How much does a new water heater cost?

Since you’re reading this article, you’re probably in need of a new water heater. For most homeowners, the number of options—including different makes and models—can initially feel overwhelming.

In this article, we’ll attempt to cut through the noise and focus on the key elements that make one water heater different from another, so that you can figure out which system is right for your home.

Select your water heater

Today, there are two main types of water heaters: standard and tankless. Let’s review the differences between these two water heater types, including how much each type costs.

Standard Water Heaters

Picture a water heater. Chances are, you’re picturing a standard water heater. They’re the ubiquitous “water heater” found in most American homes: a water tank that heats and stores hot water, distributing it as needed to your shower head, kitchen sink, and washing machine. This type of water heater is so common that most homeowners just refer to it as a “water heater”—plain and simple.

Most standard water heaters are pretty simple. What they lack in features or versatility, they make up for in both reliability and their low cost. You’ll find that replacing your water heater is one of the less expensive home projects out there. According to HomeGuide.com, new standard water heaters run anywhere between $600 and $1,800.

While that’s not exactly loose change you can find in between your couch cushions, it’s a relatively bargain compared to the cost of new furnace installation, replacing your roof, or almost any other equivalent home repair.

This type of water heater has been around forever because it works. It gets the job done. That being said, there are some notable drawbacks you should be aware of—especially if you’re weighing this type of water heater against a tankless one.

Standard water heaters have a relatively short lifespan, lasting about 12-15 years. So, while they don’t cost too much to install, you’ll be lucky to get two decades out of your new water heater.

Tankless Water Heaters

Also known as “demand-type” systems, tankless water heaters operate very differently from standard “tank” models. Unlike most water heaters, tankless units do not heat and then store hot water; instead, they heat up water as it’s needed at the tap, shower head, or in your dishwasher.

Tankless water heaters have a number of advantages over standard ones. First, they’re far more energy-efficient: by heating water on an as-needed basis, they use far less electricity or natural gas, cutting down on your energy bills. They also last far longer on average: while standard water heaters typically last for 12-15 years, tankless models are known to keep running for 20-30 years.

These two key advantages help offset the main disadvantage of tankless systems: their upfront cost. According to data from HomeGuide.com, installing a tankless water heater will run you somewhere between $800 and $3,500. That’s a higher price range than standard units ($600 to $1,800). A tankless water heater might end up costing you anywhere from 1.5 to 2 times as much as a standard model.

However, if you’re planning on staying in your home for at least the next 5-10 years, you’ll probably be around long enough to see that price difference work itself out. Eventually, through both lower utility bills and a longer system lifespan, you’ll probably break even and even come out ahead.

Of course, most homeowners who upgrade to a tankless water heater don’t really do it for the long-term cost savings. They make the switch because of the convenience that comes with unlimited hot water (important for large families and busy mornings). If you’re in that camp, you might just find that a tankless water heater is well-worth the investment.

Gas versus electric water heaters

Both standard and tankless water heaters come in both natural gas and electric configurations. As their names state, gas water heaters combust natural gas to generate heat, thereby heating the water in the tank. Electric water heaters use electricity to do the same.

In the sections below, we’ve outlined some of the key differences between these two heating configurations, and why a gas or electric water heater might be right for your home.

Electric Water Heater Cost

Electric water heaters are less expensive than gas models. Most homeowners pay, on average, anywhere from $500 to $2,100 for a standard water heater that runs on electricity. For the most part, they’re less costly than gas water heaters, which have a price range between $600 and $2,800.

So, if electric water heaters are less expensive, why do homeowners opt for gas models? Here in Albuquerque, and throughout most of the United States, natural gas is less expensive than electricity. That’s true for both heating your home and for heating water. While you’ll save on the initial cost of installation by choosing an electric system, you’ll end up paying more through your utility bills over time.

Of course, if your property doesn’t have a natural gas connection or can’t get natural gas, for whatever reason, an electric water heater is still a great choice.

Gas Water Heater Cost

Gas water heaters cost more upfront than electric models. Again, according to data collected by HomeGuide.com, you can expect to pay anywhere from $100 to $700 more for a water heater when you choose gas over electricity.

That’s not always a bad thing, however. In general, natural gas is much cheaper than electricity. With a gas water heater, you’ll be spending far less on your monthly utility bills than you would otherwise. In fact, on average, this equates to about $200 per-year. That means if you paid only $600 more to install a gas system, you’ll break even after three years, and then start saving in all the years after.

For most homeowners, the key determining factor in the gas versus electricity debate is whether or not they have a pre-existing natural gas connection. If your home does not have a gas hookup already installed, your project is obviously going to be a lot more expensive. If you have questions about this, or what it would take to get natural gas in your home, talk to our team.

Call Wagner for a water heater quote in Albuquerque

In this article, we’ve discussed the different options available to you as a homeowner. Now, it’s time to find the right water heater for your property—and determine just how much your new water heater will run you.

Here in Albuquerque, you’ll want to call our plumbing team at Wagner. We’re known for our upfront, honest estimates and superior water heater installation.

When you talk to us, we’ll advise you on which type of water heater is right for your home. We’ll also run through your other options, such as water recirculators and pressure balance devices. Finally, we’ll give you an upfront estimate for how much your new water will cost, with our expert plumbers handling every aspect of the installation.

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