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Water Heater Installation Cost (2021)

In this article, we discuss the cost of installing a water heater, the different types of water heaters available, and the warning signs that point to a failing system.

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Clean, hot water has become a comfort in almost every household. While the need for hot water in a house is unchanging, the way in which it’s heated isn’t, with various tanks and fuel sources available to homeowners. Whether purchasing a water heater for a new home or replacing a broken one, it’s important to understand the types of water heaters available to you and how much they cost.

Tank vs. Tankless Water Heaters

Tank and tankless water heaters are two of the most common types of water heaters available.

Tank Water Heaters

Storage tank water heaters are a popular choice for homeowners, constantly holding and heating gallons of water. Water heaters are installed out of sight, oftentimes in a garage, basement, or utility closet. To heat the water, tank water heaters typically use electricity or natural gas.

Storage tank water heaters are easier to install than their tankless counterparts, requiring about three hours of labor. Established as the conventional water heater that’s easy to install, storage tank heaters are less expensive than tankless systems, running between $820–$1,290.

Although a more affordable option, tank heaters are less energy-efficient since they constantly run to maintain the desired tank temperature. As a result, these tanks have higher utility bills and a shorter lifespan.

Tankless Water Heaters

Tankless water heaters work by heating water as needed. The system uses a gas burner or electricity to heat the water pipe, supplying water on demand. Like a hot water storage tank, a tankless unit can be stored in a basement or utility closet. Smaller than a tank unit, tankless heaters can also be mounted to a bathroom or bedroom wall.

Tankless water heaters have a higher initial price compared to tank heaters, costing homeowners around $1,200–$3,500. The higher cost is a result of a more labor-intensive set-up, as new gas and water lines are required for installation.

For electrical tankless heaters, new electric wiring will need to be installed. Although the installation of tankless heaters is less affordable than traditional models, they’re more efficient and incur a lower energy cost than their counterparts. Additionally, these water heaters last longer, with a typical lifespan of about 20 years.

Gas vs. Electric Water Heaters

Gas and electrical models are available for both tankless and tank water heaters, each providing homeowners with unique pros and cons.

Electric Water Heaters

An electric tank is less expensive to purchase and install than a gas tank, with a residential 50-gallon tank water heater priced around $500. However, the total cost of the monthly operation tends to be more expensive than that of a gas heater. This heat source is considered safer than gas, as there’s a smaller risk of a leak or combustion. The downside to a more environmentally friendly electric heater is that if the power goes out, so does the hot water.

Gas Water Heaters

Gas heaters are more expensive to purchase at around $700 for a 50-gallon tank. However, the operational cost of these heaters costs less than an electric model. Although natural gas is more apt to combust or leak, a gas model provides hot water without electricity. The biggest downside to a gas water heater is its harm to the environment through the emission of carbon dioxide.

Read More: A Guide to the Best Water Heater Warranty

Energy-Efficient Storage Tank Water Heaters

If you want to be more environmentally conscious, consider these energy-efficient water heaters.

Solar Water Tank Heaters

These water heaters use natural sunlight to heat water. A solar water heater system consists of a storage tank that holds water and solar collectors that generate heat. Typically, a solar water heater relies on a traditional water tank in case of an emergency.

Solar water tank systems can be broken down into two types: active systems and passive systems. An active system uses a pump to supply homes with water, while a passive system uses natural convection to circulate water throughout the home. Homeowners can expect to pay around $2,000 for a passive system and $3,000 for an active system. The higher cost is due to the extensive labor and need for a back-up water heater.

Indirect Water Heaters

Indirect water heaters use the energy from an existing furnace or boiler to heat water in the tank. To do this, water from the boiler is circulated into the tank’s coils, heating the water inside. This water heater model is energy efficient, relying on heat created by a boiler or furnace. Although the monthly price of an indirect water heater is low, the initial purchase and water heater installation cost is more expensive than traditional heaters and is priced around $1,500.

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Signs of a Failing Water Heater

If you currently have a water heater, look out for warning signs (such as the ones listed below) that point to a need for a water heater replacement. You can also prevent these issues by maintaining your system with products from reputable companies like Corro-Protec.

  • Discolored or odd-tasting water
  • Water that takes longer than normal to heat or doesn’t heat at all
  • Loud or odd noises coming from your water heater
  • Leaks
  • A hot water heating system that’s older than 15 years

Read more: How to Maintain a Water Heater

Selecting Your Water Heater

When choosing the right water heater for your home, keep these factors in mind:

  • Fuel type and availability—Before selecting a water heater for your home, consider the availability of the necessary fuel type. For example, if you’re looking into a natural gas water heater, check to make sure your property has or can receive a natural gas line.
  • Size of your home—The proper-sized gas tank should be purchased based on the size and amount of people in your home. For example, a household of two needs a 30–40 gallon tank while a four person home needs a 50–60 gallon tank.
  • Cost and energy savings—Weigh the cost of each water heater and its fuel source. While some heaters may have a higher upfront cost, their energy efficiency may save you money in the long run.

Frequently Asked Questions About Water Heaters

How long does it take a new hot water heater to work?

After installation, it takes a gas heater around 40 minutes to fully heat up while an electric heater can take an hour or longer. The time it takes for the heater to start providing your home with hot water also depends on the size and type of water heater.

How many hours a day does a water heater run?

The runtime of a water heater depends on the size, model, and fuel source. Typically a tankless water heater runs around an hour a day, while a tank water heater may run four hours or more. If you notice that your water heater is running more than usual, call a certified plumber to inspect your heater for any problems.

How much does it cost to replace a 50-gallon water heater?

A 50-gallon water heater costs around $1,000 for an electric heater and $1,200 for a natural gas heater of the same capacity.

When You Should Call a Plumbing Professional

If your water heater is experiencing any signs of decline, or unexpectedly breaks down, it’s recommended to call a professional. While you could choose to replace a water heater as one of your home improvement projects, the intense labor and comprehensive knowledge of installing a system makes water heater repairs and replacement a job better suited for a plumber.

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