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How much does a tankless water heater cost to buy and have installed? Worth it?

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Installing tankless water heater

Switching to a tankless water heater system is becoming increasingly popular among homeowners. The energy, space, and efficiency benefits that come with going tankless are often enough to convince anyone. However, with an initial price tag that seems hefty in comparison to traditional systems, it’s useful to dive into the numbers to decide if it’s the right choice for you.

In this article, we’re going to go through the various factors that affect the costs of purchasing, installing, and maintaining a tankless water heater. We’ll break down these costs against the savings offered by this style of water heating system, ultimately giving you the information that will help you decide whether tankless is right for you.

Costs for buying and installing a tankless water heater

Choosing the right tankless water heater

The cost of tankless water heaters used to make this type of system unattainable for many. However, increasing accessibility to the technology has lowered the price significantly, making tankless water heating an option for most homeowners to explore today.

Despite this increased affordability, however, tankless water heaters are still significantly more expensive than traditional systems.  Our typical quote for getting you a brand-new tankless water heater and installing it in your home is $7,000.  This includes everything including the water heater and full installation.  Please note that’s a general cost that could vary depending on the tankless water heater brand you get and whether there are any complicating factors installing it in your home.

In order to know what model of tankless water heater is right for you, it is important to first make note of your household water use at peak hours, measured in GPM. Take note of moments when your water use is at its highest – for example, imagine an evening where the laundry machine (approx. 2.5GPM) and dishwasher (approx. 1.5 GPM) are running at the same time that the kids are showering before bed (approx. 1.5 GPM x 2). Your total level of hot water GPM (7, in our example) during a high-volume part of your day-to-day will give you a decent idea of what sort of minimum capability your new tankless system needs to fit your lifestyle.

Additionally, some homeowners decide to break down their hot water use over multiple smaller tankless water heaters, installed as point-of-use systems. These are water heaters dedicated to providing hot water to a single appliance or fixture, a system that can be necessary for homeowners with bigger households and high-use lifestyles. Depending on your peak GPM, deciding between a whole-house system, multiple point-of-use heaters, or a hybrid with both whole-house and point-of-use systems is one of the first steps in figuring out the cost of going tankless.

As you begin looking at different brands, you’ll have the chance to learn about some of the high-tech features for modern water heaters, like wifi-connected remote monitoring. Tools like Navien’s NaviLink™ allow you to have wireless access to and control over your water heater anywhere in the world through the simple interface of a mobile app, giving you immediate alerts if any malfunctions arise, allowing for remote shut-offs. Other types of systems like condensing-style tankless water heaters trap excess heat and use it to warm more water in future, massively increasing the efficiency of the unit.

Installation of your new tankless water heater

Now that you’ve chosen your model, you’ll need to have it installed by certified technicians. Removing an old water heater and replacing it can be a big job with flooding and pressure risks if done incorrectly – rest easy leaving it in the hands of the pros.

If it hasn’t happened already, an in-home visit will be conducted to finalize where your new tankless heater will be installed. Space and parts for exhaust, gas lines, ventilation, insulation, and more will all be considered and prepared ahead of time. On installation day, we’ll remove your old water heater and take it to be properly recycled.

Because you’re switching over to an entirely new style of water heating, the installation process for a tankless water heater is significantly more intensive than the replacement of a traditional model: walls usually need to be opened up, fittings and valves are changed out, gas lines, insulation, piping, and ventilation is installed, and carpentry can sometimes be needed to create the best fit for your new system. Do you need a powered vent or a direct vent for your gas tankless water heater? Are there any structural factors that need to be considered? Is there a gas line nearby or does it need to be laid to where the water heater will be installed?

For electric systems, your home’s electrical grid will need to be examined and possibly modified to ensure the voltage requirements of your new water heater can be met, meaning an electrician might need to be called. Additionally, your municipal building codes may require you to register for a permit before a tankless installation can be completed.

With all of these factors, the labor costs that go into the installation of a tankless system are often much greater than the cost of a simple tank replacement. However, these costs are initial investments only: once set up in your home, regular maintenance of a tankless water heater will be a breeze and in 20 years, replacement will be greatly simplified without the need for the installation of new fixtures and lines.

Maintenance costs for a tankless water heater

Much like a tank-based water heating system, tankless water heaters need to be regularly serviced. Most specialists recommend yearly maintenance.

While a tank-based system can be prone to internal corrosion, pressure risks, gasket failures and more, tankless systems are really only prone to lime scale build-up. In order to ensure that the flow rate of your water heater remains optimal and its efficiency maintained, yearly descaling of the machine and of your home plumbing is strongly encouraged. Depending on the hardness of your water, this process is recommended to be done as frequently as 6 months or inversely, every 2 years.

At Waterline Plumbing we offer warranty packages that include lifetime maintenance and servicing plans. Our clients are also exempt from call-in fees after installing with us. Furthermore, all of our technicians are Level 2 Navien Certified – rest easy knowing your water heating system is being installed and maintained by the best hands possible.

