A tankless water heater usually runs $2,500–$6,000 installed. The unit itself is often the smaller half of that: converting from a tank is where the money goes, because a gas tankless commonly needs a larger gas line and new venting, and an electric one can need a service upgrade.
What affects the price
Gas vs electric
Gas units heat more water but need adequate gas supply and stainless venting. Electric units are simpler to vent but can demand 120+ amps of dedicated capacity.
Gas line sizing
The most common surprise. A tankless burner can need far more BTU than the old tank, and an undersized line has to be upsized back to the meter.
Venting
Tankless units need their own sealed venting; you cannot usually reuse the old tank flue.
Electrical capacity
Whole-house electric tankless frequently needs a panel or service upgrade, which can cost more than the heater.
Water hardness
Hard water shortens heat-exchanger life and makes annual descaling non-optional; many installers add a softener or scale filter.
Cost breakdown
National-average planning ranges — your local pricing varies by region, scope, and access.
DIY or hire a pro?
A licensed job in nearly every jurisdiction. Gas sizing, combustion venting, and the permit and inspection are not optional, and getting gas line sizing wrong is a combustion-safety problem rather than a performance one.
Estimating this job?
Use the free size a water heater, then turn it into a priced quote your customer can approve with the free estimate generator.
FAQ
Is a tankless water heater cheaper to run?
It uses less energy, because there is no tank of hot water losing heat around the clock. Typical savings are modest in absolute terms — often $80–$200 a year for a household — so the payback comes mainly from the longer service life rather than from the energy bill alone.
How long does a tankless water heater last?
About 20 years with annual descaling, against 8–12 for a tank. That gap is the real economic case. Skip the descaling in hard water and you can lose most of the advantage.
Why does installation cost more than the unit?
Because a straight swap is rare. The tank you are replacing had a smaller gas demand and a shared flue; the tankless usually needs a bigger gas line and dedicated sealed venting, and on the electric side it can need a service upgrade. That retrofit work is the bulk of the bill.
What size tankless do I need?
Size on flow rate and temperature rise, not on household size alone: work out the gallons per minute of the fixtures you want running at once, then the rise from your incoming cold water to your target temperature. Cold-climate homes need a bigger unit for the same fixtures because the rise is larger.