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How Much Does It Cost to Get a Tankless Water Heater Installed?

Published August 6, 2023
Written by Eric Smith
How Much Does It Cost to Get a Tankless Water Heater Installed?

Straight talk from our Wisconsin Master Tradesman about what a tankless water heater installation costs and the factors that determine the total.

When one of our clients is considering upgrading their tank water heater to a tankless, one of the most common and logical questions is how much does a tankless water heater installation cost. What most homeowners are trying to figure out is how much more does a tankless cost and is it worth it.  

Today, the installation of a residential tankless water heater can cost roughly $4,000 at the low end and $8,000 at the high end.

This large range would be inclusive of all of the variables that we typically run into with a tankless water heater installation and include all of the labor, materials and equipment required for the installation. Read on for an explanation and breakdown of tankless water heater installation and replacement costs. 

What factors determine the true total cost of a tankless water heater replacement?

At Austin Plumbing, Heating & Air we pride ourselves on providing our clients with the exact cost of all projects up front before any of the work begins. We provide this price to clients in one easy to understand investment, but inside of the one price are three major cost categories that combine to determine what a tankless water heater installation will ultimately cost.  

  • Equipment & Materials. The tankless water heater itself, installation materials and other required components would fall into the category of equipment and materials. This is where the lion’s share of the installation cost will fall. 
  • Installation and Required Plumbing Modifications. Most homeowners in Wisconsin do not have an existing tankless water heater, which means we are converting from a tank style to a tankless water heater. The installation cost is typically looked at as the labor and total scope of work required to put the new tankless water heater in your home and connect it to the existing plumbing system. A factor in what is required will be permits, which do not contribute a significant amount of cost to the tankless installation itself, but are required by the state to insure that the water heater is installed to code. Because the installation must meet state and federal codes, work required to be completed to pass inspection can be a factor in the total cost of the installation. 
  • Accessories & Upgrades. Many of our clients have additional accessories on their hot water heaters that improve the user experience of their hot water heaters or would like them installed with their new tankless water heater. Some examples of accessories or upgrades that can add cost to a tankless water heater installation are recirculation pumps, leak detectors, mixing valves, and emergency shut off valves. 

Let’s drill into each of these categories and break down the costs of each.

Potential Cost of Equipment & Materials: ~$2,000-$4,000

Specific Equipment Costs: $1,800- $2,500

We do not sell tankless water heaters as retail items, so when we sell a tankless water heater it’s included as an installed product. However we do purchase tankless water heaters and are able to break out the typical equipment cost associated with a tankless water heater installation. 

Potential Required Installation Materials: ~$150-$500

Even in the most simple tankless water heater installation there is a great deal of plumbing fittings, materials, and consumables required to complete the installation. Here are some common examples of basic plumbing materials and supplies required to complete a tankless hot water heater installation. 

  • Hot/cold water shut-off valves
  • Tankless water heater service valves
  • Electrical, wire and fittings 
  • Gas pipe, fittings and valves
  • Condensate pipe and fittings 
  • Copper water piping 
  • PVC or exhaust piping

Installation & Plumbing Modifications: ~$2,000-$4,000

For reasons of compatibility, your existing water heater, home plumbing system, gas or electrical system, and exhaust all play a role in determining the price of replacement. In addition to the examples mentioned earlier in this article, this also includes infrastructural considerations like the shape of your flue piping, the desired location of your new heater (if changed), and any venting, intake, or drains that need to be installed.

In short, the more dramatic the change, the more complex the installation must be-and therefore the greater impact it will have on your total cost.

Austin Plumbing, Heating & Air’s typical tankless water heater installation includes: 

  • Delivery of the tankless water heater
  • Floor protection materials (drop cloths or other methods)
  • Removal, haulaway, and disposal of your old heater
  • Connecting the new water heater to your existing hot/cold water piping 
  • Connecting the new water heater to your electrical or gas system
  • Connecting the new water heater to your current venting or exhaust system
  • Installation of any accessories purchased
  • Completion of any necessary plumbing code updates 
  • Customer training and install overview
  • Warranty registration and post-installation followup

Potential Cost of Water Heater Accessories: $100-$2,000

Upgrading to a tankless water heater does eliminate the need for many common water heater accessories, but not all of them. Below are some of the most common accessories that could impact the cost of installation. 

Most Commonly Purchased Accessories for New Water Heaters

These include:

  • Recirc pumps. A hot water recirculation pump makes sure that you have instant hot water waiting at the most common hot water fixtures in your home. Some homeowners call tankless water heaters instant hot water heaters and think that this instant hot water appears at the fixture. Unfortunately, this is not how tankless water heaters work but if you want instant hot water at a faucet in your home, you will need a hot water recirculation system.
  • Extended warranties. Out of the box, most tankless water heaters have a five year parts warranty and over 10 years on the heat exchanger. Some manufacturers have the option to pay extra for extended warranties. If you are the type of homeowner that typically purchases extended warranties, you may consider that as an upgrade for your tankless heater. 
  • Smart tankless water heater controls. Some tankless water heaters have smart controls that allow a homeowner to control the water heater and its set point from an app.

