Quick answer: Installing a tankless water heater typically costs $1,400 to $3,900, with an average of about $2,640, according to Angi’s 2026 data. Electric units usually land at the low end (about $1,200 to $3,500) if your electrical panel can handle them. Gas units cost more (about $2,500 to $5,500) because of venting and gas line work. Upgrades to the electrical panel, gas line or vent can add hundreds to thousands of dollars on top of that.
A tankless water heater costs more than a standard tank to install, and the gap depends almost entirely on one question: gas or electric? This guide breaks down what each type really costs in 2026, where the hidden expenses come from and how to get accurate quotes before you commit.
Tankless water heater installation cost at a glance
| Type | Typical installed cost | Unit price only | Usual extras |
|---|---|---|---|
| Electric whole-house | $1,200–$3,500 (up to $4,500+ with a panel upgrade) | $450–$1,500 | Heavy-gauge wiring, new 240V circuits, panel upgrade |
| Gas, non-condensing (natural gas) | $2,000–$4,000 | $700–$1,800 | Stainless steel venting, gas line upsizing |
| Gas, condensing (natural gas) | $2,500–$5,500 | $1,000–$2,500 | PVC venting, condensate drain, gas line upsizing |
| Propane | Similar to natural gas | Similar to natural gas | Conversion kit, correct line sizing |
Published 2026 sources agree on the general picture but differ on the details. Angi reports $1,404 to $3,901 installed. This Old House estimates $1,200 to $3,500 with an average of $2,800. NerdWallet cites $1,400 to $3,900 including installation. The Home Depot reports a higher installed range of $2,400 to $5,400, averaging $4,300, as cited by Eccotemp, which includes permits, materials and removal of the old unit. The ranges in the table above reflect all of these.
What you pay for: cost breakdown
| Component | Typical cost | Notes |
|---|---|---|
| Tankless water heater (unit) | $450–$2,500 | Electric units are generally cheaper; high-output gas and condensing models cost more |
| Installation labor | $600–$1,900 | Angi and NerdWallet put labor in this range for a standard job. It is higher for complex jobs |
| Permit and inspection | $50–$300 | Required in most areas, especially for gas and electrical work |
| Isolation (service) valves | $100–$250 | Needed for descaling the unit, often missing in older homes |
| Removal of the old tank | $0–$150 | Sometimes included in labor |
| Venting, gas line or electrical upgrades | $0–$3,000+ | The biggest variable. See the next sections |
Labor often costs as much as the heater itself. A gas installation takes longer than an electric one because of the gas line, venting and combustion testing.
Gas vs electric tankless: installation cost comparison
| Factor | Gas tankless | Electric tankless |
|---|---|---|
| Unit price | $700–$2,500 | $450–$1,500 |
| Typical installed total | $2,500–$5,500 | $1,200–$3,500 (more with panel upgrade) |
| Venting | Required: stainless steel (non-condensing) or PVC (condensing) | Not needed |
| Gas line | May need upsizing | Not needed |
| Electrical needs | A standard 120V outlet for controls | Large power draw: many whole-house models need 120–160 amps of dedicated service and several 240V circuits |
| Condensate drain | Required for condensing models | Not needed |
| Hot water output | Higher flow rates for large homes | Better for small homes, warm climates and point-of-use |
| Biggest cost risk | Venting and gas line | Electrical panel upgrade |
Electric tankless units are cheaper to buy and install, if your electrical system can handle them. Gas units cost more to install but suit homes that already have a gas supply and need high flow. Running costs depend on your local gas and electricity prices. See our guide to the cost to run a water heater for a monthly comparison.
Extra costs that can raise your tankless installation bill
| Extra | Typical cost | When it applies |
|---|---|---|
| Gas line upsizing | $260–$820 | Tankless gas units need more gas flow than a tank. Many homes have a line sized for a tank |
| Stainless steel venting | $400–$800 | Non-condensing gas models vent through walls or the roof |
| New PVC vent and condensate drain | A few hundred dollars or more | Condensing gas models |
| Electrical panel upgrade | $500–$2,500+ | Electric tankless units in homes with limited panel capacity |
| New 240V circuits and heavy-gauge wiring | $300–$1,500 | Electric units that need dedicated circuits |
| Plumbing changes | Several hundred dollars | Moving pipes, adding unions or a recirculation setup |
| Relocating the heater | Several hundred to a few thousand dollars | Moving from a closet to an exterior wall or a new location |
| Water treatment or scale protection | $500–$2,000+ | Hard water shortens tankless life without a softener or regular descaling |
| Wall and drywall repair | $100–$500 | After changing vents, pipes or mounting |
These extras are typical contractor ranges and vary by region and house. Ask every installer to list them separately.
