The tankless water heater cost most homeowners see online, a national average of roughly $2,600 to $2,800 installed, is only part of the story. What you actually pay depends on whether you are replacing an existing tankless unit, converting from a tank, or upgrading gas lines, venting, or electrical service to handle the new heater. In Los Angeles and Orange County, older homes, permit requirements, and the location of the water heater all push the final number up or down.
This guide breaks down what goes into the price, the national ranges published by major cost guides, The 5 Star Plumbing’s typical local pricing, the conversion costs that surprise people, and how to decide whether the upgrade makes sense for your household.
What This Guide Covers
- Average tankless water heater cost in 2026
- Unit price vs. installation labor
- Tank-to-tankless conversion costs
- Pricing in Los Angeles and permits
- Is a tankless water heater worth the cost?
- Ways to keep the project cost down
- Frequently asked questions
Average tankless water heater cost in 2026
Two of the most widely used national cost guides land in a similar range. Angi reports an average total of $2,641, with most projects falling between $1,406 and $3,902. This Old House puts typical installation at $1,200 to $3,500, with an average of about $2,800 for equipment and labor together. For comparison, This Old House lists a conventional tank water heater at $800 to $1,500 installed.
Those national figures are a reasonable starting point, but they mostly describe a straightforward swap. Once a project needs a larger gas line, new venting, or an electrical upgrade, the total can climb well past the top of those ranges.
Tankless water heater cost by fuel type
Fuel type is one of the biggest drivers. Electric units are cheaper to buy and install but can require a major electrical upgrade, while gas units cost more upfront and often need venting and gas line work.
| Fuel type | Unit price | Installation | Typical total |
|---|---|---|---|
| Electric | $500–$1,500 | $150–$1,000 | $650–$2,500 |
| Propane | $500–$2,000 | $900–$1,500 | $1,400–$3,500 |
| Natural gas | $750–$2,000 | $900–$1,500 | $1,650–$3,500 |
National ranges from This Old House (2026). Local prices vary.
Whole-house vs. point-of-use units
A small point-of-use heater that serves one sink or shower is a very different purchase from a whole-house system. This Old House lists point-of-use models (1–2 gallons per minute) at $150 to $500, small whole-house units (2–4 GPM) at $500 to $1,000, medium units (5–7 GPM) at $1,000 to $2,000, and large units (8–10 GPM) at $1,500 to $3,000. Most Los Angeles single-family homes with two or more bathrooms need a mid-size or larger whole-house unit to run a shower and a dishwasher at the same time.
Unit price vs. installation labor
When you compare quotes, it helps to separate the equipment from the labor. The price on a quote usually combines the unit, fittings and valves, labor, haul-away of the old heater, and the permit.
What drives the labor portion
This Old House estimates licensed plumber rates at $75 to $150 per hour, with a typical tankless install taking four to eight hours. Angi’s estimate is $600 to $1,850 in labor. The spread comes down to a few factors:
- Location of the heater. A garage install is simpler than an attic, closet, or tight utility room.
- Venting route. Gas tankless units need dedicated venting through a wall or roof.
- Existing gas line size. A gas line sized for a tank may not supply enough fuel for a high-BTU tankless unit.
- Water connections. Isolation valves for future descaling and any re-piping to the new mounting spot add time and materials.
Sizing affects the price
Tankless heaters are sized by flow rate (gallons per minute) and temperature rise, not tank volume. According to the U.S. Department of Energy, typical units deliver hot water at 2 to 5 gallons per minute, and gas models generally deliver higher flow rates than electric ones. An undersized unit costs less upfront but leaves you with lukewarm showers when two fixtures run at once. Our guide on how to choose the right tankless water heater walks through sizing in more detail.
Tank-to-tankless conversion costs
If you are replacing a tank with a tankless unit for the first time, expect add-on costs that a like-for-like replacement does not have. These are the line items that most often explain why one quote is much higher than another.
| Conversion item | National cost range | When it applies |
|---|---|---|
| Gas line upsizing (½” to ¾”) | $400–$800 | Gas units where the existing line cannot supply enough BTUs |
| New venting (wall or roof) | $400–$800 | Gas units; old tank vents usually cannot be reused |
| New electrical circuit | $200–$600 | Electric units |
| Electrical panel upgrade | $1,000–$2,000 | Electric units in homes with limited panel capacity |
| Old water heater removal | $100–$500 | Most replacements |
| Building permit | $50–$200 | Varies by city |
National ranges from This Old House (2026).
Gas line work is often needed in older homes that were plumbed for a 40- or 50-gallon tank. If your project needs it, our gas line repair team can handle the gas line along with the water heater.
Tankless water heater cost in Los Angeles
Local labor rates, permit requirements, and the condition of existing gas, venting, and water lines make local pricing different from national averages. The 5 Star Plumbing’s typical price for water heater installation, including tankless units, is $2,000 to $12,000+. The wide range reflects everything from a straight replacement of an existing tankless unit to a full conversion with gas line, venting, and mounting changes. The exact price is confirmed after the technician sees the job.
| Related job | The 5 Star Plumbing typical price |
|---|---|
| Water heater installation (tank or tankless) | $2,000–$12,000+ |
| Partial gas line replacement | $500–$2,000 |
| Tankless descaling | $350–$400 |
Typical ranges only. The exact price is confirmed after the technician sees the job.
