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CostHelper > Home and Garden  > Plumbing & Waterproofing > Tankless Water Heater

Tankless Water Heater Cost

How Much Does a Tankless Water Heater Cost?

average costPoint-of-Use Tankless Water Heater: $120-$350high costCentral Tankless Water Heater: $800-$3,000+
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Also called on-demand or instantaneous water heaters, tankless water heaters provide a continuous supply of hot water and can cost 10%-22% less to operate than tank models, saving up to $70-$80 a year. However, Consumer Reports recommends against[1] buying a tankless water heater just to save on operating costs, estimating it can take 22 years to break even (tankless models last an average of 20 years). However, tankless water heaters remain popular with homeowners because they save energy, take up less space and don't run out of hot water.

Typical costs:

  • A small point-of-use tankless water heater (typically electric) for a single sink/shower can cost $120-$350 for a unit that fits under a sink or in a cabinet and produces 2-2.5 gallons per minute (gpm). For example, the Chronomite SR-40 240v Instant-Flow Electric Tankless Water Heater[2] with a capacity of 2 gpm costs $160-$220. If plumbing or electrical work is needed, installation can add $100-$200, making total costs $220-$550.
  • A central tankless water heater providing hot water for an entire house can cost $800-$3,000 or more, depending on gpm capacity and whether it's gas or electric, plus features like a safety temperature lock or a remote control. (According to the Franklin Institute[3] , brushing teeth can require 1.5-3 gpm and a shower can require 2.5- to 7-gpm, depending on the type of showerhead.) For example, the Noritz NR111 Series Residential Tankless Water Heater with 11.1-gpm capacity can be powered by natural gas or propane, for $1,800-$2,000.
  • Because tankless water heaters require a 220V/240V electrical outlet or larger gas pipes than found in an average home plus a stainless steel ventilation system, installation can add $1,000-$3,000 or more, bringing total costs to $1,800-$4,500.
Related articles: Replacing a Water Heater, Plumber

What should be included:
  • Instead of having to maintain the temperature in a storage tank, a tankless water uses a gas burner or an electric element to heat water as it is needed. If a hot water tap is turned on, water flowing through the tankless water heater activates a sensor that turns on the heating unit; when the water flow stops, the sensor turns off the heating unit. Consumer Reports illustrates how tankless water heaters work[4] .
  • If a faucet or shower is located far from the water heater there can be a short wait as the hot water passes through pipes filled with cold water. For example, if a faucet is 50' from the water heater and water is flowing at 1 gpm, it could take 90 seconds for the hot water to reach the faucet, according to manufacturer Rinnai[5] . Installing several smaller-capacity tankless water heaters rather than one large central one can solve this problem; or some systems use a recirculating pump to maintain hot water in supply pipes.
Additional costs:
  • Many state and local planning departments require a permit and inspection when installing or replacing a water heater, particularly a tankless model. Fees vary by location, but can be $45-$200 or more.
  • Utility bill savings might be less than expected if family members may stay in the shower significantly longer, according to Saving Electricity 101[6] .
  • Do-it-yourself installation is possible with some models, although it can include installing water and vent pipes, and cutting holes in an exterior wall; provides installation instructions[7] , estimating it as a moderately difficult project that takes up to half a day.
  • An energy-efficient tankless water heater may qualify for a federal tax credit[8] . Also ask local utility companies and state energy or resources departments about rebates or tax credits.
Shopping for a tankless water heater:
  • Make a list of how and when water is needed, noting which fixtures and appliances are used simultaneously, like a shower and a dishwasher. Consumer Reports provides a sizing calculator[9] for tankless water heaters, as well as explaining how to calculate water flow[10] per fixture. The Department of Energy offers buying guidelines[11] for tankless water heaters.
  • Major manufacturers include Bosch[12] , Bradford White, Chronomite[13] , Noritz[14] , Rheem[15] and Takagi[16] .
  • Tankless water heaters are also available through home improvement centers like Lowe's[17] or Home Depot[18] and online retailers like Amazon[19] .
  • Ask for and contact references; verify that the company is properly licensed[20] , bonded and insured; search for complaints with the Better Business Bureau[21] .
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