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How Much Does it Cost to Install a Water Heater?

Water Heater Installation Guide

Water heaters play a vital role in every household. These units ensure that water runs hot throughout your home, allowing you to bathe, wash dishes, and do laundry with ease. The Home Depot offers traditional water heater tanks and modern tankless units, both powered by either gas or electricity. Depending on your selection, the average cost for water heater installation is between $1,000 to $3,000. Read below for detailed pricing information so you can feel confident when selecting the water heater that is the best fit for your home and budget.

Tank Water Heaters
Tank Water Heaters

Traditional water heaters feature a tank of stored water that is fueled by gas or electric power. They usually hold between 20 and 80 gallons of water for easy dispersion throughout your home. These units are a lower upfront investment than tankless water heaters but operation and maintenance costs are typically higher. 

New Water Heater Tank and Installation Costs


Average Total: $1,500 

Nationwide costs generally fall within the range of $1,300 to $2,000. This estimate includes the following components: 

  • Basic tank water heater 
  • Permits 
  • Installation materials 
  • Installation labor by a local, licensed and insured plumber 
  • Removal of the old unit 

Note: The Home Depot offers same-day installation at no extra charge.

How Different Features Impact the Cost

The price of a traditional water heater depends largely on its size, as a bigger unit will typically cost more. Units with increased energy efficiency and upgraded features, like hybrid models, may also raise the unit’s price. However, government rebates may be available to help lower the price of a more energy efficient unit. If additional upgrades are required to create space for the new unit and bring the installation up to code, the overall installation cost will increase. 

Energy Efficiency and Money Saving 

ENERGY STAR™ certified models are available for water heater tanks. While tankless water heaters typically cost more upfront, these energy efficient units help lower utility costs and government rebates are often available for high-efficiency units. Ask your trusted Home Depot professional for more information when selecting your new tank unit.

Tankless Water Heaters
Tankless water heaters

Tankless water heaters are also fueled by gas or electricity, but they do not store water within the unit. They are compact and only heat water as needed, making them more environmentally friendly. Tankless water heaters generally require a higher initial investment, but they are less costly to operate and provide additional benefits like endless hot water.

New Tankless Water Heater and Installation Costs 

Average Total: $3,500 

Nationwide costs generally fall within the range of $1,200 to $5,000. Our overall estimate includes the following: 

  • Tankless water heater 
  • Permits 
  • Installation materials 
  • Installation labor by a local, licensed and insured plumber 
  • Removal of the old unit

Factors that Impact the Cost 

The price to install a new water heater will likely be higher if you change fuel sources or switch from a water heater tank to a tankless unit. To lower these additional charges, our trusted professionals will discuss your options and recommend installing your new tankless unit near existing water and fuel sources. This will facilitate ventilation and reduce the amount of extra labor needed. There are a variety of other features that affect the total cost: 

• The cost of the permit

• The amount of work required to bring your plumbing connections up to code 

• The size of your new water heater (measured in gallons) 

• The length of the warranty 

• Energy efficient certification and other special features on the new unit 

Other upfront costs may also be accrued for a tankless model with elite features and a higher efficiency grade. Gas heaters are also historically less expensive than electric heaters to run.

Energy Efficiency and Money Saving

Installing a tankless water heater is a greater upfront investment, but these units can significantly cut the cost of monthly utilities. The U.S. Department of Energy estimates that in homes using 41 gallons or less of hot water, on-demand tankless units can conserve between 24% to 34% more energy than tank water heaters.

Average Installation Price by Region
Average Installation price by region map
Other Considerations

Gas vs. Electric Costs 

Homeowners often ask if a gas water heater or an electric unit is more cost-efficient. The answer depends on your home. While gas models are less expensive to operate, they do require an existing natural gas line. The price tag of an electric water heater is usually lower, but it can be more costly to operate. Electric varieties are also easier to install, and unlike gas units, they are less likely to lose heat. 


Both tank and tankless units come with a manufacturer’s warranty. If you would like to extend this coverage, The Home Depot offers protection plans to further guarantee the quality of your unit and safety of your home. 


Permits are required by most regions in the United States to install a new water heater. Please contact the governing department of your town or city before installation to ensure your paperwork is in order.

Why Choose The Home Depot

If you’re looking for quality and trusted tank water heater installation or tankless water heater installation services, The Home Depot is your one stop shop. We have an excellent selection of tank and tankless models that meet the government’s energy-efficiency standards. By purchasing your unit with us, you’re guaranteed an installation by a licensed, certified professional who has undergone a thorough background check. when you call before 12noon, Monday-Friday and live within 30 miles of a Home Depot branch, we are often able to offer same-day installation on tank water heaters. 

*Please note: all cost estimates have been derived from The Home Depot’s internal sales database and include applicable permit charges.

Let The Homedepot install your water heater