How much does a tankless water heater cost installed?

Quick price table

HomeGuide's 2026 national ranges^[1][9]. These are not quotes.

Tankless type	Unit only	Labor only	Installed total
Electric	$600 to $1,000	$800 to $2,000	$1,400 to $3,000
Propane	$1,000 to $2,000	n/a	$1,600 to $4,500
Natural gas	$1,500 to $2,600	$600 to $3,000	$2,100 to $5,600

Homewyse's calculator, updated May 2026, puts a basic national gas tankless install at a starting estimate of $3,293 to $3,859 per heater^[2]. Its basic scope already includes upgrading the vent and the gas connection, and anything beyond that is extra^[2].

For comparison, a standard tank replacement runs $600 to $3,100 installed^[3]. See water heater replacement cost, or installation cost if the heater is moving or changing fuel.

What is the average cost of an electric tankless water heater?

HomeGuide's 2026 range is $1,400 to $3,000 installed, with the unit at $600 to $1,000^[1] and labor at $800 to $2,000^[9]. An electric tankless install takes 4 to 8 hours^[9].

That price assumes your electrical service can carry the load. A DOE Building America guide says most electric tankless units need 50 to 200 amps and 208 or 240 volts, depending on size, and may need several circuits or a larger electrical service^[10]. If your panel is near capacity, HomeGuide puts a panel replacement at $850 to $1,700^[1], which can erase the savings over gas.

Running cost matters too. HomeGuide estimates $340 to $540 a year in energy for electric tankless against $220 to $480 for gas^[1]. The DOE guide says whole-house electric units often cost much more to run than gas units, and that an electric unit may be a fit in warm regions^[10].

Are instant hot water heaters electric?

Not always. "Instant," "on-demand" and "tankless" describe the same kind of heater, and tankless units are made for electricity, natural gas and propane^[10]. Electric units work well at a single sink or bathroom (point of use)^[10]. For a whole house in a cold region, the same guide says gas units usually cost less to run than electric, but they draw a lot of gas and may need a larger gas line^[10].

What size tankless water heater does a family of four need?

Size a tankless heater by flow, not by the number of people. The DOE guide says to find two numbers^[10]:

1. Temperature rise: the hot water temperature you want (120 F for most uses) minus your coldest incoming water temperature, which your water utility can give you.
2. Peak flow: the gallons per minute (gpm) of every fixture likely to run at the same time.

Typical flow rates from the DOE guide^[10]:

Fixture	Flow (gpm)
Shower	2.5
Kitchen sink	2.5
Dishwasher	1.9
Bathtub	2.4 to 4.0
Laundry sink	4.0

Worked example (our arithmetic). A family of four whose busiest moment is two showers plus the dishwasher needs 2.5 + 2.5 + 1.9 = 6.9 gpm. Two showers alone need 5.0 gpm. If winter water comes in at 50 F, the rise is 70 F. Check each model's flow chart at a 70 F rise, not its maximum gpm.

For scale: an ENERGY STAR gas tankless unit must deliver at least 2.8 gpm over a 67 F rise^[8]. That covers one 2.5 gpm shower, not two. Showerheads with lower flow ratings shrink the number, so read yours.

Where the money goes

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

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

The upgrades that 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

A tank-to-tankless conversion takes 8 to 12 hours of labor, against 2 to 4 for a standard tank replacement^[9]. See tank to tankless conversion cost.

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

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]. See tankless descaling cost.
• 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, against 8 to 12 for tanks^[7]. 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 tankless guide still says qualified units may be eligible for federal tax credits^[1]; that is out of date for 2026 installs.
• Utility rebates. 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^[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 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.