Tankless installation cost by size (GPM)
Tankless sizing is based on gallons per minute (GPM) and the temperature rise your climate requires, not tank gallons. A colder incoming water supply means the same unit delivers fewer gallons per minute.
| Household | Typical flow need | Typical unit price (retail) |
|---|---|---|
| 1–2 people, 1 bathroom | 2–4 GPM | $450–$900 |
| 3–4 people, 2 bathrooms | 4–7 GPM | $800–$1,500 |
| 4+ people, 3 or more bathrooms | 7–11 GPM (usually gas) | $1,200–$2,500 |
A bigger unit raises the unit price and may need a bigger gas line or more electrical capacity, so the total installation cost climbs with GPM. Don’t oversize: pay for the flow your household really uses at peak.
Cost to convert from a tank to a tankless water heater
Swapping a tank for a tankless unit is more than a like-for-like replacement. In Angi’s 2026 data, a tankless installation averages about $2,640, compared with roughly $1,350 for a tank replacement, a difference of about $1,300 before any upgrades. Common conversion costs include:
- Gas tank to gas tankless: new venting, possibly a larger gas line and a condensate drain.
- Electric tank to electric tankless: heavier wiring, dedicated circuits and often a panel upgrade.
- Electric tank to gas tankless: a new gas line and venting. Only worth it if gas is already available nearby.
- Any conversion: wall mounting, plumbing changes and (in hard water areas) descaling valves or a softener.
For how the replacement price of a regular tank compares, see our full guide on the water heater replacement cost in 2026.
Tankless vs heat pump: the other upgrade to price
If you are replacing an electric tank and your goal is lower energy bills, a heat pump water heater is the main alternative to tankless. It typically costs $2,000 to $4,600 installed and may qualify for rebates in some states. Compare the numbers in our heat pump water heater cost guide before deciding.
Is a tankless water heater worth the installation cost?
Tankless units can last longer than tanks (up to about 20 years, according to Angi) and avoid standby heat loss, but the upfront premium and installation extras mean the payback can be long, especially when replacing a gas tank. Payback depends on your hot-water use, local energy prices and the installation extras above. We analyze this in detail in is a tankless water heater worth it. Keep in mind that repairs on a tankless unit can also cost more than on a tank: see the water heater repair cost guide.
Rebates and tax credits in 2026
The federal Section 25C tax credit ended for installations after December 31, 2025, so it no longer reduces the cost of a 2026 tankless installation. Some utilities and states still offer rebates for high-efficiency or electric water heating equipment, but availability changes often and many programs focus on heat pump water heaters. Check your gas or electric utility and your state energy office before you buy, because many programs require pre-approval.
How to save money on a tankless installation
- Get at least three itemized quotes that cover the same scope: venting, gas supply, electrical, condensate, water lines and isolation valves.
- Check your panel and gas line before you shop. Knowing your panel capacity or your gas pipe size avoids surprises.
- Keep the heater near the old location. Relocation raises labor and materials.
- Choose the right size, not the biggest one.
- Ask about electric vs gas for your home. Switching fuels can double the price.
- Plan for scale protection if you have hard water, since it protects the warranty and the lifespan.
- Install in the off-season, when contractors are less busy, and avoid emergency same-day rates.
- Check manufacturer and installer warranties. Many tankless warranties require professional installation and annual maintenance.
DIY or professional installation?
A tankless installation involves gas lines, venting, high-amperage electrical work and pressurized plumbing. Mistakes can cause carbon monoxide leaks, fires or shocks, and most areas require permits and inspections. Hire a licensed plumber or contractor, plus an electrician if your panel needs work. Many manufacturers void the warranty on unpermitted or DIY installations.
Frequently asked questions
How much does it cost to install a tankless water heater in 2026?
Most homeowners pay between $1,400 and $3,900, with an average of about $2,640, according to Angi. Gas units with new venting, or electric units with a panel upgrade, can cost more, and some sources report installed totals up to about $5,400.
Is gas or electric tankless cheaper to install?
Electric is usually cheaper to install if your electrical panel has the capacity. Gas costs more because of venting and gas line work, but it handles higher flow rates and may be cheaper to run in homes with low gas prices.
Will I need an electrical panel upgrade for an electric tankless water heater?
Often yes for whole-house models. Many require 120 to 160 amps of dedicated service and multiple 240V circuits, so older panels may need an upgrade that can add roughly $500 to $2,500 or more. Small point-of-use units need much less power.
How long does a tankless water heater installation take?
A straightforward electric installation can take half a day. Gas installations and conversions that need venting, a larger gas line or relocation can take a full day or more.
Do I need a new gas line for a tankless water heater?
Sometimes. Tankless gas units need more gas flow than a tank, so a line sized for a tank may need upsizing, which typically adds $260 to $820.
Can I install a tankless water heater myself?
We don’t recommend it. Gas, venting and high-amperage wiring require licensed professionals, and DIY installation can void the warranty and violate local code.
Methodology and sources
Ranges in this guide combine 2026 cost data from Angi, This Old House, NerdWallet and the figures reported by Eccotemp, along with typical contractor ranges for venting, gas and electrical extras. Prices vary by region, house and installer. Always get a written estimate from a licensed professional.
This article is for general information. Tankless water heaters involve gas, electricity and hot water. Hire a licensed professional for any work you are not qualified to do, and shut off the water and power or gas immediately if you see a leak or smell gas.