Average Cost Difference Between Gas and Electric Tankless Water Heaters
Electric tankless water heaters typically cost less to install, while gas tankless systems usually provide higher flow rates and better performance for large households.
Typical installed costs range from $2,500 to $4,000 for electric tankless systems and $3,500 to $6,500 for gas tankless systems, depending on installation complexity.
Homeowners comparing system types often review tank vs tankless water heater cost before deciding which option best fits their home.
Gas vs Electric Tankless Water Heater Installed Cost
| System Type | Typical Installed Cost |
|---|---|
| Electric tankless water heater | $2,500 – $4,000 |
| Gas tankless water heater | $3,500 – $6,500 |
Gas units cost more because they require:
- gas line connections
- ventilation systems
- additional installation labor
Electric units are simpler to install but may require electrical upgrades.
Cost by Household Size
| Household Size | Recommended System | Installed Cost Range |
|---|---|---|
| 1–2 people | Electric tankless | $2,500 – $3,500 |
| 3–4 people | Electric or gas tankless | $3,000 – $5,000 |
| 5+ people | Gas tankless | $4,000 – $6,500 |
Gas tankless systems generally provide higher hot-water output, making them more suitable for larger households.
Example Tankless Installation Project
Example scenario:
A homeowner upgrading from a traditional tank heater might see the following costs.
| Item | Electric Tankless | Gas Tankless |
|---|---|---|
| Unit cost | $900 | $1,600 |
| Installation labor | $800 | $1,200 |
| Electrical upgrades | $600 | — |
| Venting installation | — | $800 |
| Old heater removal | $100 | $100 |
Estimated totals:
• Electric tankless system: $2,400 installed
• Gas tankless system: $3,700 installed
Actual costs depend on electrical capacity, gas availability, and installation difficulty.
Operating Cost Comparison
| System Type | Average Annual Energy Cost |
|---|---|
| Electric tankless heater | $300 – $550 |
| Gas tankless heater | $200 – $450 |
Gas units often have lower operating costs because natural gas is typically cheaper than electricity in many regions.
However, electricity rates vary widely by location.
Lifespan Comparison
| System Type | Typical Lifespan |
|---|---|
| Electric tankless heater | 15 – 20 years |
| Gas tankless heater | 15 – 20 years |
Regular maintenance and water quality play a larger role in lifespan than the fuel type.
Factors That Affect Tankless Installation Cost
Electrical Panel Capacity
Electric tankless systems may require upgrading the home’s electrical panel to handle the higher load.
Gas Line Availability
Installing a gas tankless heater may require adding or upgrading gas lines.
Ventilation Requirements
Gas tankless heaters require proper venting to safely exhaust combustion gases.
Installation Location
Installing the unit closer to water fixtures may improve efficiency but can increase installation complexity.
Which Option Is the Better Choice?
Choose an Electric Tankless Heater if
- you want a lower installation cost
- your household has moderate hot-water demand
- electrical capacity upgrades are minimal
Choose a Gas Tankless Heater if
- your home already has a gas line
- your household has high hot-water usage
- you want lower operating costs over time
Homeowners comparing traditional tank systems may also review 40 vs 50 gallon water heater cost when deciding whether to upgrade to tankless technology.
FAQ
Are gas tankless heaters more efficient than electric ones?
Both systems are efficient, but gas tankless heaters often provide higher hot-water output for large households.
Do electric tankless heaters require electrical upgrades?
Many homes require panel upgrades to support the high power demand of electric tankless systems.
Is gas or electric tankless cheaper to run?
Gas tankless heaters are often cheaper to operate where natural gas prices are lower than electricity.
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