Tankless water heater installation cost dataset

Sizing: flow, temperature rise and output

BTU/h = gallons per minute × 500 × temperature rise, working to an outlet temperature of 110 °F. The 500 is a gallon of water weighing 8.33 pounds times sixty minutes; a BTU raises one pound of water by one degree. This is arithmetic, not an estimate. What is estimated, and declared, is the incoming water temperature of each band.

⚠️ Read that table across, not down. The same flow needs 75% more heat in the north than in the south, and the incoming temperature is a winter figure rather than an annual average. Commercial units are made at 120,000, 150,000, 180,000, 199,000 BTU/h of input, and the model picks the smallest one that covers the requirement after efficiency — it does not round up a size for comfort, because that is a real cost and somebody should choose it knowingly.

Cost by flow and by climate

The gas pipe, the flue and the fuel

⚠️ The gas pipe is the single largest uncontrolled variable: $1,241 between reusing the existing pipe and running a new one from the meter. It is decided by a survey, not by a phone call, and it is the item most often missing when a price is quoted before anybody has visited. The reason is in the product definition: 10 CFR 430.32(d) puts this class above 50,000 BTU/h, while the domestic tank being removed draws around 40,000.

Against replacing the tank with a tank

226% of a tank swap. The tank side comes from our water heater dataset at the same national wage, which is the only reason the ratio is worth quoting. ⚠️ Neither figure contains a running cost, and this site will not publish one: what a conversion saves afterwards depends on local gas and electricity prices and on household hot water use, and none of the three is national or stable.

Line items

74% of the reference total comes from estimated rather than official figures. The reference job is a 4 gpm condensing gas unit replacing a gas storage tank in a mixed climate: a 55 °F rise, 110,000 BTU/h of output, a 120,000 BTU/h appliance and 17 trade hours.

The reasoning behind each figure

Non-condensing gas tankless heaterestimated, ±29%

• Priced per thousand BTU of input, so a 180,000 BTU/h unit lands around $990 to $1,800 for the appliance alone.
• Cheaper to buy and dearer to vent: the exhaust leaves hot, so it needs stainless category III pipe rather than plastic, and that pipe costs several times what plastic does per foot. On a long run the saving disappears entirely.

Condensing gas tankless heaterestimated, ±29%

• Around a third more per thousand BTU than the non-condensing unit, and it usually comes back on the venting: a condensing heater exhausts cool enough for plastic pipe.
• It also produces mildly acidic condensate that needs a drain and, ideally, a neutraliser. That is a line rather than a footnote.
• Federal minimum for this class is a uniform energy factor of 0.81 under 10 CFR 430.32(d); a good condensing unit is well above it.

Electric tankless heaterestimated, ±34%

• Priced per kilowatt of element capacity. The appliance itself is markedly cheaper than a gas one — there is no burner, no heat exchanger and no flue.
• ⚠️ Everything that is saved on the appliance is spent on the electrical supply, and frequently much more than that. This calculator works out the amperage required rather than assuming a unit size, because that number is what decides whether the project is possible at all.

Upsized natural gas pipe and fittingsestimated, ±43%

• Priced by the foot of new pipe. The diameter comes from the flow the appliance needs and the length of the run, and both matter: the same heater needs a fatter pipe at fifty feet than at fifteen.
• ⚠️ This is the line that converts a $2,500 appliance into a $5,000 project, and it is the line a phone quote cannot possibly know about. A gas storage tank draws around 40,000 BTU/h. A tankless is above 50,000 by federal definition and is typically three to five times the tank.

Upsized propane pipe and fittingsestimated, ±44%

• Cheaper per foot than natural gas for the same appliance, and not by a margin anyone should be surprised by: propane carries roughly two and a half times the energy per cubic foot, so the same heat travels through a smaller pipe.
• ⚠️ The saving is real and it is also smaller than what propane adds back on the regulator, so a propane conversion usually lands dearer overall than a natural gas one. The lines are kept separate here so you can see both halves rather than a net figure.

Second-stage propane regulator and tank connectionestimated, ±44%

• A tankless is the largest single draw most propane houses have, and the existing regulator is very often sized for a range and a dryer rather than for this. Sizing it for the peak draw is the difference between a heater that works and one that drops out halfway through a shower.
• ⚠️ Assumes a tank is already there. If it is not, the tank, its pad and its setback from the house are a separate job with its own permit, and no part of it is priced on this page.

Gas fitting, pressure test and purge

• Five hours to run the pipe, make the connections, pressure-test the system and purge it, and eight when the run comes all the way from the meter.
• Also includes verifying that the whole system still works: adding this load can starve a furnace or a range at the far end of the same pipe, and that is checked rather than assumed.