Permits in the City of Los Angeles
The Los Angeles Department of Building and Safety (LADBS) requires a plumbing permit to replace a gas water heater in a single-family home, unless the work is done by a contractor registered in its Certified Licensed Contractor program. That exception is limited to replacing a water heater of equivalent capacity, BTU rating, and vent capacity. A tank-to-tankless conversion usually changes the BTU rating and venting, so plan for a permit. Other cities in Los Angeles and Orange County have their own rules, so check with your local building department.
Descaling and maintenance costs
In areas with hard water, mineral scale builds up inside the heat exchanger of a tankless unit. Periodic descaling is part of the long-term cost of owning a tankless unit, and skipping it shortens the life of the unit. Learn more on our tankless descaling page.
Is a tankless water heater worth the cost?
For many households it is, but the answer depends on how much hot water you use and how long you plan to stay in the home.
Energy savings
The U.S. Department of Energy says demand water heaters can be 24% to 34% more energy efficient than conventional storage tank water heaters for homes that use 41 gallons or less of hot water daily, and 8% to 14% more efficient for homes that use around 86 gallons per day. The higher the hot water use, the smaller the percentage savings, though the dollar savings can still be meaningful. We cover the math in how tankless water heaters cut your energy bills.
Lifespan
The Department of Energy notes that most tankless water heaters have a life expectancy of more than 20 years, compared with 10 to 15 years for storage water heaters. A longer service life spreads the higher upfront tankless water heater cost over more years, which matters when you compare it with replacing a tank once or twice in the same period.
When a tank may still make sense
- You plan to sell the home within a few years.
- Your gas line, venting, or electrical panel would need extensive work.
- Your household regularly runs several hot water fixtures at once and would need a very large unit or two units.
If you are weighing both options, our water heater replacement guide compares tank and tankless costs side by side.
Ways to keep the project cost down
- Size the unit correctly. Paying for capacity you do not need raises the price; buying too small leads to complaints and sometimes a second unit.
- Install near the existing heater location. Moving the heater adds piping, venting, and labor.
- Ask for an itemized quote. Separating the unit, labor, gas line, venting, and permit makes quotes easier to compare.
- Ask about financing. The 5 Star Plumbing offers financing options for larger projects.
- Check current offers. See our promotions page for any active deals.
- Do not count on the old federal tax credit. Some cost guides still mention a 30% federal credit for qualifying water heaters. The IRS states that the Energy Efficient Home Improvement Credit will not be allowed for property placed in service after December 31, 2025. Ask a tax professional about your situation.
The bottom line on tankless water heater cost
Nationally, most tankless installations fall between about $1,200 and $3,900, with averages around $2,600 to $2,800. Conversions from a tank, gas line upsizing, new venting, and electrical work can push a project higher, especially in older Los Angeles homes. A tankless unit costs more upfront than a tank, but its longer lifespan and lower energy use can make up part of the difference over time.
The 5 Star Plumbing is a family-owned and operated plumbing company with experience since 2006 (California contractor license #1041772). To get pricing for your home, call (888) 909-0120, contact us online, or learn more about our tankless water heater services. We serve Los Angeles and the surrounding communities, 24/7.
Frequently asked questions: tankless water heater cost
How much does a tankless water heater cost to install?
National cost guides put most installations between about $1,200 and $3,900, with averages of $2,641 (Angi) and about $2,800 (This Old House). The 5 Star Plumbing’s typical price for water heater installation, including tankless, is $2,000 to $12,000+, and the exact price is confirmed after the technician sees the job.
Why is a tankless water heater so much more expensive than a tank?
The unit itself costs more, and installation often involves extra work: a larger gas line, new venting, an electrical upgrade for electric models, and mounting the unit on a wall. This Old House lists conventional tank heaters at $800 to $1,500 installed, compared with $1,200 to $3,500 for tankless.
Is a gas or electric tankless water heater cheaper?
Electric units usually cost less to buy and install, with This Old House listing totals of $650 to $2,500 versus $1,650 to $3,500 for natural gas. However, an electric unit may require a new circuit or panel upgrade, which can cost $200 to $2,000.
How long does a tankless water heater last?
The U.S. Department of Energy says most tankless water heaters last more than 20 years, compared with 10 to 15 years for storage tank heaters. Regular descaling helps units reach that lifespan in hard-water areas.
Do I need a permit to install a tankless water heater in Los Angeles?
In the City of Los Angeles, LADBS requires a plumbing permit to replace a gas water heater in a single-family home unless a registered contractor is replacing it with an equivalent unit. A tank-to-tankless conversion usually changes the BTU rating and venting, so a permit is typically needed.
How much does it cost to convert from a tank to tankless?
On top of the unit and labor, conversion items can include gas line upsizing ($400 to $800), new venting ($400 to $800), and electrical work ($200 to $2,000 for electric models), based on national ranges from This Old House. Not every home needs every item.
Can I still get a federal tax credit for a tankless water heater?
According to the IRS, the Energy Efficient Home Improvement Credit is not allowed for property placed in service after December 31, 2025. Older cost guides may still mention it, so check current rules with a tax professional.
How much does tankless water heater maintenance cost?
The main recurring cost is descaling, which removes mineral buildup from the heat exchanger. The 5 Star Plumbing’s typical price for tankless descaling is $350 to $400, with the exact price confirmed after the technician sees the unit.
Sources: Angi — How Much Does a Tankless Water Heater Cost? (2026) · This Old House — Tankless Water Heater Installation Cost (2026) · U.S. Department of Energy — Tankless or Demand-Type Water Heaters · LADBS — Permit to Replace a Gas Water Heater · IRS — FAQs on 25C changes under Public Law 119-21
