A water heater failure is one of the most common home emergencies -- and one of the more expensive plumbing replacements. Whether yours is leaking, not heating, or just old, this guide gives you real installed cost numbers so you know what to approve and what to push back on.
Tank vs. tankless: what's the real cost difference?
The choice between tank and tankless is partly about upfront cost and partly about long-term savings. Here's how they compare installed (unit + labor + any permit fees):
- ✓40-gallon gas tank: $800--$1,400
- ✓50-gallon gas tank: $900--$1,600
- ✓40-gallon electric tank: $700--$1,200
- ✓Tankless gas (whole home): $1,500--$3,500
- ✓Tankless electric (whole home): $800--$2,000
- ✓Heat pump water heater: $1,200--$2,800
What's included in the installation cost
A proper water heater installation includes removing and disposing of the old unit, installing the new unit with all proper connections (gas line, water lines, pressure relief valve, expansion tank if needed), testing for leaks, and in many jurisdictions pulling a permit and scheduling an inspection. If the quote you received doesn't include all of this, clarify before you accept it -- disposal fees alone can run $50--$100.
Signs you need a replacement vs. a repair
Not every water heater problem means a full replacement. But these symptoms usually do:
- ✓The unit is 10+ years old (tank) or 15+ years old (tankless)
- ✓There's rusty water or visible corrosion on the tank
- ✓Water is pooling around the base -- tank is likely cracked
- ✓The relief valve keeps discharging
- ✓Heating elements have failed multiple times
- ✓Repair estimate is more than 50% of a new unit cost
Rebates and tax credits
Heat pump water heaters currently qualify for a federal tax credit of up to $600 under the Inflation Reduction Act (through 2032). Many utility companies also offer rebates of $100--$400 for efficient units. Ask your installer about any rebates available in your area before choosing a unit -- they can meaningfully reduce your net cost.
Bottom line
A tank water heater replacement is a half-day job for a qualified plumber. Expect to pay $800--$1,600 installed for a standard gas or electric tank unit. Get the quote in writing and make sure it covers disposal, permit, and all connection work -- not just the unit itself.
Need plumbing work done?
Novum sends its own licensed crew. Flat upfront quote before we touch anything.