Tankless Water Heater Installation Cost
Updated February 25, 2026
A tankless water heater unit costs $800-$2,500. The installation is where the budget surprises happen. First-time tankless installs (replacing a tank heater) run $2,000-$5,000 total because the infrastructure needs upgrading: larger gas line, new stainless steel venting, condensate drain, and sometimes electrical work. Replacing an existing tankless with a new one is much cheaper -- $1,500-$3,000 -- because the infrastructure is already in place. Here is what drives the cost and how to budget accurately.
Overview
A tankless water heater unit costs $800-$2,500. The installation is where the budget surprises happen. First-time tankless installs (replacing a tank heater) run $2,000-$5,000 total because the infrastructure needs upgrading: larger gas line, new stainless steel venting, condensate drain, and sometimes electrical work. Replacing an existing tankless with a new one is much cheaper -- $1,500-$3,000 -- because the infrastructure is already in place. Here is what drives the cost and how to budget accurately.
Cost Breakdown
Gas Tankless: First-Time Install
- This is the expensive scenario.
- You are removing a tank heater and installing a tankless in its place (or a new location).
- The unit costs $800-$2,500 depending on brand and capacity.
- Gas line upgrade: most tank heaters use a 1/2-inch gas line; most tankless units require 3/4-inch.
- Running a new gas line from the meter or manifold costs $200-$600.
- Venting: tank heaters use Type B vent (galvanized).
- Tankless units need Category III or IV stainless steel vent -- $200-$500 for materials and installation.
- Condensate drain: condensing tankless units produce acidic condensate that needs a drain line to a floor drain or exterior -- $50-$150.
- Electrical: the control board needs a 120V outlet nearby -- $100-$200 if one does not exist.
- Total first-time install: $2,000-$5,000.
Gas Tankless: Replacing Existing Tankless
Much simpler. The gas line, venting, condensate drain, and electrical are already in place. The plumber disconnects the old unit, mounts the new one, and reconnects everything. Labor: $300-$800. Total with unit: $1,500-$3,000. This is comparable to a standard tank replacement in cost. The key savings: no infrastructure upgrades needed.
Electric Tankless: Whole-House
Electric tankless units cost $500-$1,500. No gas line, no venting, no condensate drain -- simpler install. But whole-house electric tankless units draw 100-150 amps, which often requires a 200-amp electrical panel (or larger). Panel upgrade: $500-$2,000 if needed. Dedicated circuits: 2-3 circuits of 40-60 amps each -- $200-$600 for wiring. Total installed: $1,500-$4,500. If your panel already has capacity, the cost drops to $1,000-$2,500. Electric tankless is simpler mechanically but the electrical requirements can be a barrier.
Electric Tankless: Point-of-Use
Small electric units ($150-$400) installed at a single fixture -- under the kitchen sink, at a distant bathroom, or at a handwash station. These need a dedicated 20-40 amp circuit. If the circuit exists, installation is $100-$200. If a new circuit is needed, add $200-$400 for the electrician. Total: $250-$800 per unit. Point-of-use units are the cheapest entry to tankless and work great for supplementing a central water heater at distant fixtures.
Hidden Costs to Budget For
Permit: $50-$300 depending on municipality. Old unit disposal: $25-$75 (some plumbers include this). Mounting bracket and hardware: usually included with the unit. Water line modifications: if the tankless mounts in a different location than the old tank, rerouting hot and cold lines costs $100-$400. Shut-off valves and service ports (required for annual descaling): $50-$100 if not already installed. Surge protector for the control board: $20-$50 (recommended for areas with power fluctuations).
Safety Warnings
- Choosing an electric whole-house tankless without verifying your electrical panel has capacity. A panel upgrade adds $500-$2,000 to the project.
Pro Tips
- Get three quotes and make sure each includes: unit cost, gas line work, venting, electrical, permit, and disposal. The cheapest quote is often missing one of these line items.
