Water heater prices and installation costs.

So it has finally come time to replace your old water heater and you need to know more about water heater prices. As water heaters generally last ten or more years, chances are that the cost to place a water heater has gone up slightly since the last time you had one installed. If you are looking to replace your water heater, there are a few things to keep in mind which will determine the price.  

There are different factors that affect the price of replacing a water heater. Price is affected more by how quickly water can be heated, not the capacity of the tank. That is why it is better to focus on the “first hour rating” (FHR) or “gallons per minute” (GPM) rating of a water heater as opposed to the overall capacity of a water heater. Water heater prices will also vary depending on the type of unit that you wish to purchase. The two main types of water heaters that you can purchase are storage tank heaters and tankless water heaters.

Storage Tank Heaters.

Storage tank water heaters are the most common type of water heater. Storage tank water heaters sit on the floor (typically in a basement) and fill with water that it keeps hot until the water is needed. When the tank is emptied, the unit will fill with more water that it will heat and store until ready for use. While storage tank water heaters are the most affordable type of water heater, they also can be costly if they fail and water leaks from the tank.

Prices for storage tank heaters vary depending on the capacity of the tank and whether you choose electric or gas. Gas water heaters are generally more expensive but can save you money on your energy bills as 20% of your home energy costs are attributed to heating water. The cost to replace a water heater that is electric will run you anywhere from $400 to $900 which includes the price of installation. Water heater prices for the same water heater but in gas will run you anywhere from $600 to $1,200 which also includes the price of installation.

Tankless Water Heater.

Tankless water heaters have the same heating principles as a storage tank heater; however, instead of holding and heating water for when it is needed, the tankless water heater heats up the water as it is needed. A tankless water heater has a heated coil that water passes through when it is needed. That is why they have a “gallons per minute” (GPM) rating as opposed to a “first hour rating” like storage tank water heaters. Tankless water heaters are becoming very popular as they take up less room and do not run you the risk of flooding like a storage tank water heater.

The price of a tankless system will depend on the GPM rating of the heater. The more water that can be heated per minute, the higher the price will be. Plan on spending anywhere from $500 to $1,200 for a tankless water heater which also includes the price of installation.  Again, water heater prices of tankless heaters depend on how much water they can heat per minute so it is advisable to choose one with a higher GPM rating.

Installation Cost.

If you have already purchased a water heater and are looking for installation cost, you should know that the cost to install a water heater is generally the same no matter what size tank you want to install. The reason for this is because the connections are the same no matter the brand, size, or efficiency. Installation prices will depend on the location of your water heater and how much work the installer will need to do to access the connections. Generally, installation prices for storage tank water heaters will range between $200 to $400, with $200 being to install a water heater that is easily accessible and $400 for installing one that requires connection in tight spaces. Tankless water heaters will also generally run in the same price range for installation. Overall, installation depends on the location where the unit will be installed, not the overall water heater price.

Water Heater Replacement Tips.

You should also keep in mind that you will need to pay for hauling away your old water heater. You can elect to pay the installer to do so which will generally run you approximately $100. However, there are many people in your local area that will haul them for free due to the older water heaters containing recyclable materials such as copper. You can check your local papers for people who “haul junk for free” or call your local scrap yard to see if they will pick it up for free.

Finally, keep in mind that you may be able to save additional money depending on the tax credits available. If you choose a higher efficiency water heater, the IRS or your state may allow a portion of the price to be deducted from your taxes. This can result in additional savings at the end of the year.

To get a better idea of costs, here are some water heater estimates from professionals.

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