What are expert tips for water heater installation costs?

Get at least three quotes from licensed plumbers. Prices for the same job can vary by 50% or more. Ask if the quote includes permit fees, old unit disposal, and any code-required upgrades like expansion tanks. If you're buying the unit yourself, check whether the plumber's labor warranty covers units they didn't supply. Some do, some don't.

Water Heater Installation Costs

Installation Guide Reference guide Reference guide See breakdown below

Created by Ryan Pietrzak Illinois Licensed Plumber · In the plumbing industry since 2009

Updated February 20, 2026

Key Takeaway

Water heater installation costs vary wildly depending on the type, fuel source, and whether you're doing a like-for-like swap or a conversion. We see homeowners get sticker shock when they're quoted $3,000+ for a tankless install, not realizing that most of that cost is the infrastructure work -- not the unit itself. Here's what actually drives the price.

Overview

What to Know

Tank Water Heater Swap (Same Fuel)

This is the most affordable scenario. The unit costs $400-$1,200 for a standard 40-50 gallon tank. Installation labor runs $300-$800. Total installed: $700-$2,000. Most of the labor is just disconnecting the old unit, setting the new one, and reconnecting the same water, gas/electric, and vent lines.

Tankless Installation (New)

A tankless unit itself costs $800-$2,500. But the installation is where costs jump. Gas tankless needs a larger gas line ($200-$600), new venting ($200-$500), and often electrical work for the control board ($100-$200). Total installed: $2,000-$5,000. Electric tankless may need panel upgrades ($500-$2,000). Total: $1,500-$4,500.

Fuel Type Conversion

Switching from gas to electric or vice versa adds the cost of running new utility infrastructure. Gas-to-electric: new 240V circuit from the panel, possibly a panel upgrade. Electric-to-gas: new gas line run from the meter, plus venting. Either conversion adds $500-$2,000 to the base installation cost.

What Drives Cost Up

Code upgrades (expansion tank, seismic straps in earthquake zones, drain pan), difficult access (tight closets, attics), old plumbing that needs updating, and permit fees all add to the bottom line. An expansion tank alone is $40-$100 for the part plus installation.

DIY Savings

A like-for-like tank swap done DIY saves $300-$800 in labor. But permits still apply in most areas, and some jurisdictions require a licensed plumber for gas connections. Check before you start.

Pro Tips

Get at least three quotes from licensed plumbers. Prices for the same job can vary by 50% or more.
Ask if the quote includes permit fees, old unit disposal, and any code-required upgrades like expansion tanks.
If you're buying the unit yourself, check whether the plumber's labor warranty covers units they didn't supply. Some do, some don't.

Bottom Line

A standard tank swap runs $700-$2,000 installed. Tankless conversions run $2,000-$5,000. The biggest cost driver isn't the unit -- it's the infrastructure work. Get multiple quotes and make sure they include everything.