Energy-efficient Water Heating: Strategies For Cost Savings – , but that can vary depending on if you’re going with a tank or tankless system and need additional plumbing upgrades.

You may call it a hot water heater or simply a water heater; Either way, installing a water heater is one of the most common (and important!) home improvements. There’s a huge range of hot water heater replacement costs – you’re paying for materials and labor, and the price of each can vary greatly based on a number of factors.

Energy-efficient Water Heating: Strategies For Cost Savings

If you’re planning to replace or upgrade your water heater, you can use this comprehensive cost guide to help you set your budget.

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. Your total price depends on whether you’re doing a simple one-to-one replacement or a more detailed upgrade, like a tankless system. Additional cost components include water heater size and labor costs.

A traditional water heater holds water in a large tank that holds 20 to 100 gallons. If you are like 90% of households, you have a hot water tank in the basement of a bedroom or laundry room. In comparison, a tankless water heater is about the size of a small suitcase and has a coil system to heat the water.

Tankless models are increasing in popularity due to their efficiency and durability. Unfortunately, high-end models can cost twice as much as a traditional tank water heater. For a replacement, expect to spend $600 to $2,500 on a tankless aerator or $1,200 to $3,500 on a tankless aerator. However, investing in a tankless water heater means you’ll pay back in energy savings over the 20-year life of the unit.

If you are converting a tank system to a tankless system, you may end up paying twice for labor because the job can take twice as long. On the other hand, a tankless water heater costs about $100 to $300 for a single-point system for just one appliance.

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Consider ongoing unit maintenance when deciding. For example, the cost to repair a tankless water heater is between $220 and $975.

“Many homeowners invest thousands to upgrade their water heaters to tankless systems, but are never informed about the importance of regular maintenance,” says Jeff Botelho, a member of the Expert Research Board and a Massachusetts-licensed plumber.

Hot water heaters come in various sizes, measured in gallons (for tank style systems) or gallons per minute (for tankless systems). Again, tank-style heaters hold anywhere from 20 gallons to 100 gallons. The bigger the tank, the more it will cost. Here are some general prices by size, including parts and labor.

The number of people in your home is the best guess as to what size you need. Start by calculating your first hour rate (FHR)—that is, your hot water rise—and your tank’s return rate.

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For a two- to three-person household, a water heater that holds 40 to 50 gallons—or heats 3 to 5 gallons per minute—is usually sufficient. Larger families will need a larger tank, but be careful not to buy a water heater that is too big for your family, as it will cost you more to run over the life of the unit.

When you install a hot water heater, the cost depends on the type of fuel that runs the unit. Natural gas, propane, and electric water heaters all start around $600 – but costs go up from there. High-end electric water heaters are the most expensive type and can cost as much as $3,500, not including hookups or installation. If you need to install a gas line or electrical wiring you will pay a lot more.

You’ll also find efficient, indirect, solar, and hybrid heat pump water heaters, which we explain in depth in the next section.

Electric water heaters usually do not require venting, but gas or propane water heaters do. There are two types of ignition: direct or power. Direct heaters, which use a passive ventilation system, are less expensive and use an exhaust pipe or chimney. Electric heaters are more expensive and use a fan or heater plus electricity.

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In general, expect to spend an additional $300 to $600 on an electric unit, plus $300 to $500 for electrical work.

A typical water heater installation project will consist of materials such as gas and water pipes, transmission pipes, valves, fittings, connections, pressure valves, etc. Additional materials may be required in exceptional cases.

Labor is an important part of hot water heating conversion, but the cost varies depending on how much work it takes. In general, the cost of electricity is $50 to $100 per hour, between $45 and $200 per hour. Expect the following average price ranges for labor only:

Labor may also depend on the cost of living where you live and the level of professional experience.

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Permits for hot water heater replacement typically cost anywhere from $100 to $1,500, depending on the level of work and your local laws. At the very least, you’ll need a permit to install a gas appliance or change plumbing and electricity.

As with many other home systems, brand can play a role in your water heater costs. For example, a Whirlpool® water heater averages $675, while A.O. Smith® averages $1,950. Below are some water heater brands and their average cost.

If you relocate a water heater in a hard-to-reach area you will spend more on water heater installation costs. For example, it will cost more if your contractor has to carry the unit down multiple flights of stairs.

Replacing your water heater also costs more, ranging from $150 to $3,400, depending on the complexity of the move. Sometimes homeowners want to relocate the hot water heater to save space or make room for other upgrades. If you choose a tankless unit, the installation location can also change. This can mean additional costs for new plumbing, plumbing, or small landscaping projects to properly install water heaters.

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Most electric and gas water heaters cost between $550 and $1,500, but the type of unit will have a significant impact on your cost. A commercial radiant heater is more durable but costs about $1,000 more than a residential unit. Here’s what you can expect for each type of water heater.

Electric water heaters typically cost $600 to $3,500 to install. These units are relatively more pocket-friendly on the front end, and you can buy a small electric faucet for as little as $200 for a single appliance. Note that this type of unit requires a 240 volt connection. If you don’t have one near your water heater, you’ll spend an additional $300 to $800 to install a new electric circuit.

Overall, electric water heaters perform best in apartments and small spaces because they require a lot of flexibility. They are slightly safer than gas-powered water heaters because there is no risk of gas leaks, but the overall cost of running your water heater will vary based on local electricity prices. Fortunately, they are around 95% energy efficient.

The average replacement cost for natural gas water heaters is $700 to $2,700. They are one of the most common types of water heaters and tend to heat water faster than electric units.

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Unfortunately, they cost $100 to $200 more than electric units and are less energy efficient. Depending on the average cost of utilities in your city and the current price of gas, you may find yourself stuck with higher operating costs. But if electricity bills are high in your city, a gas option can be less expensive in the long run.

Propane water heaters cost an average of $700 to $2,500 to replace. This type of unit is an alternative to natural gas. You’ll usually find them in rural areas without accessible natural gas lines or homes that are off the grid (think: mountain cabin or island property).

While it’s a great solution in those situations, a tanked propane water heater costs a bit more than a traditional water heater and requires additional maintenance since you need to get a regular supply of propane. They are also not as safe as electric heaters because propane is highly flammable. Propane units carry the risk of explosion and carbon monoxide leaks, although the risk is minimal if they are properly installed and maintained.

It costs an average of $1,500 to $3,000 to install a high-efficiency water heater, but the cost can increase depending on the type. These units can be two to three times more efficient than a traditional tank water heater and boast improvements such as quality insulation, plastic tanks, and smart controls that can detect leaks. In other words, they come with a high upfront cost, but you can save on services over time.

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Although you use your water heater daily, you may not realize that it is the second largest energy source in your home (behind HVAC). Buying an efficient water heater is an economical and environmentally friendly choice.

Indirect units cost an average of $1,200 to $3,500 to install but may be the most budget friendly for use. A top-selling feature is the flexibility to use multiple energy sources—gas, oil, propane, electricity, solar, or any of these—from a nearby source.

“Indirect media uses a coil that connects inside the tank

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