How Much Does it Cost to Install a Water Heater?

January 24, 2022

We compare the costs of installing different types of water heaters.

For Florida homeowners, the cost to install a new water heater could be anywhere between $1,590 and $10,000. You probably think that’s a huge range (and it is!), but you can quickly narrow down which side of the cost spectrum you'll be on depending on the desired type of water heater.

Many factors go into the cost to install a water heater, including:

  • Water heater fuel type
  • Water heater energy factor
  • Tank vs. tankless water heaters
  • Water heater size

We’ll discuss the cost factors below in more detail so you’ll have a better idea of what you’ll pay for the installation.


Ready to install a water heater in Florida?

At Red Cap Plumbing and Air, we install tank water heaters or tankless water heaters fueled by gas or electricity. We also install solar water heaters. With so many options, we’re sure to find the best water heater for you. Estimates are free when you install with us, so schedule one today by calling us at (813) 963-3056.


Water Heater Fuel Type

The water heater’s fuel type can impact the cost of installation.

When it comes to fueling your water heater in Florida, there are 3 options: gas, electric, and solar. If you’re solely concerned about cost, then you can think about the differences this way:

  • Installation cost: $$$ solar > $$ gas > $ electric
  • Operating cost: $$$ electric > $$ gas > $ solar

Electric water heaters are the least expensive to install, but the high price of electricity means your monthly energy bill will be more significant.

With all this in mind, you might think installing a gas water heater is the most economical choice, and for many Florida homeowners, that is the right decision.

However, according to the Miami Herald, utility companies in Florida (e.g., FPL, Duke Energy, and Tampa Electric Co.) are contending with high natural-gas prices driving up costs for consumer electric utilities. Let’s give some additional focus to solar water heaters to help you make the most informed choice.

Solar water heaters could be an excellent choice to install.

Solar-powered water heaters will be the most expensive to install, but they can cut your energy costs by 50–80%. Not to mention, many federal tax credits can help reduce this upfront cost. In the long term, solar water heaters live longer than gas and electric water heaters and require little maintenance. With annual energy savings in the $200–$300 range and the increase in natural gas and electric bills, solar water heaters have great potential to save you money in the long run.

Beyond fuel type, several other factors impact water heater installation costs.

Water Heater Energy Factor

Every water heater has an Energy Factor (EF), which indicates the water heater’s efficiency. The higher the EF, the more expensive the water heater will be.

EF considers how efficiently water is heated and how well the water stays heated as it circulates through your water heater system. EF is important because a more efficient water heater will cost less to operate. However, as discussed above, operating costs involve various factors, and a water heater should not be selected solely based on EF.

Tank vs. Tankless Water Heaters

What’s the difference between a tank and a tankless water heater?

One of the most critical factors impacting water heater installation cost is whether the water heater has a tank or is tankless. Tankless water heaters are generally more expensive than water heaters with a tank. While tankless water heaters are more expensive, their benefits may outweigh the added cost for some homeowners.

Tank water heaters cost between $1,590 and $2,300, with the average cost being $1,900. They heat water in a large tank and then distribute the hot water throughout your home. Because the size of their tank restricts the amount of hot water, homeowners can run out of hot water before it replenishes. You'll also need ample space to store a tank water heater.

The Energy Guide label on the water heater will tell you its first hour rating. / Source: Federal Register

When selecting a tank water heater, a vital factor to consider is its First Hour Rating (FHR). The FHR indicates how much hot water the water heater can produce in an hour. The higher the FHR, the more expensive the water heater will be because it’s the minimum amount of water a tank water heater should be able to hold at any given time to ensure there’s enough hot water for all of your household activities.

You can calculate your FHR using this chart:

Calculate your household’s peak hour demand and FHR with this chart. / Source: Department of Energy

You can see in this example that the peak hour demand of a water heater is 66 gallons. So, this household needs enough hot water to potentially run 3 showers, shave, and handwash dishes simultaneously. 66 gallons is the peak demand for hot water. Therefore, this household needs a tank water heater with an FHR of 66 gallons or more.

Tankless water heaters cost between $2,800 and $4,800, with an average cost of $4,100. Tankless water heaters heat water continuously, so you'll need to consider flow rate when selecting a system. Flow rate indicates how many gallons of hot water per minute is produced. Similar to FHR, the higher the flow rate, the more expensive the tankless water heater.

The primary benefit of a tankless water heater is that you will never run out of hot water since they heat water continuously. Additionally, tankless water heaters are small and can easily fit under a sink or in a closet.

Water Heater Size

Getting a 40-50 gallon water heater should suit most households.

The larger the water heater, the more expensive it will be to install. However, this doesn’t mean you should purchase the smallest water heater available to save money. The key is to purchase the right-sized water heater to suit your family’s needs.

If you buy a water heater that’s too small, you’ll constantly run out of hot water. If you buy a water heater that’s too large, you risk unnecessarily high energy bills.

The perfectly sized water heater will be the water heater capable of providing enough hot water during your times of peak usage. Most families require a water heater in the 40–50 gallon range, but this will depend on the type of water heater. To help determine the right size for you, check out our step-by-step guide to sizing a new water heater.


When You’re Ready To Install a Water Heater, Contact the Trustworthy Professionals at Red Cap Plumbing and Air.

Red Cap plumbers will always wear booties to protect your home during water heater installations.

At Red Cap Plumbing, we guarantee our plumbers will be available, thoughtful, and on time for every job because family-owned businesses should treat you like family. Start your water heater install by calling us at (813) 963-3056 for an estimate. We install tank water heaters or tankless water heaters fueled by gas or electricity as well as solar water heaters.

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