How Much Does It Cost to Replace a Water Heater?

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Water heaters are important as a source of hot water for bathing, washing clothes, washing dishes and cooking. It’s time to replace a water heater when it has reached the end of its life or is no longer working properly. The average cost of replacing a water heater ranges from $848 to $1,709. Labor costs for water heater replacement projects range from $45 to $150 per hour.

The cost of replacing a water heater varies and depends on factors such as the type of water heater, fuel source, and tank volume. New gas lines or tankless models increase project costs.

Water heater replacement cost by type

water heater type

replacement cost


$975 to $2,400


$1,200 to $4,250


$600 to $2,700


$600 to $3,500

Tank vs. tankless

When replacing a water heater, you must decide whether you want a tank water heater or a tankless water heater. The average cost of replacing a water heater ranges from $975 to $2,400, which translates to an average price of $1,700. The average cost to replace a water heater starts at $1,200 and tops out at $4,250 for an average of $2,750.

Tank or storage tank water heaters centralize water heating in one location, e.g. a storage closet, pantry, garage or basement. Cold water is heated by a gas flame or an electric heating coil, both located at the bottom of the tank. Storage water heaters are expected to last around 10 to 15 years.

Water heaters heat water on demand. There is no storage tank. Turning on the hot water tap activates the flow heater. Gas or electricity heats the water to ensure a constant flow of hot water. Although the flow is constant, the performance is lower than that of water heaters with storage. Instantaneous water heaters are expected to have a service life of 20 years or more.

Gas and electric heaters

Most water heaters run on either natural gas or electricity. Both fuel sources have their pros and cons, but typically the choice will be determined by the type of fuel the existing water heater uses. Gas water heater replacements cost anywhere from $600 to $2,700, which averages out to about $1,650. Electric water heater replacements cost anywhere from $600 to $3,500, for an average price of around $2,100.

The story goes on

Gas water heaters burn municipal natural gas at the bottom of the storage tank or inside the tankless unit. Unburned gases must be vented for safety reasons. At a cost of about $30 per month, gas water heaters are cheaper to run than electric water heaters.

Many communities are replacing gas water heaters in favor of electric water heaters. Check your local news sources or legal information to see if gas water heaters are or will be banned in your area.

Electric water heaters use a heating element at the bottom of the tank that is powered by a dedicated 240 volt circuit with a 30 amp double pole circuit breaker. Electric water heaters are clean and neither tank nor instantaneous water heaters require venting. This makes electric water heaters ideal for apartments, condos, or other residences where venting to the outside is an issue. Electric water heaters cost an average of $42 per month to run.

Water heater size

The water volume of the water heater directly affects the cost of water heater replacement. Water heaters are rated by their capacity in gallons. Larger volume water heaters are generally more expensive than smaller water heaters. Price differences between capacity tiers range from $50 to $100.

Water heater capacity ranges from 10 gallons to 120 gallons. Water heaters at the extreme ends (10, 20, 100, and 120) are for special or commercial use. Most water heaters are either 40 gallon or 50 gallon.

The installation regulations require a thermal expansion tank. This safety feature prevents damage to your plumbing lines and fixtures. Have a plumber install a thermal expansion tank on any new water heater or retrofit on existing water heaters.

Smaller homes are best equipped with a 40 gallon water heater, and medium or large homes typically require a 50 gallon water heater. Homes with many occupants may need an 80 gallon water heater. 30 gallon water heaters are the right size for homes of two to three residents or where the shorter Lowboy tank size is needed for smaller utility closets.

  • 30-gallon capacity: $400-$800

  • 40-gallon capacity: $450-$1,250

  • 50-gallon capacity: $550-$1,600

  • 80-gallon capacity: $1,250-$2,250

labour costs

A plumbing contractor or water heater specialist will offer a flat rate for water heater replacement. This price typically includes the water heater, water heater delivery, installation by a locally licensed and insured plumber, transport and disposal of the old water heater, and any permits required.

If you decide to replace your own water heater, you may want to hire professionals for some aspects of the project. Plumbers and electricians charge by the hour.

  • Hourly rate for plumbers: $125 to $350 per hour, with an average hourly rate of $250

  • Hourly rate for electricians: $45 to $135 per hour, with an average hourly rate of $90

DIY vs professional installation

You may be able to install your own water heater if you have the appropriate experience with plumbing, gas and electrical systems. However, replacing a water heater is not a simple do-it-yourself job. Installing a water heater is a multi-industry project that includes plumbing, gas or electrical work, venting, moving old water heaters, light carpentry to secure the water heater, and permits and inspections.

Water heaters must be installed correctly to avoid the risk of fire, explosion, or carbon monoxide poisoning. Gas water heaters must have plumbing connections (both water and gas) and have proper venting. Electric water heaters pose a risk of electric shock. All water heaters must be strapped down.

Most homeowners choose to have the water heater installed by a professional. Call a qualified plumber or a combination plumbing/heating/air contractor to replace the water heater. Some companies specialize in water heater installation and maintenance. You should still hold a plumber’s and electrician’s license or be able to subcontract the work. So always check the licenses and make sure they are up to date.

frequently asked Questions

What are signs you need to change your water heater?

Signs that a water heater needs to be replaced include a pool of water on the floor, a rusty drain, foul-smelling water, water that doesn’t heat well, or a water heater that has reached the end of its useful life.

How often do water heaters need to be replaced?

Tank water heaters need to be replaced every 10 to 15 years. Instantaneous water heaters must be replaced every 20 years. A catastrophic water heater failure can have devastating effects on your home. Therefore, as a rule, it is worth replacing the water heater even before signs of failure appear.

Should I Repair or Replace a Water Heater?

You should first try to repair your water heater before replacing it. Given the relatively high cost of replacing a water heater, it is usually worth having the water heater professionally repaired first. In some cases, the solution can be as simple as draining the water heater to allow the heating element to work more efficiently.

Read Next: How Much Does It Cost to Replace an HVAC System?

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