National tankless water heater installation costs in 2025 typically range from $1,800 to $5,500 for whole-house systems, with gas units averaging $2,700 to $5,500 and electric units averaging $1,800 to $4,200. Total costs depend on fuel type, flow-rate capacity (measured in gallons per minute, GPM), the adequacy of existing infrastructure, and regional labor rates.
What You’ll Learn in this Report
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National Average Installation Cost
Installed totals include equipment, labor, standard venting or electrical connections, permit fees where required, and removal of existing equipment when applicable. Ranges reflect data from U.S. Energy Information Administration equipment cost studies and industry installation surveys.
| Tankless Water Heater Configuration | Typical Installed Cost Range |
|---|---|
| Gas tankless (whole-house) | $2,700 to $5,500 |
| Electric tankless (whole-house) | $1,800 to $4,200 |
| Gas tankless (point-of-use) | $800 to $1,500 |
| Electric tankless (point-of-use) | $300 to $800 |
| High-efficiency condensing gas | $3,200 to $6,000 |
Interpretation note: Lower ranges reflect straightforward installations with adequate existing gas line or electrical capacity. Upper ranges account for gas line upsizing, electrical panel upgrades, complex venting requirements, or premium high-efficiency condensing models.
Cost by Flow Rate Capacity
Tankless water heater capacity measures in gallons per minute (GPM). ENERGY STAR guidance indicates typical fixture demands: showers use 2.5 GPM, clothes washers use 3.3 GPM, bathroom sinks use 2.2 GPM, and dishwashers use 1.3 GPM. Sizing requires accounting for simultaneous fixture use.
| Flow Rate (GPM) | Gas Tankless (Installed) | Electric Tankless (Installed) | Typical Application |
|---|---|---|---|
| 2 to 3 GPM | $800 to $1,500 | $300 to $800 | Single fixture point-of-use (sink or shower) |
| 5 to 7 GPM | $2,700 to $4,000 | $1,800 to $2,800 | One to two simultaneous fixtures |
| 8 to 10 GPM | $3,500 to $5,500 | $2,500 to $4,200 | Whole-house with two to three bathrooms |
| 11+ GPM | $4,500 to $6,500 | Not typically available | Large homes with high simultaneous demand |
Practical note: Cold climate installations require higher GPM ratings to achieve the desired temperature rise. Incoming water temperature affects unit capacity. Undersized units cannot maintain temperature during peak demand periods.
Cost by Fuel Type
Gas and electric tankless systems carry different installation requirements based on infrastructure needs.
| Fuel Type | Equipment Cost Range | Installation Labor Range | Total Typical Range | Key Installation Requirements |
|---|---|---|---|---|
| Natural gas | $1,200 to $3,500 | $1,500 to $2,000 | $2,700 to $5,500 | Gas line capacity verification and potential upsizing, specialized venting systems, combustion air supply |
| Propane | $1,200 to $3,500 | $1,500 to $2,000 | $2,700 to $5,500 | Similar to natural gas, with additional fuel storage considerations |
| Electric | $800 to $2,000 | $1,000 to $2,200 | $1,800 to $4,200 | High-amperage dedicated circuits, potential electrical panel upgrades |
Installation complexity note: Bureau of Labor Statistics data indicates median plumber wages of approximately $30 per hour. Installed labor costs reflect additional factors, including contractor overhead, regional market rates, and project complexity.
Labor and Equipment Breakdown
Installation labor accounts for 40% to 55% of the total cost of standard tankless water heater installations. Complex projects requiring significant infrastructure upgrades tend to have higher labor percentages.
| Installation Component | Typical Cost Range | Time Required |
|---|---|---|
| Standard electric tankless installation (adequate electrical capacity) | $1,000 to $1,500 | 3 to 5 hours |
| Standard gas tankless installation (adequate gas line) | $1,500 to $2,000 | 4 to 6 hours |
| Gas line upsizing (half-inch to three-quarter-inch) | $500 to $1,500 | 3 to 6 hours |
| Electrical panel upgrade and circuit addition | $1,000 to $2,500 | 4 to 8 hours |
| Venting system installation or modification | $400 to $1,200 | 2 to 4 hours |
| Permit acquisition and inspection | $50 to $300 | 1 to 2 days (scheduling) |
Regional variation context: Labor rates vary by market. Metropolitan areas typically trend above national median rates. Rural markets commonly fall below national averages.
