How to Figure the Cost of Replacing a Water Heater

Unit price and labor fees together determine a water heater’s replacement cost.

Unit price and labor fees together determine a water heater’s replacement cost.

Water heaters can account for up to 14 percent of a typical household’s energy consumption, according to Lowe’s “Water Heater Buying Guide.” A hot water heater’s service life is normally eight to 12 years. Therefore, choosing the most efficient and best model is a vital decision. Selecting the most efficient hot water heater for your house is a major decision. There are several factors involved in the total replacement cost. This includes the fuel type, style, size and whether you can replace the water heater yourself.

Determine which heater fuel option you prefer such as gas or electric. Electric water heaters usually cost less than gas models. Gas heaters normally cost less to run, but require venting. Selecting the same type typically keeps down the overall cost because switching requires installing the new power source.

Decide the capacity required dependent on the household’s demand for a conventional tank water heater. A 30-gallon capacity water heater works well for up to two people, a 40-gallon up to three people, and 50-gallon and above for four or more people.

Consider a tankless water heater, if you’re more concerned with energy consumption and don’t mind a larger up-front cost. This type heats the water as needed but is not recommended for households’ with heavy usage unless more than one unit is installed.

Narrow your selections to fit the space available. Consider the hot water heater’s dimensions compared with its location unless you plan to modify the place of the hot water heater in your home.

Decide whether you can replace the hot water heater yourself or need to hire a professional. If you are not familiar with plumbing, electrical work or gas piping and are not physically capable of lifting and moving a water heater, hire a professional. It typically requires at least two hours labor for a professional when swapping out similar water heaters. The time and cost increases if any additional piping, venting or site modifications are needed.

Add the price of the hot water heater you choose with the installation fees to determine the total replacement cost.


  • Compare water heater prices at various retail outlets, such as Sears, Home Depot, Lowe’s and reputable local appliance stores to find the best deals.
  • Consider using the same store where you purchased the hot water heater for replacing the unit, if you determine you need a professional installation. These places often cost less than hiring an outside professional because they are selling the water heater also.


  • Only use licensed and reputable professionals.

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About the Author

Diane Dilov-Schultheis has been writing professionally since 2000. She is a food and travel writer who also specializes in gaming, satellites, RV repair, gardening, finances and electronics. She is a member of the Society of Professional Journalists and has been published online at the Travel Channel and Intel.

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