How Much Does It Cost to Install a Tankless Water Heater?
Installing a tankless water heater costs $1,400 to $3,900, averaging about $2,640, according to Angi's 2026 data. That is the installed price — the unit, the labour, and the basic hookups — for a whole-home system. A small electric point-of-use unit for one sink costs as little as $400 installed, while a large gas system in a home that needs a new gas line and venting can pass $5,000.
Tankless heaters cost more up front than the tank heater most homes already have — a standard tank replacement runs $882 to $1,826, per Angi. Whether the premium pays off depends on your fuel type, household size, and conversion work.
Tankless Installation Cost at a Glance
The table below shows typical prices in the United States, checked Nov 10, 2026 (sources: Angi, HomeGuide, and HomeAdvisor).
| Item | Typical cost |
|---|---|
| Average installed cost | About $2,640 |
| Most projects | $1,400–$3,900 |
| Electric tankless, whole-home | $1,400–$3,000 |
| Gas tankless, whole-home | $2,100–$5,600 |
| Point-of-use unit, one fixture | $400–$1,000 |
| Unit alone | $600–$2,600 |
| Labour | $600–$1,850 |
| Tank heater replacement (for comparison) | $882–$1,826 |
HomeAdvisor ($2,638), Angi ($2,629), and Fixr ($2,811) agree within $200 of each other, so the average is trustworthy — the spread in your quotes will come from your home.
Gas vs Electric: The First Decision
Gas and electric tankless heaters are different jobs with different prices, and the choice is usually made by what your home already has.
Electric units are cheaper twice over. The unit costs $600 to $1,000, against $1,500 to $2,600 for a gas unit, per HomeGuide. Installation is simpler too — no venting, no gas line, and often no new exhaust route through the wall or roof. A whole-home electric install lands at $1,400 to $3,000.
Gas units cost more to buy and more to install, but they heat water faster and handle bigger households. A gas whole-home install runs $2,100 to $5,600, and the top end is almost always a conversion.
| Factor | Electric tankless | Gas tankless |
|---|---|---|
| Unit cost | $600–$1,000 | $1,500–$2,600 |
| Installed cost | $1,400–$3,000 | $2,100–$5,600 |
| Annual running cost | $340–$540 | $220–$480 |
| Needs venting | No | Yes |
| Needs gas line | No | Often |
| Best for | Small homes, warm climates | Large households, cold climates |
If your home already has a gas line and a vent route, gas is the natural pick. If it does not, electric avoids the two most expensive add-ons — but check your electrical panel first: a whole-home electric tankless can need a 200-amp service, and a panel upgrade is a separate $1,300 to $3,000 job.
Cost by Size: How Many Gallons per Minute?
Tankless heaters are sized in gallons per minute (GPM) — how much hot water they can heat at once. Undersize it and the shower goes cold when someone runs the dishwasher.
| Household need | Flow rate | Unit cost |
|---|---|---|
| Single fixture (one sink) | 1–2 GPM | $150–$250 |
| One bathroom | 3–5 GPM | $250–$600 |
| Two bathrooms | 5–7 GPM | $400–$1,200 |
| Large household, 3+ bathrooms | # How Much Does It Cost to Install a Tankless Water Heater? |
Installing a tankless water heater costs $1,400 to $3,900, averaging about $2,640, according to Angi's 2026 data. That is the installed price — the unit, the labour, and the basic hookups — for a whole-home system. A small electric point-of-use unit for one sink costs as little as $400 installed, while a large gas system in a home that needs a new gas line and venting can pass $5,000.
Tankless heaters cost more up front than the tank heater most homes already have — a standard tank replacement runs $882 to $1,826, per Angi. Whether the premium pays off depends on your fuel type, household size, and conversion work.
Tankless Installation Cost at a Glance
The table below shows typical prices in the United States, checked Nov 10, 2026 (sources: Angi, HomeGuide, and HomeAdvisor).
| Item | Typical cost |
|---|---|
| Average installed cost | About $2,640 |
| Most projects | $1,400–$3,900 |
| Electric tankless, whole-home | $1,400–$3,000 |
| Gas tankless, whole-home | $2,100–$5,600 |
| Point-of-use unit, one fixture | $400–$1,000 |
| Unit alone | $600–$2,600 |
| Labour | $600–$1,850 |
| Tank heater replacement (for comparison) | $882–$1,826 |
HomeAdvisor ($2,638), Angi ($2,629), and Fixr ($2,811) agree within $200 of each other, so the average is trustworthy — the spread in your quotes will come from your home.
Gas vs Electric: The First Decision
Gas and electric tankless heaters are different jobs with different prices, and the choice is usually made by what your home already has.
Electric units are cheaper twice over. The unit costs $600 to $1,000, against $1,500 to $2,600 for a gas unit, per HomeGuide. Installation is simpler too — no venting, no gas line, and often no new exhaust route through the wall or roof. A whole-home electric install lands at $1,400 to $3,000.
Gas units cost more to buy and more to install, but they heat water faster and handle bigger households. A gas whole-home install runs $2,100 to $5,600, and the top end is almost always a conversion.
| Factor | Electric tankless | Gas tankless |
|---|---|---|
| Unit cost | $600–$1,000 | $1,500–$2,600 |
| Installed cost | $1,400–$3,000 | $2,100–$5,600 |
| Annual running cost | $340–$540 | $220–$480 |
| Needs venting | No | Yes |
| Needs gas line | No | Often |
| Best for | Small homes, warm climates | Large households, cold climates |
If your home already has a gas line and a vent route, gas is the natural pick. If it does not, electric avoids the two most expensive add-ons — but check your electrical panel first: a whole-home electric tankless can need a 200-amp service, and a panel upgrade is a separate $1,300 to $3,000 job.
