How much does a tankless water heater cost installed?

Installed cost by fuel

HomeGuide's January 2026 ranges^[1]:

Fuel	Unit only	Installed
Electric	$600 to $1,000	$1,400 to $3,000
Propane	$1,000 to $2,000	$1,600 to $4,500
Natural gas	$1,500 to $2,600	$2,100 to $5,600

Homewyse's calculator, updated September 2026, puts a basic national gas tankless install, with favorable site conditions, at a starting estimate of $3,388 to $3,969 per heater^[2]. Its basic scope already includes upgrading the vent and the gas connection, and it notes that anything beyond that is not included^[2].

For comparison, a standard tank replacement runs $600 to $3,100 installed in HomeGuide's January 2026 guide^[3].

Where the money goes

HomeGuide's breakdown for a tankless install^[1]:

Item	Typical cost
Unit	$600 to $2,600
Installation labor (3 to 10 hours)	$600 to $2,500
Supplies (pipe, connectors, valves)	$150 to $300
Permits	$50 to $200
Removing the old tank	$75 to $500

And the upgrades that often turn a mid-range job into a high-end one^[1]:

Upgrade	Typical cost	When it applies
Larger gas line, or a new line	$350 to $2,000	The old tank's line may be too small; Homewyse's basic scope assumes upgrading the gas connection to 200,000 BTU[2]
New venting	$100 to $600	An old tank's vent cannot be reused for a tankless unit
Dedicated electrical circuit	$250 to $900	Electric units, and gas units that need an outlet
Electrical panel replacement	$850 to $1,700	Whole-house electric units on a small panel

Electric tankless is cheaper to install only if your panel can handle it. Whole-house electric units draw a lot of current. If the panel is near capacity, the panel upgrade can erase the savings over gas.

Condensing vs non-condensing. Condensing gas units cost more and are more efficient; non-condensing units cost less to install but have higher operating costs^[1]. Condensing units also need a condensate drain.

Gas or electric tankless: which costs less overall?

Electric tankless has the lower installed range, $1,400 to $3,000 against $2,100 to $5,600 for natural gas^[1]. That gap can close fast. A whole-house electric unit may need a dedicated circuit ($250 to $900) or a panel replacement ($850 to $1,700), while a gas unit may need a larger gas line ($350 to $2,000) and new venting ($100 to $600)^[1]. Which add-ons your home needs decides the real comparison, along with your local electric and gas rates. Ask for both options quoted on the same scope if your home has gas service.

Costs after install

• Descaling. Tankless units need periodic flushing, more often in hard water. HomeGuide's range for a flush and descale is $75 to $300^[4].
• Repairs. Tankless repairs run $300 to $1,300, and a heat exchanger replacement $600 to $1,300^[4].
• Lifespan. Rheem puts tankless life at 15 to 20+ years with proper care, versus 8 to 12 for tanks^[7]. That longer life is part of the value case. See tank vs tankless.

Rebates and credits in 2026

• No federal 25C credit. The IRS says the credit is not allowed for property placed in service after December 31, 2025^[5]. HomeGuide's January 2026 tankless guide still says qualified units may be eligible for federal tax credits^[1]; that is out of date for 2026 installs.
• Utility rebates. Some gas utilities still pay. Nicor Gas in Illinois pays $150 for an ENERGY STAR tankless unit with a UEF of .95 or higher installed in 2026^[6]. Check your own utility.
• ENERGY STAR baseline. A certified gas tankless unit must have a UEF of at least 0.95 and deliver at least 2.8 gallons per minute over a 67 F temperature rise^[8]. Many utility rebates use that as the bar.

How to get a reliable price

Ask for a written quote that names the model and its flow rating at your winter temperature rise, and that lists the gas line size, venting material and route, condensate drain, electrical work, permit and labor warranty. Two quotes that differ by $2,000 often differ in exactly those lines.

When to call a pro

• Any tankless install: gas line sizing, venting and combustion air are licensed work.
• Converting from a tank, where the gas line or vent usually changes.
• Whole-house electric tankless, to confirm panel capacity first.
• To size the unit for your coldest incoming water temperature.