Water heater replacement cost for gas and electrical: How Much Is It? (Don’t OVERPAY!)

The cost of a hot water heater replacement is usually driven by more than the price of a new water heater. The labor and other parts also affect the final cost.

This article focuses on hot water heater replacement costs in the USA. It gives a general idea of the cost of hot water heater replacement in different parts of the country and various types of water heaters.


Hot water heaters are usually replaced when they are more than 10 years old. They are often replaced when they are not under warranty.

Types and brands of water heaters

Water heaters come in many different varieties, types, and brands. The two most common types of water heaters are gas and electric.

  • Gas – A gas water heater heats water by burning fuel. The heat escapes through a flue pipe.  These range from 1500-10000 USD. Some water heaters have tanks (to offer hot water immediately and they can be more efficient) and can also heat up a house. This makes them more expensive as they have to produce more energy. Gas-based heaters need quite a lot of maintenance as they have to be cleaned. 
  • Electric – Electric water heaters are often cheaper to install but more expensive to run. They often range between 1000-5000 USD. They are also sometimes installed for one faucet or shower and these are cheaper. There are several brands and some last longer than others so it can be worth it to spend a little more. Your plumber can give the advice to see what the best solution is based on your needs.

More and more people are moving to heat pumps. These can cost 10000 USD or more, depending on your needs. Second hand water heaters can be cheaper but make sure that you get one that works well. Your plumber can sometimes help you with this.

Cost of the labor to install the water heater

The average cost of labor to install a water heater ranges from $650 to $5000, depending on the area and installation company. There are, of course, some instances where the cost of labor will be higher if there is a lot of work. Sometimes old pipes have to be removed or new drains have to be installed. 

It is often best to remove some older pipes while you are working on the water heater. This makes sure that your system will keep functioning properly for a long period of time. 

It is a great idea to ask your plumber to tune your system. A lot of people use the factory settings but these are often not the most efficient option for your home.

Sometimes the plumber takes a margin on the tank as well. This compensates them for having to go to the store and find the right model. Some plumbers buy water heaters in bulk and allow you to save money on them.

Plumbers are more expensive in California, New York, and Florida. They often adjust their prices based on demand and competition. They often also change them based on the season as there is more demand for their labor during the winter. 

There are websites that allow you to compare the prices of different plumbers. Make sure to check if the plumber is certified and insured. Also, check the reviews as some plumbers don’t offer a lot of support when something goes wrong. Some companies offer extended guarantees and this can be useful as water heaters have to be serviced. 

Cost of the parts to install the gas or electric water heater

The price of the parts to install a water heater will depend on your system. The price of copper will range from $1 to $5 per foot. PEX also needs to have different connectors. Your plumber has an idea of the latest prices as this evolves a lot.

All these small parts can add up and result in a few hundred dollars additional costs. In the past plumbers often made these parts themselves but it would take too much time to do this nowadays. You can ask an itemized invoice from your plumber to see how much each of these have cost to get an idea of the price.

Some people are opting for solar panels and batteries for their heat pump or electric water heater. This can increase the costs by a lot. 

Minimum costMaximum cost
Water heater1000 USD20000+ USD
Labor500 USD5000+ USD
Parts100 USD1000+ USD
Overview of the cost to install a water heater in the USA.

What to do with an old water heater

If you are replacing your hot water heater, you should consider what you will do with the old water heater.

The old water heater might still work. You can either keep the old water heater or sell it. They also contain a lot of valuable metals so you can sell them to a company that collects scrap. Depending on the price of metals at that point in time, you can get 50-200 USD for it. The metals in the old water heater can be recycled. A plumber might deduct this amount from his invoice if they can take it with them. 

Can you install a water heater yourself?

In some instances, you can. It is often needed to get it certified though. Check your local code as some states require that you use a licensed professional to install the water heater. This is especially the case if it runs on gas.

Plumbers have sensors that allow them to check if a system is working properly. If you don’t have these, it can be quite challenging to make sure that everything is done properly.

Finding the right water heater is also challenging without the advice of a professional. Each situation is different and plumbers know all the brands and models that are available. You also have to take your future needs into account as your family might expand over time. 

If you are not sure about replacing your hot water heater, you can always repair it.

Once the heater has reached a certain age, it is often better to replace it as the parts are getting worn out and you might have to repair it often. This can be annoying as you won’t have hot water several times. 

Lease or Buy?

The first thing to do when you need to replace a water heater is to determine if you should buy or lease. Leasing a water heater can be a great option for homeowners who aren’t sure if they’ll be staying in their home long term, a new homeowner who isn’t sure if they want the responsibility of owning a hot water heater, or someone with an older home that doesn’t require so much hot water usage. Just keep in mind that leasing will cost more than buying over time. It can be easier though as the maintenance is planned and if something breaks down, you won’t get an expensive repair. 

Leasing a water heater is becoming more popular as more companies start to offer this. You depend on them if things break and some companies don’t offer a great service. You can always take another plumber if you have problems with your own system. If you lease it, you are often stuck with the company that owns and manages the water heater. 

Important elements that affect the cost of the water heater installation

Below are some things to take into consideration when you get a water heater:


One way to save money on a new water heater is by getting it through the manufacturer’s warranty. For example, some companies will cover the cost of labor and parts for the first five years. Water heaters can have manufacturing defects and break. This doesn’t happen that often though as they are tested in the factory.

Energy Efficiency

If you’re in the market for a new water heater, it’s important to consider which type you want. There are two main types of hot water heaters: gas and electric. Gas is the most common and most cost-effective choice. Gas-powered units are the most expensive type of water heater. If you choose this type, expect to pay around $2,000 or more.

 Electric is more expensive upfront but cheaper to operate over time. If you have solar power and a battery, the cost to run it can go down a lot. This depends on your climate and your needs though. It can require a big upfront investment as well.

Tank versus tankless Options

Some water heaters have a tank that holds warm water. This makes your system more efficient if you need a lot of hot water as it doesn’t have to turn on every time that you need hot water. Water heaters with a tank are more expensive and take up more space. They also need to be drained from time to time. Tankless is an option for those who have limited space or don’t need a lot of hot water.

Whole house vs individual faucets

It is also possible to install a small water heater under a faucet. This can be done in small apartments or in faucets that are far away from the central water heating system. These systems are often cheap and easy to install.

Combi system

More recently, water heaters and boilers have been combined in one system. This saves space. If you need a lot of hot water and heating, this option is not ideal as the system can only do one thing at a time. For this reason, it is less used in colder climates. 

The size of the system

It is annoying if you don’t get enough hot water. Bigger systems are more expensive though. For this reason, you have to find the right water heater based on your needs. Let’s take a look at how this is done:https://www.yo

To conclude, we can state that there are a lot of things to consider when you replace a water heater. You have to look at your specific needs to find the best option. For this reason, it is difficult to say how much a new water heater will cost. It ranges from 500 USD to a few thousand USD. The installation cost is often around 500 USD as well, depending on how many parts are needed. Water heaters have to be replaced every 10 to 15 years so they are a big cost when you own a home.

To conclude, we can state that replacing a water heater can be quite expensive as you have to take the labor and parts into account as well. Luckily, it is not something that has to happen often. Depending on the installation, it can range from 1500-30000 USD to get everything installed. It will be more expensive in some states than in others. For example, in California, it will cost more as the plumbers tend to charge more. 

If your water heater is leaking, it might be time to get it replaced. In this post, we have outlined some ideas to help you to pick the best option.