How Much Does a Water Heater Replacement Cost in 2024?

Water Heater Replacement Cost Factors

Several factors influence the final price of replacing a water heater, such as the unit type, size, fuel type, and brand. 

Type

There are several different kinds of water heaters, each with unique advantages and drawbacks. The final cost of replacing your unit varies significantly depending on the type of heater you choose.

Size

Another major price driver of installing a new water heater is the size of the unit. Depending on your household’s hot water needs, you may need a large tank, impacting the cost of replacing your water heater. Tank sizes range from 20 gallons to more than 100, though 40-gallon tanks are the most common.

Fuel Type

The price of a new water heater can rise significantly depending on the type of fuel it uses, especially if new infrastructure needs to be installed in your home to supply the unit. Natural gas, propane, and electric heaters cost about the same on the low end, starting at around $600 for the most basic options. Expect to pay as much as $3,500 for a high-end electric water heater, not including installation or electrical work. 

Propane and natural gas water heaters can save you money on your utility bill but cost more upfront than an electric unit if you don’t have the necessary gas lines installed. Paying to run gas or electricity to a water heater after switching fuel types significantly increases the cost. This should be considered when calculating the energy savings of a new type of water heater.

Energy Efficiency

Switching to a more energy-efficient water heater is a great way to reduce your monthly utility bills. The unit eventually pays for itself over time. However, these energy-efficient units cost more upfront, especially if you’re looking into special types of water heaters, such as solar or geothermal-powered units. High-efficiency electric units start around $1,500 for basic units. Larger ones cost about $3,000, and solar water heaters cost as much as $5,500.

Brand 

The brand of your water heater affects the final price of your replacement. Some brands cost more to maintain, which is important to consider when estimating future water heater repair costs.

Location 

The water heater’s location in your home adds a fair amount to the final installation cost. If your local water heater installer needs to move the unit up and down several flights of stairs or into a tight area, this will increase the labor costs of water heater installation. 

Additional Water Heater Replacement Cost Factors

Beyond the basics, there are a few extra costs of replacing a water heater you should consider when budgeting. These include labor costs, permits, and if you’re replacing or relocating a unit.

Labor

Labor makes up much of the cost of replacing a water heater. You’ll likely need to hire both a plumber and an electrician. Generally, you can expect labor costs to make up 50% of the project’s total cost. Plumbers usually charge between $45 and $200 per hour, while most electricians charge between $50 and $100 per hour.

For labor alone, expect to pay between $150 and $450 to replace a tank-style water heater, between $600 and $1,850 for a tankless unit, and as much as $2,500 to convert an existing tank system to a tankless one.

Permits

Depending on the amount of work required and the local rules about work permits, you’ll pay between $25 and $300 for a permit to replace your water heater. This covers the permits needed to install a gas appliance or to alter plumbing and electrical systems. If you need to connect your new water heater to natural gas, you’ll need a special permit, which can cost another $50 to $300.

Vent Type

Electric water heaters usually don’t need venting. However, propane or natural gas water heaters require direct venting or powered venting, which can impact your final costs. Direct-vent heaters work with passive venting, meaning no extra electricity is needed for the air exchange. If you opt for a power-venting system, you can expect to pay $600 to $1,100 more for the power-vent unit and the necessary electrical work.

Replacement

If you’re simply replacing your old water heater with one of a similar type and size, you don’t have to pay extra costs for a different or larger unit. However, you’ll need to pay replacement costs, which include $100 to $500 to remove the old unit, the cost of the new unit, and labor.

Expansion Tank

Water expands when it freezes or heats up. If the water heater system isn’t properly set up for this expansion, it can cause serious damage to your plumbing and home. To avoid this, many homeowners add an expansion tank to take the pressure off the system. This usually adds between $90 and $350 (plus additional labor) to the cost of replacing a water heater.

Relocation

Water heater relocation costs range between $150 and $3,400, depending on the complexity of the move and whether new electrical lines, gas supply, or ductwork need to be installed at the new location.

Tank vs. Tankless Water Heater Costs

Most homes use a tank-style water heater, which stores a certain amount of water in a built-in reservoir and keeps it constantly heated for use in the home. However, many homeowners are switching to tankless water heaters, which heat water on demand so you never run out of hot water. 

Tank water heater systems come in a range of sizes—usually between 20 and 100 gallons—and are quick and relatively inexpensive to install. Depending on their size, fuel type, and brand, the units range between $600 and $2,500.

Tankless water heaters cost around $1,200 to $3,500 for the unit and installation. This is more expensive in the short term, but tankless water heaters offer superior energy savings over their lifespan. However, tankless water heaters usually cost more to repair and maintain. Unlike a typical tank water heater repair, which costs between $100 and $500, repairing a tankless system costs between $220 and $975, depending on the issue.

Water Heater Replacement vs. Repair

A new water heater can cost thousands, so it’s a good idea to look into repairing your existing unit before buying a new one. Depending on your unit type and the issue, a repair can cost as little as $100 or as much as $1,300. Fortunately, water heater repairs are often simple and inexpensive. Replacing a faulty gas valve—one of the most common repairs—costs $100 to $250 for labor, plus the small cost of the new valve.

Generally, a tank-style water heater lasts six to 15 years with regular maintenance. If your unit is older than that, it might be time to start looking into replacing it. Tankless water heaters last longer—20 years or more when cared for properly.

If you notice any of these issues, call a water heater professional to determine whether your unit needs to be repaired or replaced:

• Discolored water from taps

• Water only getting tepid or lukewarm

• Metallic taste in water

• Unexplained rising utility costs

• Water leaking or pooling below your water heater

• Loud, unusual noises coming from the water heater (e.g., banging, popping, grinding, rumbling)

• Frequently running out of hot water with normal use

Does a Water Heater Replacement Increase Home Value?

Installing a conventional, tank-style water heater provides little, if any, increase to your home value. It’s always good to know that the water heater is relatively new and won’t need replacing or significant repairs soon, but these units have a limited ROI in terms of increasing home value. 

On the other hand, installing a more advanced water heater, such as a tankless system, can greatly increase your home’s value thanks to its energy savings and long lifespan. Tankless water heaters can be 24% to 34% more energy efficient than a tank system, which makes them a great way to boost home value.

Budgeting for a Water Heater Replacement

Replacing a water heater is inevitable if you own a home for long enough. Here are a few ways to reduce the cost of this important task:

• Whenever possible, repair your water heater instead of replacing it. Even the most expensive repairs cost less than replacing the unit.

• Save money on utility hookups by using the same type of fuel source for your new water heater. If you’re already using an electric heater, the project will cost less if you install another electric unit rather than a propane or natural gas-powered one.

• Consider future energy savings and balance them against upfront costs to make the overall best financial decision.

• Look into local discounts, rebates, and incentives for energy-efficient water heaters to help offset the costs of more expensive units.

• Make sure your heater and pipes are well-insulated to improve energy efficiency and reduce expensive heat loss.

How HomeAdvisor Gets Its Cost Data

No place is more important than your home, which is why HomeAdvisor connects homeowners with local pros to transform their houses into homes they love. To help homeowners prepare for their next project, HomeAdvisor provides readers with accurate cost data and follows strict editorial guidelines. We surveyed over 30,000 real customers about their project costs to develop the pricing data you see, so you can make the best decisions for you and your home. We pair this data with research from reputable sources, including the U.S. Bureau of Labor Statistics, academic journals, market studies, and interviews with industry experts—all to ensure our prices reflect real-world projects.