likely longevity of the product: better products have longer warranties because the company believes they will last longer. A warranty can be very useful, so conditions of the warranty should be reviewed carefully. It can also be useful to read online about other people’s experience with the same product.
- Features: Different companies advertise a variety of different features that contribute to the lifespan or flow rate of their water heaters. For example, the interior tank might be lined with glass or some other anti-corrosive material. Ultimately, the length of the warranty may be the best indicator of a unit’s lifespan.
Water heater prices
The cost of water heater varies according to its type. For example, a standard tank gas-fired water heater will range from $2,310 for a 50-gallon tank to $8,380 for a 91-gallon tank.* The water heater cost changes if it’s a tankless unit. For example, they’ll range between $1,830 for a 19.5-140 Mbh to $2,160 for a 25-235 Mbh natural gas unit.*
According to Home Depot, the national cost to install a water heater ranges between $952 and $2,098. If you choose a tankless unit, the cost of water heater installation ranges between $2,044 and $5,898. Installation prices also vary according to the size of the tank you want. Hot water tank sizes range between 20 and 80 gallons, with the 40-gallon tank being the most common. Think about the size of your household and, if it’s more than two people, you’ll need the 40-gallon tank or higher.
Many homeowners successfully install their own hot water heaters, usually without incident. The process involves removing the old unit, connecting the new one to water (input and output) and then to power. It’s important to know the steps involved before undertaking the work. Some warranties are voided when homeowners install units themselves.
New versus replacement costs
On average, water heaters will last between 8 and 12 years. The average price for repair is $500, with a national average price being $1,100. If your unit is over 12 years old, it doesn’t feature the latest technology. So, in the long-run, the cost to replace a water heater is a wise decision compared to paying for frequent repairs.
Factors that affect water heater cost
The cost of a water heater will vary depending on the difficulty of the installation, if the water heater is gas or electric, the unit’s size and the price of the contractor you hire. Other factors include your type of home, and if the water heater includes advanced features. Here are some additional cost considerations:
Electric residential hot water heater
Prices for an electric domestic hot water heater range between $410 for a 6-gallon tank to $562 for a 50-gallon tank.* These tanks sit on the floor and you must also take into account any additional pipe and electrical connections that might occur.
Gas-fired residential hot water heater
Prices range between $476 for a 30-gallon tank and $874 for a 30-gallon tank.* The labor prices, which range between $36.50 and $54.80, are for setting the unit in place. You must make additional allowances for combustion venting systems and pipes.
Tankless electric point-of-use water heater
Prices range between $461 for .75-2 GPM and $1,660 for 1.5-5 GPM.* These costs do not include circulating pumps, controls, electrical connections, piping, storage tank and temperature control. So, those factors, along with post-installation inspection, must be considered.
Domestic water heater combustion vent connection
If you need this type of vent connection, you must also consider the additional cost for piping if the distance if 25′ or higher. The prices range between $540.30 for the tankless heater vent kit to $1,223 for a power vent kit.*
Cost to run a water heater
A variety of factors play into the cost of hot water heater operation. These factors include how much hot water it’s using, if it’s gas or electric and the setting of your thermostat. You’ll reduce costs by turning down your thermostat, taking quicker showers, using low-flow faucets and heads, insulating your tank and upgrading to an energy-efficient tank. Here are the primary things to that can affect your running costs:
The energy efficiency will vary depending on if you use a gas or electric water heater. If you’re running an electric water heater that uses 64 gallons daily, you could save $281 on your energy bills over the life of the water heater. Running a gas water heater that uses 64 gallons daily could save you $83 on your energy bills over the same period.
The average cost for maintaining a water heater is $480 and can go up to $1,200. These prices vary depending on if your water heater needs an inspection or repairs by an HVAC professional.
Costs to run per year
These costs will vary depending on if you’re running an electric or gas water heater. For example, if you’re running an electric water heater that uses 64 gallons daily, your costs could range between $276 and $305 annually. If you’re using a gas water heater that uses 64 gallons daily, your costs could range between $105 and $152 annually.
Type of Fuel
You can choose between a gas and electric water heater. You’ll find that gas water heaters are not as costly as electric units. One key reason for this is that, although the difference in costs between fuel types is small, you’re using more power to run an electric water heater. However, because the cost of gas can rise unexpectedly, some believe it’s more cost-effective to use electric units over time.
The size of the tank
When considering the size of your hot water heater’s tank, that refers to how much hot water it’s producing. Look at the gallons per minute (GPM) the unit is producing. The higher the GPM, the higher the costs for equipment. Your unit’s GPM is affected by local climate patterns, as well as your desired water temperature.
The complexity of the installation
Your upfront cost can increase depending on the complexity of your installation. For example, if you need new gas lines or a system rewire, those factors will increase costs. Before moving on with any installation, contact an HVAC professional to discuss additional upgrades or installation complexities they may encounter. *James Thomson. 2019 National Plumbing & HVAC Estimator. (Craftsman Book Company, 2018).
Water heater tax credit?
The US government offers tax credits for water heaters that meet certain efficiency standards. Purchasing a traditional water heater (powered by fossil fuel or by electricity) that meets the government’s standards qualifies homeowners for a $300 credit when you do your taxes next year. The threshold is 90% thermal efficiency; that is, 90% of the energy that goes in to the heater should end up as thermal energy within the water. This credit is in effect for 2011.
Solar water heaters receive a tax credit worth 30% of their overall cost (including installation cost) with no upper limit. This credit remains in effect through 2016. The initial cost of solar panels is much higher: materials and installation will cost several thousand dollars. However, solar panels can save large amounts of money over the course of a decade. If everything works properly with a solar water heater system, monthly energy costs for hot water will go down to zero.
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