What Is The Average Cost To Replace A Hot Water Heater?

In 2020, the cost to replace a hot water heater system can vary greatly depending on your requirements. On average, it can cost anywhere between $400 and $1,000 to replace a heater with a 50-gallon tank unit. If you’re intending on going tankless, the cost could rise from anywhere between $1,500 and $2,500. In addition to costs for parts and labor (between $250 to $500), most plumbers will also charge to properly dispose of your old water heater.

Replacing your water heater: which type?

The cost difference between a traditional water heater with a tank and a tankless device is quite significant. A tankless heater could cost up to $1,600 for the unit alone (minus labor costs). However, a tankless device could actually save you money in the long run. This is because traditional water heaters generally store up to 50 gallons of hot water – that’s a lot of water to heat up. Tankless systems utilize superheated coils to deliver hot water on-demand. This means you’ll only heat the water you need. If you can afford a tankless system outright, or you can come to some sort of repayment plan, it may be worth considering a tankless option as you could save money on fuel or utility bills.

The pros and cons of tank water heaters

If the outright cost of a tankless system is outside of your reach, the good news is that a water heater with a tank is significantly cheaper. It’s possible to pick up tank water heaters for anywhere between $200 to $600. These devices are cheaper to purchase, easier to install and you won’t encounter hot water supply issues.

On the flipside, they are more expensive to run, only last 6-10 years and must be installed within the home, which can mean taking up valuable space that could be put to better use. In addition to this, the tank can also build up limescale and rust, which can affect its performance.

Cost comparison: gas vs electric water heaters

If you are concerned about the long-term energy costs of your water heater, an electric appliance is the most cost-effective choice. Electricity is slightly more expensive than natural gas when it comes to powering your device, although an electric water heater is marginally cheaper than a gas-powered heater. If you’re considering other cost-saving measures like solar panels, an electric water heater can be a good choice.

An electric tank heater costs around $750 on average, with annual energy consumption weighing in at approximately $460. While a gas tank heater costs slightly more, yearly energy costs weigh in at around $350.

The importance of energy efficiency

Hot water can account for over one-third of your overall energy bill. If your household uses a lot of hot water, you will want to opt for the most energy-efficient device you can afford. This could help to save you hundreds of dollars over the years.

Additional costs

When replacing a water heater, you should be aware of any additional costs you may encounter – and whether you need them. For example, a warranty might bump up the price of your heater, but it could protect you in the event of device failure.


Ultimately, the cost of a new water heater will depend on your individual circumstances. You may find it helpful to discuss your requirements with an expert, who should be able to take into account how much water you use, how many persons reside in your household and what your fuel options are. This should help you to decide on the most cost-effective option for your property.

If you need help with your hot water heater make sure to contact the pros at D&N Plumbing and Gas!

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