Gas tankless water heaters typically cost $2,800-$6,500 installed, while electric models commonly cost $1,200-$3,500. The final price depends on hot-water demand, fuel and electrical capacity, venting, local labor, and whether the job is a replacement or a new installation.
| Item | Low | Average | High | Notes |
|---|---|---|---|---|
| Gas unit installed | $2,800 | $4,500 | $6,500 | Standard home, existing gas service |
| Electric unit installed | $1,200 | $2,300 | $3,500 | Existing adequate electrical capacity |
| Gas equipment only | $700 | $1,300 | $2,500 | Residential models; higher-capacity units cost more |
| Electric equipment only | $300 | $800 | $1,500 | Residential models, excluding wiring and labor |
Installed gas and electric prices for a typical home
For a like-for-like replacement, a gas tankless system often totals $2,800-$5,000, compared with $1,200-$2,800 for an electric model. These estimates assume a standard residential unit, straightforward access, and no major fuel, vent, or panel upgrades. New construction or a conversion from another fuel can exceed the high end.
Electric units usually have the lower purchase and installation price, while gas models often require more venting and gas-line work. Equipment capacity matters: a home with several simultaneous showers may need a larger unit, multiple units, or a higher-output gas model.
Assumptions: typical U.S. suburban labor rates, standard residential equipment, normal access, and no extensive code upgrades.
What gas lines, wiring, venting, and labor add
Quotes combine the heater with installation tasks that vary by fuel type and existing infrastructure. The ranges below are typical add-ons, not guaranteed national rates; contractors may bundle some work into a single installed price.
| Quote component | Gas range | Electric range | Typical scope |
|---|---|---|---|
| Equipment | $700-$2,500 | $300-$1,500 | Residential tankless unit |
| Labor | $800-$2,000 | $500-$1,400 | Removal, mounting, connections, testing |
| Venting or wiring | $300-$1,500 | $500-$2,500 | Gas exhaust vent or dedicated circuits |
| Gas line or panel work | $300-$1,500 | $400-$2,000 | Capacity upgrades, where needed |
| Permit and disposal | $75-$500 | $75-$500 | Local permit and old-unit removal |
Electric tankless heaters can draw substantial current. A whole-home unit may need multiple 240-volt circuits, and upgrading a panel can add $1,500-$4,000 or more. Gas jobs may need a larger line or a new sealed-combustion vent.
How flow rate and utility capacity change the quote
Tankless sizing is based on flow rate and temperature rise, not just the number of bathrooms. A unit rated around 5-7 gallons per minute may suit moderate demand in a warm climate, but colder incoming water or multiple simultaneous fixtures can require more capacity. Larger gas models and paired units raise equipment and installation costs.
Check the home’s peak demand and incoming water temperature before comparing equipment prices. Electric units around 18-27 kW may serve limited or moderate demand, but whole-home models can require 30-40 kW or more. If the electrical service cannot support that load, panel or service work can outweigh the heater’s lower sticker price.
Save on the gas or electric installation scope
Keeping the same fuel and location can avoid conversion expenses. Before approving a quote, ask whether existing venting, gas piping, wiring, and shutoff valves meet the new unit’s specifications; reuse is possible only when the equipment manufacturer and local code allow it.
Compare itemized quotes for the same capacity and included upgrades, not just the unit price. Avoid paying for oversized capacity without a demand calculation, and ask whether a repair is sensible if the existing heater has a minor service issue. Scheduling routine replacement before failure can also avoid rush charges and limited equipment choices.
Gas versus electric bills after installation
Purchase price is only part of the comparison. Annual operating expense depends on local gas and electricity rates, hot-water use, equipment efficiency, and incoming water temperature. Electric models can be efficient at converting energy to heat, but electricity may cost more per unit of delivered heat in some markets.
For a household using roughly 15-25 gallons of hot water daily, a broad planning range is about $150-$450 per year for gas and $250-$700 for electric. These are rough energy estimates, not utility quotes, and exclude fixed service charges. Local tariffs can reverse the comparison, so use recent bills and your utility’s rate per therm or kilowatt-hour.
Labor time and permit charges for each fuel
A straightforward replacement commonly takes 4-8 hours for a plumber or qualified installer. Gas conversions, new vent routes, difficult access, or electrical upgrades can extend the work to a full day or more and may require separate licensed trades. Labor rates often run $75-$150 per hour, with regional and company differences.
Permit charges commonly fall between $75 and $500, depending on the jurisdiction and whether plumbing, gas, or electrical inspections are required. Ask whether the estimate includes inspection scheduling, haul-away, startup testing, and any required carbon-monoxide or leak checks.
Three realistic tankless installation estimates
A direct gas replacement with an existing compliant line and vent might include a $1,200 unit, 6 labor hours at $110 per hour, and $250 for permit and disposal, for a total near $2,110. Actual bids may be higher when contractor overhead, materials, and warranty coverage are included.
An electric replacement in a home with sufficient panel capacity might use a $750 unit, 5 labor hours at $100 per hour, and $200 for permit and removal, totaling about $1,450. A new circuit or panel work would increase the estimate.
A gas conversion requiring a larger line and new vent might include a $1,800 heater, $1,200 in line and vent materials, 10 labor hours at $125 per hour, and $350 for permits and disposal, totaling about $4,600.
When a tankless conversion costs more than replacement
Replacing an existing tankless heater is generally less disruptive than changing from a storage tank or switching fuel. A conversion may require new venting, plumbing connections, electrical circuits, gas piping, condensate drainage, or wall repairs. Those additions can push a project several thousand dollars above a basic replacement.
Before choosing a model, request separate prices for equipment, installation, infrastructure upgrades, permits, and disposal. That breakdown makes it easier to compare a lower-cost electric option with a gas system that may better match the home’s peak hot-water demand.