How Much Does a Tankless Water Heater Cost?
A tankless water heater runs about $2,500 installed in 2026 — $1,400–$3,000 electric, $2,100–$4,500 gas. What drives the number, and why switching from a tank adds $3,000+.
$1,400–$4,500 installed
Planning average: ~$2,500
What a tankless costs at each tier
Representative types, not specific listings. Installed prices; the unit alone is cheaper.
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Use the serial number to estimate its manufacture date and age.
Check water heater age →A tankless water heater costs about $2,500 installed in 2026, with a typical range of $1,400 to $3,900. Electric whole-house units run $1,400 to $3,000; gas units $2,100 to $4,500 when the gas line and vent are reusable. The unit itself is only a third to a half of that — labor, venting, and gas or electrical upgrades are the rest, and a first-time switch from a tank adds $3,000 or more.
This is for a homeowner pricing a new tankless unit, whether that is a replacement for an old one or a first switch from a tank. If you are still deciding whether tankless is the right call at all, start with tank vs tankless.
How much does a tankless water heater cost?
$2,500 on average, and $1,400 to $3,900 for most installs (NerdWallet; Bob Vila puts the national average at $2,527) — see the cards above for the tier breakdown. The one number those cards don't cover: a first-time conversion from a tank runs $3,000 to $5,500, because it needs a new gas line, venting, and sometimes an electrical upgrade on top of the unit itself — a straight tankless-for-tankless swap doesn't carry that premium.
What does the unit alone cost?
$600 to $2,400 for a whole-house unit, before installation (HomeGuide):
- Whole-house electric: $500–$1,000 (EcoSmart, Stiebel Eltron, Rheem)
- Whole-house gas: $1,000–$2,400 — condensing models (Rinnai, Navien, Rheem, Bosch, Takagi) sit at the top, and are the ones worth buying because they vent in PVC and squeeze more heat out of the gas
- Point-of-use electric: $150–$450 for a single-fixture unit
The unit is 30–50% of the total install. The rest is what it takes to feed and vent it.
How much does installation cost?
A plumber charges $600 to $1,900 in labor, and the job takes about three hours for a straightforward replacement (NerdWallet). What pushes it higher:
| Scenario | Added cost | Why |
|---|---|---|
| Like-for-like tankless replacement | baseline | Reuse the gas line, vent, and mount |
| Gas line upsize | $500–$1,500 | A tankless burns gas far faster than a tank; the old line is often too small |
| New stainless venting (gas) | $300–$1,000 | A tankless needs its own sealed venting, not the tank's flue |
| Electrical subpanel / service upgrade (electric) | $1,000–$2,000 | A whole-house electric unit draws 80–150 amps |
| Old unit removal and haul-away | $500+ | Some installers include it — ask |
| Permit | $50–$300 | Most areas require one for a water heater |
How much more does it cost to switch from a tank?
$3,000 to $5,500 all in for a first-time gas conversion — roughly $1,500 to $2,000 more than swapping one tankless unit for another. A tank releases heat slowly over hours; a tankless does it all at once, so it needs more gas or more amps than the line feeding your old tank was ever sized for. That is the single reason conversions surprise people on price.
Replacing an existing tankless with another one skips all of that and lands back in the $1,400 to $3,900 range.
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Shop now →How much is a tankless water heater for a 2,000-square-foot house?
$3,000 to $4,500 installed for gas. A 2,000 sq ft home is usually two to three bathrooms, which needs an 8–10 GPM gas unit or a large electric one:
| Home | Flow rate needed | Unit type |
|---|---|---|
| 1–2 bathrooms | 6–8 GPM | Mid-size gas, or a large electric |
| 2–3 bathrooms | 8–10 GPM | Full-size gas |
| 3+ bathrooms | 10+ GPM | Large gas, or two units |
Cold-climate homes need a bigger unit for the same number of fixtures, because the incoming water is colder and the heater has to raise it further.
Gas or electric: which costs less?
Electric costs 30–40% less to install — $1,400 to $3,000 versus $2,100 to $4,500 for gas — because there is no gas line and no venting. Gas wins on flow rate: a gas unit delivers 8–11 GPM, an electric whole-house unit typically 4–8, so gas handles simultaneous demand better in a larger home.
The catch on electric is the panel. A whole-house electric tankless pulls 80–150 amps, and most homes do not have that spare capacity, so a subpanel or a service upgrade ($1,000–$2,000) is common and can erase the install saving.
What does a tankless water heater cost to run?
About $200 a year for gas, and roughly $80 to $100 a year less than a comparable gas tank (Bob Vila). Per the U.S. Department of Energy, a tankless unit is 24–34% more efficient than a tank for a home using 41 gallons or less of hot water a day, and 8–14% more efficient for a heavy-use home around 86 gallons a day.
An electric whole-house tankless costs about the same to run as an electric tank in most of the country. Add an annual descale either way — $100 to $200 from a plumber, or $50 to $80 for a DIY kit and an hour.
If you are replacing on age rather than a failure, check your current heater's build year first — the serial number carries the date, and a unit under 8 with a small fault is often worth fixing instead.
