Average Cost of a Water heater
Having hot water come out of your faucet, shower, or laundry was once seen as a luxury. Those days are over and it is now widely considered a basic necessity. Getting the right water heater for you means doing your research and being savvy with how you spend your money. There are a lot of false economies to be had in the world of water heaters – buy a cheap model now and you’ll spend more to run it, and you’ll need to replace it sooner.
This guide will show you how you can save money on water heaters, but also how you can be smarter with your money. After all, having hot water come out of the faucets is something you want to be able to take for granted.
THE OVERALL COST
The average cost of a water heater is around $950 (including installation). The normal range is somewhere between $650 and $1,600 with an extreme range of $400 to $5,000.
This size of this range is caused by a wide variety of different models, sizes, and installation types. Generally, however, you can expect the process to cost roughly $1,000.
There are four main different types of water heaters you can buy for your home. Each of them has different strengths and weaknesses when it comes to cost. For a more detailed overview of the different types of water heaters, see our guides What is a Tank Water Heater and What is a Tankless Water Heater.
As a general rule of thumb, the cheaper a tank is to run in the long term, the more expensive its upfront costs will be.
A standard tank is the traditional model of water heaters. Cold water is drawn into the tank, heated, and then stored, ready for usage throughout the home. The cost of this type of tank is driven in large part by the capacity, which usually ranges from 20 gallons to 80 gallons (See the section on size, below).
The cost of a 50-gallon model of this type of tank is somewhere between $400 and $800.
High-Efficiency tanks are those which have either a good Energy Factor (EF) rating (for gas heaters) or Energy Star certification (for electric heaters). A heat pump system draws the air from around the heater and uses that to help with the process of warming the water. This means that the annual electricity usage of this type of tank is around 65% less than with a standard heater.
For a heat pump system, you can expect to pay somewhere between $1,200 and $3,500 (although this will be offset by the reduced electricity costs).
Technology relating to solar tanks is constantly improving, and local and federal government subsidies for solar power are growing – both of which help to reduce the cost of installing a solar system. A solar system involves a thermal collector on your roof or in your yard, and a tank inside your home to store warm water.
Installing a solar water heater system will cost between $1,800 and $5,500, and can cost up to $13,000. Although, you should research subsidies in your area as this could bring down the costs significantly.
A tankless system is one that heats water at the point-of-use. This is a more efficient system as you are not paying to heat water for the eventuality that you might use it, but instead paying to heat only what you need.
There are two main types of tankless systems – a single point model and a whole house system.
A single point unit is one that sends hot water to a particular point of use, such as a faucet or a shower. They can provide between .5 and 2 gallons of water per minute, depending on their size. The amount of water they can heat is known as the flow rate.
Depending on the flow rate, the cost for a single point model is between $150 and $1,000.
A whole-house system provides hot water throughout the home, although it still heats water as and when you need it, rather than storing it in a tank. These types of systems are effectively larger versions of single-point systems, with a flow rate of between 5 and 10 gallons per minute. If you have a large family (and therefore large water usage) you may need to install multiple whole-house systems.
For this type of heater, you can expect to pay $600 to $800, or between $1,000-$2,000 with installation (for more installation costs, see the‘Installation’ section below).
KEY COST CONSIDERATIONS
The cost of the water heater will grow as the capacity for the heater grows. (Note: The running cost of the water heater will also grow as size does; this will be discussed in the ‘Running Costs’ section below. The listed prices refer only to the purchase cost of the heater).
The table below will show you how the cost of water heaters grows as the capacity of the tank grows, which includes the full range of prices that you will find.
|30||$270 - $900|
|40||$320 - $1,600|
|50||$400 - $2,200|
|75||$900 - $3,000|
|80||$1,000 - $3,000|
Ultimately, you will need to research the amount of water your home will use within a given period of time. A 50-gallon gas heater tank can refill in around an hour, versus 2 hours plus for an electric model. Therefore, you will need to factor this into the necessary size calculations.
GAS VS. ELECTRIC
As suggested above, there are a number of key differences between gas and electric heaters, all of which have financial implications. Around 60% of homes in the United States have gas heaters, whereas 40% use electric heaters.
Electric heaters typically cost somewhere between $300 and $2,880.
With electric heaters, you may not need to pay for installation because they are relatively simple to install yourself.
The running costs of the two will be discussed below, although in both cases, you can expect an annual cost of $500 to $1,000 to run a water heater.
The average cost of running a water heater is $781 per year, (this is based on a standard 50-gallon tank, running at 5,500 watts, with an Energy Factor of .90, and an electricity rate of $.16 kilowatt-hours.
This should be treated as a baseline figure, although generally, you won’t pay outside of the $500 to $1,000 per year range unless you have extreme needs (i.e. a large family, a cold climate, etc.).
REPAIR AND REPLACEMENT COSTS
If something does go wrong with your water heater, you’ll usually have to pay for a professional to inspect and repair it. Any repairs and replacement parts will cost you labor and cost of materials.
The average cost to repair a water heater is $570, with the average range being somewhere between $200 and $1,000. For a more detailed breakdown, see our guide on Water Heater Repair and Replacement Costs.
As mentioned above, the installation costs between a gas and electric water heater differ significantly. For a gas heater, you’ll pay $1,000 to $3,000 and for an electric heater, you’ll pay $620 to $1,020. The difference between the two comes with the difficulty level of working with gas.
With larger jobs, you may be able to arrange a project fee and negotiate down the hourly rate.
New heaters require a permit to certify that they are up to code.
Your contractor will be able to arrange this permit and it can be added to the overall project fee.
Removal of Old System
If you require the previous water heater to be removed and disposed of as part of the installation, you can also arrange for the contractor to take care of this. There are several parts of a water heater that need to be disposed of properly.
Ultimately, a water heater is something you can’t live without. Very quickly, however, the cost of a water heater can add up – particularly if things start to go wrong.
However, by utilizing things like a homeowners’ insurance policy and the manufacturer’s warranty, you can avoid being on the hook for some of the costs.