Installation Complexity Factors
Multiple variables influence the final cost of installing a tankless water heater beyond base equipment and standard labor.
Tankless vs Tank Water Heater Cost Comparison
Upfront installation costs for tankless and traditional tank technologies.
| Water Heater Type | Typical Installed Cost | Expected Lifespan | Efficiency Range |
|---|---|---|---|
| Tank (electric) | $900 to $2,000 | 8 to 12 years | Energy Factor 0.90 to 0.95 |
| Tank (gas) | $1,200 to $2,500 | 8 to 12 years | Energy Factor 0.60 to 0.70 |
| Tankless (electric) | $1,800 to $4,200 | 15 to 20 years | Uniform Energy Factor 0.96 to 0.99 |
| Tankless (gas) | $2,700 to $5,500 | 15 to 20 years | Uniform Energy Factor 0.82 to 0.96 |
Cost context: U.S. Department of Energy data indicates tankless water heaters last 20 or more years compared to 10 to 15 years for tank models. Tankless units provide 8% to 34% greater energy efficiency, depending on household hot water consumption patterns.
Methodology
Cost ranges compile and normalize data from U.S. Energy Information Administration equipment cost studies (Appendix B residential equipment costs), Bureau of Labor Statistics wage data for plumbing trades, Department of Energy efficiency and lifespan research, ENERGY STAR sizing guidance, and industry installation surveys from Air-Conditioning, Heating & Refrigeration Institute shipment tracking and Northwest Energy Efficiency Alliance installation practice studies. Ranges reflect regional labor rate variation, urban versus rural market differences, installation-complexity tiers, and equipment-efficiency levels. Installed totals assume residential replacement with code-compliant venting or electrical connections, standard permit fees, and removal of existing equipment. Complex installations involving extensive infrastructure modifications may exceed these ranges. Data compiled November 2025.
Sources
U.S. Department of Energy: Tankless or Demand-Type Water Heaters – Efficiency data, lifespan comparisons, technology overview
U.S. Energy Information Administration: Residential Equipment Costs Appendix B – Equipment and installed cost data, efficiency ranges, lifespan data
ENERGY STAR: Whole Home Tankless Gas Water Heaters – Sizing guidance, GPM requirements by fixture, efficiency standards
Bureau of Labor Statistics: Plumbers, Pipefitters, and Steamfitters – Wage data for labor cost context
Air-Conditioning, Heating & Refrigeration Institute: Monthly Shipments – Market data and industry trends
Northwest Energy Efficiency Alliance: Gas Tankless Water Heater Research – Installation practices and market analysis
Consumer Reports: Water Heater Buying Guide – Equipment pricing benchmarks and testing methodology
Notes
Bands are national planning ranges. Local quotes vary with equipment tier, fuel type, installation accessibility, existing infrastructure, permit scope, and regional labor rates.
Gas tankless units often require gas line upsizing from half-inch to three-quarter-inch, adding $500 to $1,500, depending on distance and complexity.
Electric tankless units demand 100 to 150 amps. Homes with 100-amp service frequently need 200-amp panel upgrade,s adding $1,000 to $2,500.
Cold climate installations require higher GPM ratings. Incoming water temperature affects the achievable temperature rise. Northern regions need higher capacity than southern regions to maintain adequate flow.
Proper sizing requires analysis of simultaneous fixture use patterns. Undersized units cannot maintain the desired water temperature during peak usage.
Request itemized estimates separating equipment cost, labor hours and rate, infrastructure work, venting materials, permit fees, and removal charges to enable accurate contractor comparison.