Are there rebates or tax credits?
Not from the federal government for a 2026 install. The 25C tax credit that covered up to $600 for an ENERGY STAR gas tankless applied only to units placed in service before 31 December 2025. What remains:
- State HOMES and HEAR programs — HEAR is income-qualified and can cover a large share of an electric unit
- Local utility rebates — commonly $100 to $500
Check your utility's website and your state energy office before you buy.
How to keep the cost down
- Replace with the same type if you already have a tankless — it is the $1,400 to $3,900 job, not the $3,000+ conversion.
- Don't convert from a tank unless you have a reason — endless hot water, reclaimed space, or an open remodel. The energy saving alone does not pay for it. Tank vs tankless walks the decision; what a straight tank replacement costs is the comparison.
- Buy the unit yourself and pay a plumber for labor only.
- Get two or three quotes — tankless install pricing varies more between contractors than almost any other home job, largely because they price the gas and venting work differently.
Shop water heaters: tankless and heat pump
Ships straight to your door — no contractor visit needed to order.
- ENERGY STAR certified heat pump water heaters
- As featured in Popular Mechanics, Entrepreneur, Business Insider and the Chicago Tribune
We may earn a commission if you use this link. How this works
Shop now →Frequently Asked Questions
How much does it cost to install a tankless water heater?
About $2,500 on average in 2026, with most installs landing between $1,400 and $3,900. Electric whole-house units run $1,400 to $3,000 installed; gas units $2,100 to $4,500 when the gas line and vent are reusable. Labor is $600 to $1,900 of that, and a first-time switch from a tank adds $3,000 or more once a bigger gas line, venting, or an electrical upgrade is in.
What is the downside of a tankless water heater?
Cost and upkeep. It is 2–3 times the upfront price of a tank, the retrofit from a tank often needs a gas-line or electrical upgrade, it needs an annual descale in hard water or the flow rate and warranty both suffer, and it makes no hot water in a power cut. A repair also costs more because the unit is electronic.
How much is a tankless water heater for a 2,000-square-foot house?
A 2,000 sq ft home is usually 2–3 bathrooms, which needs an 8–10 GPM gas unit or a large electric one. Budget $3,000 to $4,500 installed for gas, or $2,000 to $3,000 for electric — plus the conversion premium if you are coming off a tank. Cold-climate homes need a bigger unit for the same flow because the incoming water is colder.
Can I replace my 40-gallon water heater with a tankless?
Yes, but it is a conversion, not a swap. A gas tankless usually needs a larger-diameter gas line and new stainless venting; a whole-house electric one needs heavy dedicated circuits and often a panel upgrade. Expect $3,000 to $5,500 all in for a first-time gas conversion. Replacing an existing tankless with another is far cheaper.
Is a tankless water heater cheaper to run?
A gas tankless costs roughly $200 a year to run and saves about $80 to $100 a year versus a comparable gas tank, because there is no standby loss. An electric whole-house tankless costs about the same to run as an electric tank in most of the country. The savings are real but small — they do not pay back the install on their own.
Is there a federal tax credit for a tankless water heater in 2026?
No. The 25C Energy Efficient Home Improvement Credit that covered up to $600 for an ENERGY STAR gas tankless applied only to units placed in service before 31 December 2025. For a 2026 install, check state HOMES and HEAR rebate programs and your local utility — utility rebates of $100 to $500 are common, and HEAR (income-qualified) can cover a large share of an electric unit.
Sources
- NerdWallet — Water Heater Cost in 2026 — tankless $1,400–$3,900 installed; labor $600–$1,900; tank-to-tankless conversion labor up to $2,500
- Bob Vila — How Much Does a Tankless Water Heater Cost? — national average $2,527 (range $1,333–$3,721); single-point electric unit ~$450; whole-house gas unit $1,500+; gas line up to $1,000; old-unit removal $500+; running cost ~$200/yr gas, ~$80–$100/yr saved vs a tank
- HomeGuide — Tankless Water Heater Installation Cost (2026) — electric whole-house $1,400–$3,000 installed; gas whole-house $2,100–$5,600; whole-house unit $600–$2,600; point-of-use unit $150–$250
- U.S. Department of Energy, Energy Saver — Tankless or Demand-Type Water Heaters — 24–34% more efficient than a tank for homes using ≤41 gal/day, 8–14% for ~86 gal/day; 20+ year life
- IRS — Energy Efficient Home Improvement Credit (25C) — credit allowed for property placed in service before 31 Dec 2025 — not available for 2026 installs
The Water Heater Series
- 1How Old Is My Water Heater? Reliance, Rheem and Other BrandsDecode the serial number and see where it sits against a typical lifespan.
- 2How Long Does a Water Heater Last?Tank vs tankless, what changes as it ages, and the one cheap part that decides it.
- 3How Much Does It Cost to Replace a Water Heater?Installed cost by type, what a plumber charges, and the code add-ons that push the quote up.
- 4Should You Repair or Replace a Water Heater?The 50% rule, which faults are a cheap part, and which mean the tank is done.