How Much Does Tankless Water Heater Installation Cost?
Updated 24 March 2026
$2,500 to $5,000 installed. The unit is $500 to $2,000. Installation is expensive because most homes need a gas line upgrade and new venting that a standard tank heater never required.
Quick answer
Gas tankless: $2,500 to $5,000 installed. Electric tankless: $1,000 to $2,500 installed. The unit cost is only part of the bill. Gas line upgrades ($500 to $1,000) and dedicated venting ($300 to $600) are almost always required and account for half the installation cost on gas units.
Installation Costs Breakdown
| Type | Unit Cost | Base Installation | Total |
|---|---|---|---|
| Gas tankless (whole house) | $1,000 to $2,000 | $1,000 to $1,500 | $2,500 to $5,000 |
| Electric tankless (whole house) | $500 to $1,000 | $500 to $1,000 | $1,000 to $2,500 |
| Point-of-use electric | $100 to $400 | $100 to $300 | $200 to $700 |
Why Installation Costs So Much
These add-ons are not optional. Most homes require them when switching from a tank to tankless heater.
| Add-On | Typical Cost | Why It Is Needed |
|---|---|---|
| Gas line upgrade | $500 to $1,000 | Tankless units need 2 to 5x more gas flow. Most homes have 1/2 inch pipe that must be upsized to 3/4 inch. |
| New venting (gas units) | $300 to $600 | Tankless units require stainless-lined direct vent to the exterior. Cannot share a flue with a furnace or old tank. |
| Electrical for controls | $100 to $300 | Gas units need a 120V outlet for the electronics and ignition system. |
| Electrical panel upgrade (electric units) | $500 to $2,000 | Whole-house electric tankless units draw 100 to 200 amps. Many panels do not have the capacity. |
| Mounting and plumbing | $300 to $600 | New water supply lines, isolation valves, and flush ports required by manufacturers. |
Gas vs Electric Tankless
| Feature | Gas | Electric |
|---|---|---|
| Unit cost | $1,000 to $2,000 | $500 to $1,000 |
| Total installed | $2,500 to $5,000 | $1,000 to $2,500 |
| Flow rate | 7 to 11 GPM | 3 to 5 GPM |
| Venting required | Yes ($300 to $600) | No |
| Panel upgrade risk | No | Often yes ($500 to $2,000) |
| Best for | Whole house in most climates | Mild climates, point-of-use |
Sizing by Flow Rate (GPM)
GPM (gallons per minute) is the most important spec when choosing a tankless unit. Undersizing means running out of hot water when demand is high.
Frequently Asked Questions
How much does tankless water heater installation cost?
$2,500 to $5,000 installed for gas. $1,000 to $2,500 for electric. The unit is $500 to $2,000. Installation is expensive because most homes need a gas line upgrade ($500 to $1,000) and new venting ($300 to $600) -- two items a standard tank heater never required.
Why does tankless water heater installation cost so much?
Gas tankless units demand 2 to 5 times more gas flow than a tank heater. This usually requires upgrading the gas line from 1/2 inch to 3/4 inch pipe ($500 to $1,000). They also require direct exhaust venting to the exterior ($300 to $600). These two items alone often add $800 to $1,600 to the job.
What flow rate (GPM) do I need?
A single shower needs about 2 GPM. Two showers simultaneously needs 4 to 5 GPM. Add a dishwasher and you need 6 to 7 GPM. Most whole-house gas units deliver 7 to 11 GPM. Electric units typically deliver 3 to 5 GPM, which may not be enough for simultaneous use in cold climates.
Is gas or electric tankless water heater better?
Gas is better for most whole-house applications. Gas units deliver 7 to 11 GPM vs 3 to 5 GPM for electric, heat water faster, and cost less to operate in most regions. Electric units are simpler to install (no venting), but may not keep up with demand in larger households or cold climates, and often require expensive panel upgrades.