Tankless water heaters, AKA instant or on-demand or water heaters, continue to soar in popularity among homeowners nowadays.
It presents several advantages over traditional tank-style water heaters, which makes it a good new long-term investment to consider. For one, the operation of tankless water heaters present substantial energy efficiency and cost savings in the long run.
Unlike the standard tank-style units, which always heat and reheat water, tankless water heaters offer instant warm water through high-powered gas burners and electric coils. It does require more power for the most part, but since it doesn’t need to reheat the water as often, you end up using less energy overall.
The US Department of Energy claims that tankless water heaters are up to 8 to 50% more efficient than their tank-style counterparts– with the total efficiency rate dependent on the amount of hot water you use daily.
If you’re wondering how much it costs to install a tankless water heater at home– the expenses start at $920 to $4,025 on average.
However, like any other product– tankless water heaters have their pros and cons to consider. Let’s discuss the downside of a tankless water heater to decide if this relatively new water system is the right choice for your home needs.
Tankless Water Heater Cost Overview
Installing a tankless water heater at home starts from $920 to $4,025. Units that run on a gas or electric on-demand system are priced at $345 to $2,415 for the labor costs.
In a year, tankless water heaters help you save an average of $47 to $230 by reducing your usual energy costs by up to 8% to 34%.
In contrast, gas-powered tankless water heaters will cost you more at $800 to $5,300. If you have an existing residential tank water heater and want to switch to a tankless unit, this will cost you around $920 to $4,025.
The total expenses will depend on your chosen brand, flow rate, and the unit’s fuel source. Refer to the table below for a quick rundown of the different fuel types of water heaters and their average installation costs. (Related: Are High-Efficiency Water Heaters Worth It? A Cost & Savings Analysis)
Average Installation Costs
Gas Powered Heater
$800 - $5,300
Electric Powered Heater
$600 - $2,500
Propane Powered Heater
$800 - $5,300
Tankless Water Heater Key Insights:
What is a Tankless Water Heater?
To fully understand how a tankless water heater system works, you need to grasp how a standard water heater function.
A standard tank-style water heater uses a large tank to store and heat the water accordingly. It continuously heats the water to maintain the warm temperature around the clock– giving you hot water when you need it.
Even if you’re not using hot water, the system continues to use (and lose) energy. In contrast, tankless water systems lack the typical large storage tank. But it is notably more energy-efficient as heating water will only be done on an “on-demand” basis using high-powered burners through a heat exchanger.
What are the Advantages and Disadvantages of a Tankless Water Heater?
It is ideal to fully understand the pros and cons of installing a tankless water system at home to make an informed decision.
Pros of Tankless Water Systems
The most significant selling point of tankless water systems is their energy efficiency. These units use less energy than standard tank-style systems to cut billing costs by up to 40%.
In a year, this may add up to $115 in savings on average. Additionally, tankless water heaters are known for their longevity– lasting for around two decades.
Cons of Tankless Water Systems
So, what is the downside of a tankless water heater? Although these units are known for their longevity and energy-saving features– these heaters have higher upfront costs.
The unit itself will cost you somewhere around $920 to $1,150, while their tank-style counterparts only cost $450 to $750.
That said, expect the installation cost to be more expensive as well.
Tankless water heaters are a great choice if you’re tired of running short of hot water when you need it. Also, no more having to wait more than 20 minutes for warm shower water!
Not to mention, these units are compact, highly efficient, and space-saving.
If you’re planning to replace your old, tank-style water heaters or you need to install a new water heating system at home, talk to a professional plumber or technician to know if a tankless water heater fits your home needs.