Is Going Tankless Worth It?

Long-term savings with a tankless heater

So you have an idea about the basic costs associated with going tankless – now you may ask yourself, is it worth it? Shouldn’t I just stick with the traditional tank models? What are the benefits?

One of the main perks of going tankless is the efficiency of these appliances, a perk that quickly translates into long-term savings. For one, because your hot water use is on-demand, a tankless water heater is only activated when hot water is being used. It sits idle in the meantime, drawing little-to-no power. With a tank system, hot water is heated, stored, and kept hot while it waits to be used – this means the appliance is constantly running and drawing power as it cycles through those three settings.

The traditional system is massively inefficient, which translates into significant utility expenses. In most North American homes, water heating accounts for over 20% of the total utility costs (with traditional tank models). Tankless heating is at least 40% more efficient than the tank models, meaning you can nearly halve your water heating bills and start accruing some savings. It is estimated that North American homes can save up to $150 (USD) yearly just from utility costs. Furthermore, there are tax benefits offered by your government for the installation and maintenance of these eco-conscious units.

These savings are furthered by the lifespan of tankless water heaters. Plumbing professionals and water heater techs recommend the replacement of a tank system every 6-10 years (depending on water hardness, use, etc). This is because long-term exposure to water will degrade and oxidize various components in the machine, as well as build up sediments along the walls of the tank. Your water quality, efficiency, the safety of the unit, and more are all affected by this regular wear. While regular maintenance is necessary to minimize the severity of these symptoms, replacement eventually needs to occur.

Because of the way tankless systems work, their exposure to hard water is greatly minimized and regular wear on the various components of the unit takes more time. For this reason, most tankless water heaters have an average lifespan of 20 years. With at least double the life of the traditional tank water heater, your savings simply on replacement are much less.

With a 20-year average life and an estimated $100-$150 in energy savings a year, it is possible to have saved $3000 over the course of one unit’s lifespan just in utility costs. This is a massive dent in the cost of first-time installation and purchasing: most of the time, your system has paid itself off by the time a tank system would need to be replaced, giving you another decade of savings before you even need to consider a new model (which in 20 years will be even more efficient and energy-conscious). That decade of savings will serve to help you purchase a new model when the time eventually comes to do so – the cost benefits of a tankless heater are hard to ignore.

Furthermore, as a technologically-advanced, cost-saving, and luxury feature of your household, a tankless water heater system serves to increase the overall value of your home: if you ever decide to sell, potential buyers will view your high-tech water heating system as a definite perk.

Is your specific lifestyle well-suited to a tankless water heater?

The last main factor to consider in deciding whether tankless is worth exploring is relative to you: is a tankless water heater system well-suited to your lifestyle, home, and location?

In regards to lifestyle, make sure to have a clear understanding of what your quotidien hot water use is like. How often do members of your family take hot showers? Do you do a lot of laundry? Do you use a dishwasher often? How many members of your family are there? These questions and more will determine whether a full-house tankless model is enough for your regular use – if not, you’ll have to consider multiple smaller point-of-use water heaters or creating a hybridized system with a large unit backed up by smaller ones.

At this point, the total cost of installation and purchasing may put a strain on your budget – talking with your trusted plumbing service will allow you to fine-tune what the tankless process will be like and if it’s the right choice for you and your household.

In regards to your home, the main factors to consider are your plumbing system and your home’s size. Plumbing would mean accounting for the insulation (or lack of) of your pipes (which makes the water heater work harder if the water coming in is colder), the flow-rate of your fixtures (lower flow means less hot water needs to be produced, meaning your water heater is more efficient and works faster), and the health of your pipes (long-term lime scale build-up can affect the efficiency of your tankless system and even make it malfunction).

The size and location of your home are equally important. Size is straightforward enough; if you have a big house, hot water will be needed in more locations and needs to travel more distance, which can cool the just-heated water and leave you with lacking temperatures on the receiving end. The water heater will need to work harder to account for higher demand, meaning a point-of-use or hybrid system could be required to make it work in your home. Multiple heaters means multiple install locations, which brings the initial cost up significantly.

Location deals mostly with the temperature of the groundwater in your area as well as fuel availability. For one, what is the hardness of the water coming into your home? Because tankless systems are sensitive to build-up and flow changes, households with very hard water will have to service their water heater and plumbing more often to ensure the health and efficiency of their unit. In the northern hemisphere, the water coming into your home from the water main will be very cold, especially in the winter months. That means you’ll need a model that can handle a large temperature differential – these high-powered models can accommodate for massive differences in temperature and quickly superheat ice-cold water from outside. Of course, this often comes with a price tag. If you live somewhere very cold and like to have reserves of water at the ready (just in case of a power outage, for example), a tankless system may not be the best choice.

Fuel availability is similar: do you live in a remote location with less access to gas lines? Where is the fuel source for your home and is it close enough to the install location of your tankless heater? Does additional labor need to occur in order to get fuel to your water heater? Questions like this will allow you to determine if getting a tankless system is worth it for you in the long and short-term.

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