- If you are converting from tank to tankless, ask the plumber whether they recommend keeping the tankless in the same location or moving it closer to an exterior wall (shorter vent run = cheaper install).
- Rinnai, Navien, and Noritz are the three most-installed residential brands. All offer 12-year heat exchanger warranties. The unit price difference between brands is $100-$300 -- less important than the installation quality.
- Tax credits: gas tankless units that meet Energy Star criteria may qualify for a $150 tax credit. Heat pump water heaters get a much larger 30% credit (up to $2,000). Factor incentives into your total cost comparison.
Mistakes to Avoid
- Budgeting only for the unit and assuming installation is $300-$500. First-time tankless installs are $1,200-$2,500 in labor and materials on top of the unit cost.
- Choosing an electric whole-house tankless without verifying your electrical panel has capacity. A panel upgrade adds $500-$2,000 to the project.
- Not installing isolation valves with service ports for descaling. Annual descaling is required maintenance -- without service ports, the plumber cannot flush the heat exchanger without extra work each time.
- Buying the cheapest tankless unit from an unknown brand. The heat exchanger is the critical component. Cheap heat exchangers fail in 3-5 years; quality ones last 15-20 years.
Bottom Line
First-time gas tankless installation: $2,000-$5,000 total. Tankless-to-tankless replacement: $1,500-$3,000. Electric whole-house: $1,500-$4,500. Point-of-use electric: $250-$800. The unit is typically 40-50% of the total cost. Infrastructure upgrades (gas line, venting, electrical) make up the rest. Budget for the full installed price, not just the unit.
Frequently Asked Questions
What are expert tips for tankless water heater installation cost?
Get three quotes and make sure each includes: unit cost, gas line work, venting, electrical, permit, and disposal. The cheapest quote is often missing one of these line items. If you are converting from tank to tankless, ask the plumber whether they recommend keeping the tankless in the same location or moving it closer to an exterior wall (shorter vent run = cheaper install). Rinnai, Navien, and Noritz are the three most-installed residential brands. All offer 12-year heat exchanger warranties. The unit price difference between brands is $100-$300 -- less important than the installation quality. Tax credits: gas tankless units that meet Energy Star criteria may qualify for a $150 tax credit. Heat pump water heaters get a much larger 30% credit (up to $2,000). Factor incentives into your total cost comparison.
What mistakes should I avoid with tankless water heater installation cost?
Budgeting only for the unit and assuming installation is $300-$500. First-time tankless installs are $1,200-$2,500 in labor and materials on top of the unit cost. Choosing an electric whole-house tankless without verifying your electrical panel has capacity. A panel upgrade adds $500-$2,000 to the project. Not installing isolation valves with service ports for descaling. Annual descaling is required maintenance -- without service ports, the plumber cannot flush the heat exchanger without extra work each time. Buying the cheapest tankless unit from an unknown brand. The heat exchanger is the critical component. Cheap heat exchangers fail in 3-5 years; quality ones last 15-20 years.
What is the bottom line on tankless water heater installation cost?
First-time gas tankless installation: $2,000-$5,000 total. Tankless-to-tankless replacement: $1,500-$3,000. Electric whole-house: $1,500-$4,500. Point-of-use electric: $250-$800. The unit is typically 40-50% of the total cost. Infrastructure upgrades (gas line, venting, electrical) make up the rest. Budget for the full installed price, not just the unit.
What's the bottom line on tankless water heater installation cost?
First-time gas tankless installation: $2,000-$5,000 total. Tankless-to-tankless replacement: $1,500-$3,000. Electric whole-house: $1,500-$4,500. Point-of-use electric: $250-$800. The unit is typically 40-50% of the total cost. Infrastructure upgrades (gas line, venting, electrical) make up the rest. Budget for the full installed price, not just the unit.
How much does tankless water heater installation cost cost?
The typical cost range is $1,500-$5,000 depending on type and whether infrastructure exists. Actual costs depend on your location, materials, and whether you hire a professional.