Sealed plastic intake and exhaustestimated, ±46%

• Two pipes: a condensing heater draws its combustion air from outside and pushes the exhaust back out, both sealed, both in plastic.
• ⚠️ It cannot use the old chimney. A tankless heater has a fan and a sealed combustion chamber, and the masonry flue the tank vented into is neither the right size nor the right kind of thing.

Stainless category III ventingestimated, ±45%

• A non-condensing heater exhausts too hot for plastic, so the vent is sealed stainless — several times the price per foot.
• This is why the cheaper appliance is frequently the dearer installation, and why the choice between condensing and not is really a choice about the vent rather than about efficiency.

Running the vent and making the penetration

• Three hours out through a nearby wall; six up through the roof, where the penetration has to be flashed so that it stays watertight for the life of the roof.
• The termination point is not free choice: it has to clear windows, air intakes and walkways, and finding a legal one is occasionally what dictates where the heater goes.

Condensate drain and neutraliserestimated, ±50%

• A condensing heater makes mildly acidic water whenever it runs. The neutraliser is a canister of limestone chips in the drain line: cheap, frequently skipped, and skipping it is what eats a cast iron waste stack from the inside.
• Where there is no drain below the appliance this becomes a pump as well, which is a moving part in an otherwise static installation.

Water connections and pressure reliefestimated, ±45%

• Reconnecting the hot and cold sides to a wall-hung unit that is rarely where the tank stood, plus the relief valve and its discharge.
• A tankless is physically much smaller than a tank, so the pipework almost always has to be extended or re-routed even when the heater stays in the same room.

Isolation valves for descalingestimated, ±46%

• A pair of service valves with hose ports, which is what lets the heater be flushed with descaling solution without cutting anything.
• ⚠️ Not optional in the way it looks. A tankless heater passes all your water across a narrow heat exchanger, so scale builds where it does most harm. In hard water it wants doing annually, and a unit fitted without these valves means paying a plumber to cut pipes every time. It is the cheapest line here and the one that decides the appliance’s life.

Dedicated circuit for the heaterestimated, ±48%

• Even a gas tankless needs mains power: it has a fan, an igniter and a control board, and it wants its own circuit rather than sharing.
• A gas storage tank often needs no electricity at all, which is why this line surprises people converting from one. It is also why a gas tankless stops working in a power cut and a standing-pilot tank does not.

Feeders and breakers for an electric tanklessestimated, ±54%

• Multiple heavy feeders — a whole-house electric tankless is normally fed by two or three separate double-pole breakers rather than one.
• ⚠️ This band assumes the panel has both the space and the capacity, which at these currents is a very strong assumption. Where it does not, a service upgrade is a separate job on our electrical panel page, and it is frequently larger than everything on this one.

Electrical work

• Two hours for a gas unit’s dedicated circuit; seven for the multiple heavy feeders an electric one needs.

Removal, mounting and commissioning

• Seven hours: drain and remove the old tank, mount the new unit on the wall, connect it, fire it and set the temperature.
• Draining a full tank is slower than it sounds and a sixty-gallon tank full of sediment is heavy and awkward on a basement staircase.

Disconnect and make safe the old 240 V circuit

• An hour and a half. Coming off an electric tank leaves a 30 amp circuit feeding nothing: it is disconnected at the panel, the breaker comes out and the cable is capped or pulled back.
• Small money and worth naming, because a live cable ending in a junction box behind an appliance that is no longer there is exactly what an inspector looks for. The upside is a freed breaker space, which matters if the panel is full.

Old tank removal and disposalestimated, ±49%

• Tipping fee less the scrap value of the steel, which is why the bottom of the band is low.

Plumbing, gas and mechanical permitsestimated, ±56%

• Frequently more than one permit here, because the job touches gas, water, venting and electrics.
• The inspection is also the only independent check on a new gas line and a new flue, which on a combustion appliance inside a house is not a formality.

Not included in this dataset

An electrical service upgrade

Every figure assumes the panel has room and capacity. For an electric tankless at these currents that is a strong assumption, and where it fails the upgrade is priced on our electrical panel page and is often larger than this whole job.

A larger gas meter

If the meter itself cannot deliver the total load, the utility replaces it, on their schedule and sometimes with their own charge. Worth one phone call before collecting quotes.

A water softener

In hard water a softener extends the life of a tankless heater considerably, and it is a separate appliance with its own price. It is on our water softener page.

A recirculation loop

The pump and return pipe that make hot water arrive quickly at a distant tap. Frequently wanted alongside a tankless and priced separately, because in an existing house the return pipe is the expensive part.

Annual descaling

Not in the figure and not optional in hard water. The isolation valves priced here are what make it a cheap job rather than an expensive one.

A like-for-like tank replacement

If you are replacing a tank with a tank, this is the wrong page — that is priced on our water heater page, and it is a fraction of anything here.