What is the Breakdown of a Tankless Water Heater Installation?

In the simplest form, a tankless water heater installation is almost always a 50/50 split between equipment and material costs, and labor and installation costs. This means if the total installed price of your tankless water is $6,000 there will be about $3,000 of labor and installation required for the installation. 

FAQs About Tankless Water Heater Installation

Does a tankless water heater installation cost more or less than a tank installation?

The upfront installation cost of tankless water will be more than standard installation of a tank style water heater. It is important to keep in mind that often the majority of initial installation is the conversion from the tank water heater to the tankless and will be a one time upfront expense. 

How much more is a tankless water heater than sticking with a tank? 

Assuming that you have a standard venting gas water heater, you can expect to spend about double the cost of a like-for-like replacement to convert from a tank style to a tankless. Keep in mind that most of that cost is a one time cost. 

What is the return on investment for converting to a tankless?

Check out our complete guide on all the factors that go into calculating your return on investment. Although there are plenty of savings to be had when you switch from a tank to a tankless water heater, there are too many actual variables to state a true return on investment. 

Understanding Tankless Water Heaters

Tankless water heaters, also known as on-demand water heaters, utilize powerful burners to rapidly heat water as it passes through a heat exchange. The heated water is then distributed to faucets and showers as needed. Unlike traditional water heaters that store water in a tank, tankless units never store water. They are typically powered by electricity or gas.

In contrast, traditional water heaters store 30 to 50 gallons of water in a tank and keep it heated, distributing it when needed. Traditional units can also be powered by natural gas or electricity.

Pros and Cons of Tankless Water Heaters


  • Unlimited hot water supply.
  • Longer lifespan compared to traditional units, often lasting 20 years or more.
  • Easier to repair by replacing individual components.
  • Greater energy efficiency, potentially resulting in utility bill savings.
  • Space-saving, requiring less installation space.
  • Ensures consistent hot water supply.


  • Inconsistent water temperatures, especially during simultaneous hot water usage.
  • Higher initial cost compared to traditional units.
  • Installation complexity can increase the cost.

Is a Tankless Water Heater Worth It?

Despite the higher upfront cost, tankless water heaters may offer better long-term value due to energy efficiency, longer lifespan, and potential savings on utility bills. Comparatively, traditional tank water heaters can last 10 to 12 years.

Top Tankless Water Heater Brands

Recommended tankless water heater brands include Bradford White, Navian, Rheem, EcoSmart, Bosch, and Rinnai. Bradford White or Navian is preferred for its durability and product quality.

Electric vs. Gas Tankless Water Heaters

Choosing between electric and gas tankless water heaters depends on factors like cost, performance, and efficiency. Electric units are usually cheaper to install and have higher EF ratings, indicating better energy efficiency. Gas units, on the other hand, offer superior hot water output (GPM), making them ideal for larger households.

Maintenance and Ignition Systems

Gas-fueled tankless water heaters may require regular maintenance to prevent mineral buildup. There are different ignition systems available, each with its own advantages and cost implications. 

Choosing a Plumber for Tankless Installation

Selecting a reputable, experienced plumber for the installation is crucial. Recommendations, online research, and estimates are helpful in finding the right plumber.

Summary of Key Considerations

  • Tankless water heaters have a higher installation cost but offer improved energy efficiency and longevity.
  • Thorough research is essential to choose the right fuel type and ventilation system.
  • The typical installation cost through Austin Plumbing, Heating & Air is around $2,000 to $4,000 for gas models, though this can vary based on several factors previously covered in this guide.
  • Choosing a reliable plumber for installation is vital for a successful tankless water heater setup.

If you need assistance with water heater installation or have any inquiries, don’t hesitate to reach out to Austin Plumbing, Heating & Air, a trusted expert in water heater installations and repairs.

Why Choose Austin Plumbing, Heating & Air for Tankless Installation?

Austin Plumbing, Heating & Air has been serving Southeast Wisconsin for over 80 years and has helped thousands of homeowners with their hot water heater needs. Our team of experts can help you decide if a tankless water heater is right for you and your home and will ensure your new water heater is installed properly for years of trouble free operation. 

About The Author: Eric Smith
Eric Smith is a 3rd generation State of Wisconsin Master Plumber, Water Well Pump Installer, Plumbing Contractor, Water Well Contractor, HVAC Contractor and Water Treatment Expert and the owner of Austin Plumbing, Heating & Air.