How Much Do Tankless Hot Water Heaters Cost?

With a tankless unit, water is heated only when you need it.
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Heating water accounts for the second-largest energy usage in the home, with inefficiencies as high as 60 percent, according to the Center for Energy and Environment. Going tankless means hot water doesn’t sit around all day waiting to be used. Instead, water is heated on demand, making these appliances among the most efficient on the market. Current reports from site a 30 percent reduction in energy costs, with savings that increase as your family grows. The cost of your initial investment will depend on several factors.

Choosing a Unit

To determine what tankless unit to buy, consider three things: fuel type, where you want the hot water and how much of it you’ll need. For electric models, take note of voltage, amperage and circuit breaker requirements. For gas models, think about venting and where the existing gas lines run. To determine the size of the unit you'll require, consider future water demands. Tankless systems are sold according to a gallons-per-minute rating, or GPM. This tells you how much hot water the unit can deliver per minute. As a general rule, the more likely you are to have the dishwasher, shower and washing machine running at the same time, the more GPM you’ll need.

Electric Heaters

Starting prices for these models are for single-point units, meaning those that heat water for only one source, such as a bathtub. This can be an affordable way to solve the problem of cold showers, since tankless models never run out of hot water and prices range from $160 to $260 as of publication. Multi-source and whole-house units typically range from $600 to $900 for smaller homes, but others may go for as much as $2,000. For installation, it might be necessary to have a dedicated circuit breaker, and hiring a professional contractor is recommended.

Gas Heaters

Tankless heaters that are gas-fired produce higher flow rates, making them a good choice for high demand households. These units rely on either natural gas or propane, with prices for a medium-sized 7.5 GPM unit ranging from $650 to $900. Expect higher costs associated with installation as compared with standard tank-type heaters. Often the existing gas lines must be re-sized, and fans and additional “category III stainless steel” venting may be required. If the water has to travel too far or your gas lines are too long, you may have to contact an experienced contractor.

Multiple Units

You can design a tankless water heating system that grows with your family. Because these heaters are about the size of a suitcase and are designed to be hung on the wall, it’s possible to accommodate multiple units. According to, installing a tankless heater at each hot water outlet can produce savings of 27 percent to 50 percent.. To keep up with growing and simultaneous hot water demands, you can link two or more units to increase the flow rate, or give each appliance its own unit, especially those with higher GPM requirements such as bathtubs and dishwashers.


Tankless systems are known for their endurance, with expectations of lasting an average of 20 years with the availability of replaceable parts. To get the maximum life out of your model, manufactures recommend flushing the entire unit annually to clear out mineral deposits. This is especially important if you have hard water, as calcium buildup restricts water flow, causing damage and a reduction in efficiency. The process involves pumping two to three gallons of white vinegar or low-grade acid through the system. Hiring a plumbing professional to do this for you will cost $150 to $200, according to estimates current as of the date of publication.

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