If it weren’t for water heaters, homeowners would have to heat pots of water over a stove to take a warm bath. Luckily, that’s not necessary, thanks to all the various kinds of water heaters available. But how much does each of these types of water heaters cost?

For over 15 years, we have always kept an eye on the costs of water heaters and the various factors that affect their pricing. At Monkey Wrench Plumbing, Heating, Air & Electric, we’ve installed multiple types of water heaters based on a homeowner’s water needs.

Here’s a quick summary of the price range for the following types of water heaters.

  • Tank-style water heater: $3,200 to $5,900
  • Tankless water heater: $4,500 to $8,500
  • Heat pump water heater: $9,500 to $13,000

In this article, we’ll highlight the different price ranges for these three types of water heaters and the factors affecting their overall costs. This information can help narrow your search for the best water heater for your home.

First, let’s dive right into the list of factors that affect the cost of all water heaters!

Factors That Affect The Cost of A Water Heater

There isn’t any definite price for water heaters because several factors determine the final cost. Here are the different factors that affect the overall pricing of tankless, tank-style, and heat pump water heaters.

  • Brand: There are multiple brands offering either all of these types of water heaters. Navien, Rheem, Noritz, A.O. Smith, and Rinnai are some of the well-known water heater manufacturers.
  • Capacity/sizing: The capacity of a water heater is an important factor for tank-style and heat-pump water heaters because it is used to determine what size water heater is needed to meet a home’s water demands. These water heaters can have a capacity of 25 to over 100 gallons of water storage available. Tankless water heaters come in different rates of water flow to determine which suits a home’s water needs best.
  • Installation/Labor: Another vital factor to consider in water heater pricing is the cost of labor and installation. Water heaters can be purchased standalone, but hiring a professional plumber is always recommended to complete the installation. These professional businesses can set their rates for labor, which is included in the price of a water heater.
  • Installation parts: In some cases, additional components are required to help complete a water heater installation. A tank-style water heater may need an expansion tank, a tankless water heater may need a drain for condensation, and heat pump water heaters may require a dedicated electrical circuit.
  • Water Filtration: In areas with hard water, all water heaters can benefit from a water softener. Common water filtration systems sometimes offered and installed alongside a water heater include a carbon filter, sediment filter, or a Flow-Tech anti-scale system.
  • Add-ons: Some modern water heaters have smartphone compatibility, allowing homeowners to control and monitor their water heater via an app and smartphone connection.

Every homeowner shopping for a new water heater should consider all the various factors that affect its final cost. Now that you’re aware of the factors affecting water heater pricing, we can break down the costs further each time.

Water Heater Cost by Type of Water Heater

Although there are various water heaters, tank-style, heat pump, and tankless water heaters are the most common. Here’s a quick summary of what these are and how they operate.

  • Tank-style: Also known as traditional or conventional water heaters, these systems use electricity, gas, or a combination of both to heat water. The water is kept heated at a specific temperature with the storage tank of the water heater. A tank-style water heater is often, but not always, the least expensive option when choosing a water heater.
  • Tankless: A tankless water heater can heat water continuously through a heat exchanger by using gas and/or electricity. These don’t have a storage tank, so water is heated as it is needed for use. Tankless options for water heaters are slightly pricier than tank-style but less than heat pump water heaters.
  • Heat pump: This water heater gathers hot air from the surrounding area and uses the heat to warm up the water. In case there isn’t a lot of hot air or hot water usage is high, these water heaters have a back electrical heating system inside their tank. Heat pump water heaters are often the costliest in terms of price.

In the following section, we’ll start off by breaking down the cost of a tank-style water heater.

Tank-Style Water Heater Cost

A conventional tank-style water heater can cost between $3,200 to $5,900. These units are some of the most common types of water heaters available.

When shopping for a tank-style water heater, homeowners will need to evaluate their home’s water usage and number of bathrooms. Tank-style water heaters are available in the following sizes.

  • 20 to 30 gallons: These small tank-style water heaters are seen in small apartments or installed into a single fixture like a sink instead of an entire home.
  • 40 to 50 gallons: This is the most common size for tank-style water heaters. They’re suitable for homes with one to two bathrooms.
  • 60 to 80 gallons: For larger homes with multiple restrooms, 60 to 80-gallon water heaters are appropriate.
  • Over 80 gallons: The biggest tank-style water heaters are usually required for homes that have a large water demand. These homes can have multiple bathrooms, and run multiple showers and water fixtures daily.

Sizing also plays a huge role in where the tank-style water heater can be installed. These units require adequate space with the appropriate clearances for drainage and ventilation. They’re usually found in a garage, a closet, an enclosed space outside, or a utility room.

Tank-style water heaters are the most budget-friendly in terms of cost, but for a few thousand dollars more, tankless water heaters offer more energy efficiency, which can lead to savings in the long term.

Tankless Water Heater Cost

Tankless water heaters can cost between $4,500 to $8,500 with installation. At a slightly higher price, tankless water heaters offer more energy efficiency and less space than tank-style water heaters.

Whereas tank-style water heaters constantly use energy to keep water heated, tankless water heaters only use energy (gas or electricity) when hot water is in demand. Although it has a higher price tag, tankless water heaters can provide savings in energy bills.

Local rebates and federal tax credits are also available for homeowners who switch to tankless water heaters. Qualifying homeowners in southern California can receive up to $1,600 in local rebates and tax credits by switching to a tankless water heater.

Special rebates are also available for heat pump water heaters with the highest cost out of the three water heaters.

Heat Pump Water Heater Cost

The average cost for a heat pump water heater is between $9,500 to $13,000. These water heaters may be the priceiest, but they offer the highest energy efficiency of all the water heaters available.

Despite their high upfront cost, heat pump water heaters also have special tax rebates available and can provide homeowners with energy bill savings. By using the heat from the surrounding hot air, heat pump water heaters can use up to 75% less energy than water heaters powered by electricity. Homeowners can save hundreds of dollars in energy usage through a heat pump water heater.

Qualifying Southern California homeowners can apply for tax credits for heat pump water heaters and claim up to 30% or up to $2,000 of the total price. The rebates are offered through the IRS, where homeowners can apply during the tax season.

Which Type of Water Heater Is Right for Me?

Water heaters come in various designs and sizes, with tank-style, tankless, and heat pump water heaters being the most common. Each one of these water heater options is available at different prices. Now that you know their price ranges, you can start narrowing your search for the right water heater for your home.

Since 2007, we at Monkey Wrench Plumbing, Heating, Air & Electric have installed and maintained multiple water heaters from some of the top brands. Aside from staying up to date with the newest water heater technology, we also closely monitor costs to help homeowners find a water heater that meets their budget and water needs.

If you have any questions regarding pricing for one of these water heaters, book an appointment through our water heater scheduler.

If you want a deeper comparison between these three water heater types, read this article on the difference between tank-style, tankless, and heat pump water heaters. By comparing these three, you can further narrow your search for a new water heater.

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