Cost by Size: How Many Gallons per Minute?
Tankless heaters are sized in gallons per minute (GPM) — how much hot water they can heat at once. Undersize it and the shower goes cold when someone runs the dishwasher.
| Household need | Flow rate | Unit cost |
|---|---|---|
| Single fixture (one sink) | 1–2 GPM | $150–$250 |
| One bathroom | 3–5 GPM | $250–$600 |
| Two bathrooms | 5–7 GPM | $400–$1,200 |
| Large household, 3+ bathrooms | 8+ GPM | $600–$2,000 |
Unit costs are from Angi; add $600 to $1,850 in labour on top, plus any conversion work. Size for your winter water temperature, not your summer one — cold incoming water needs a bigger unit for the same showers.
Tank-to-Tankless Conversion: The Hidden Line Items
Converting from a tank heater to a tankless one is where quotes surprise people. The unit is only part of the job — the conversion work is the rest.
| Conversion add-on | Typical cost |
|---|---|
| Gas line install or upgrade | $350–$2,000 |
| Venting (gas units) | $300–$800 |
| Electrical work or panel upgrade | $200–$1,500 |
| Permits | $200–$500 |
| Old heater removal and disposal | $100–$300 |
| Conversion labour alone | $600–$2,500 |
HomeGuide puts conversion labour alone at $600 to $2,500, because the job can take twice as long as a like-for-like swap — the installer is replumbing to a new mounting location, not just swapping a box. A gas line upgrade is the most common surprise: a tankless unit needs a larger gas supply than a tank heater, and running a new line through a finished house is slow work.
Before you sign, ask for the quote itemised into unit, venting, gas line, electrical, permit, and removal. A quote that shows only one number is hiding where the money goes.
The 25C Federal Tax Credit Has Ended
One thing to stop counting on: the federal 25C energy-efficient home improvement credit. It ended on December 31, 2025, under the One Big Beautiful Bill Act. It no longer applies to water heaters installed in 2026.
Older articles and some contractor websites still mention a 30% credit of up to $600 for efficient water heaters. That was true for work placed in service through the end of 2025. For a 2026 installation, there is no federal credit to claim. Some states and utilities still offer their own rebates for efficient water heating — check your state energy office or your utility's rebate page before you buy, because those change often and vary by location.
Is Tankless Worth It?
The honest comparison is tankless against a new tank heater, not against doing nothing.
A tank heater costs $882 to $1,826 installed and lasts 6 to 12 years. A tankless system costs $1,400 to $3,900 installed and lasts 20 years or more. Over 20 years, you buy one tankless unit or two tank heaters — so the lifetime equipment cost is closer than the first quote suggests.
Tankless makes sense when you value endless hot water, you are staying in the home long term, or your tank heater has failed and you are paying for an install either way. It makes less sense as a retrofit in a home that needs a new gas line, a new vent, and a panel upgrade all at once — that is when the total can pass $5,000 and the payback stretches past the unit's life.
A Worked Example: Gas Conversion for a Three-Bedroom Home
Take a family of four in a three-bedroom, two-bathroom home, switching from a 40-gallon tank heater to a gas tankless unit.
| Line item | Cost |
|---|---|
| Gas tankless unit, 7 GPM | $1,600 |
| Venting (new route through the wall) | $300 |
| Gas line upgrade | $500 |
| Labour, one day | $1,000 |
| Permit | $200 |
| Old heater removal | $100 |
| Total | $3,700 |
That lands inside the $1,400 to $3,900 typical range, near the top — exactly where a conversion should land. The same household choosing a like-for-like tank replacement would pay about $1,350. The tankless premium here is about $2,350, for endless hot water and a unit that should outlast two tank heaters.
If the same home already had a gas line and a vent in place, the gas line and venting lines drop out and the total falls to about $2,900 — near the $2,640 national average.
Mistakes to Avoid
- Sizing by the old tank's gallons. Tankless is sized in gallons per minute, not tank size. A 40-gallon tank does not translate to a flow rate — count simultaneous showers and fixtures instead.
- Counting on the 25C tax credit. It ended December 31, 2025. A quote that subtracts it is using last year's rules.
- Ignoring the gas line. A tankless unit needs more gas than a tank heater. If the quote does not mention the gas line, it is incomplete.
- Skipping the electrical check on electric units. A whole-home electric tankless can need 200-amp service — a panel upgrade is a separate job.
- Accepting a single-number quote. Venting, gas line, permit, and removal should each be listed, so you can see what you are paying for.
Frequently Asked Questions
How much does it cost to install a tankless water heater?
About $2,640 on average, checked Nov 10, 2026, with most projects between $1,400 and $3,900. Electric systems run $1,400 to $3,000; gas $2,100 to $5,600.
Is a tankless water heater worth the extra cost?
It depends on how long you stay. A tankless unit lasts 20+ years against 6 to 12 for a tank heater. The case is strongest if you value endless hot water or are replacing a failed heater anyway.
Does the federal tax credit still apply to tankless water heaters?
No. The 25C energy-efficient home improvement credit ended on December 31, 2025. It does not apply to installations in 2026. Check your state or utility for their own rebates instead.
How much does it cost to convert from a tank to a tankless water heater?
Conversion labour alone runs $600 to $2,500, plus $350 to $2,000 for a gas line upgrade, $300 to $800 for venting, and $200 to $500 for permits. A typical gas conversion totals $2,900 to $3,700.
What size tankless water heater do I need?
Count hot-water uses: 3 to 5 GPM covers one bathroom, 5 to 7 GPM covers two, and 8+ GPM covers a large household. Size for your coldest incoming water temperature.
