Updated: September 19, 2025
Written by Dan Simms
Laura Madrigal is the Home Design Specialist at Fixr.com, dedicated to identifying and analyzing significant changes within residential design. She is the author of leading trends reports on interior design, kitchen, and bathroom, and her insights have been featured in publications like Realtor and the New York Post.
Learn moreReviewed by Laura Madrigal
Having access to hot water is a necessity for safety and comfort, so while you may not think about it often, your water heater is a crucial part of your home’s plumbing system. It works tirelessly to provide hot water for washing dishes and laundry and for comfortable bathing, so it’s a staple of daily life.
The average cost to replace a gas water heater is $1,900, and most homeowners pay between $1,000 and $2,700. This cost is for a tank-style water heater, which is the most common option, and it assumes you already have a gas water heater with the required connections for the new water heater unit. Prices could increase if you’re changing your fuel source or the type of water heater you want. The size of the tank you need for your family and the local labor costs in your area will also play important roles in your pricing.
Gas Water Heater Replacement Cost
Cost to Install a Gas Water Heater by Type
The biggest factor affecting your gas hot water heater costs is the type of water heater you want to install.
Tank-style gas water heater: This is the most common type of gas water heater, and it’s the more affordable one. It heats water and stores the hot water in a tank so that it’s always ready for use. It’s possible to run out of hot water with heavy use, though.
Tankless gas water heater: Tankless models are more modern options that heat water on demand. As long as your unit is sized for your property, you’ll never run out of hot water. They’re also far more efficient since you never heat water you aren’t using, but natural gas tankless water heater installation costs close to twice as much as tank-style units.
Type of Water Heater | Cost Range |
Tank-style | $1,000 – $2,700 |
Tankless | $1,600 – $4,000 |
Gas Water Heater Installation Cost by Size
Regardless of the type of gas water heater you choose, you’ll need to size your system for your home and hot water usage habits. Tank-style water heaters come in sizes ranging from 30 to 80 gallons, in most cases, and tankless water heaters come in capacities measured in gallons per minute (GPM), usually ranging from 1 to 12, with the smaller capacities being useful for individual fixtures and larger capacities being applicable for entire homes.
With both types of water heaters, you can expect to pay more in material costs for larger storage or production capacities. You can use the estimates below for tank-style water heaters to get an idea of where your total will fall. For tankless water heaters, you should always have a professional size your system based on your peak and average hot water demands.
Capacity (Gallons) | Suitable For | Cost |
30 | 1 – 2 people | $700 – $2,100 |
40 | 1 – 4 people | $700 – $2,300 |
50 | 3 – 5 people | $900 – $2,500 |
75 | 4 – 6 people | $1,100 – $3,500 |
80 | 6+ people | $1,300 – $4,000 |
Labor Cost to Install a Gas Water Heater
Labor costs to replace a gas water heater account for around 20% to 25% of your total for a tank-style water heater, which means an average of between $200 and $650. For tankless water heaters, labor takes longer because your pro will need to mount your system to your wall and will likely need to make changes to your gas and plumbing lines to fit the new system. Because of this added complexity, labor for a tankless water heater installation is often closer to 50% of the total project cost. Labor costs to install a tankless water heater total between $800 and $2,000.
Some plumbers will charge an hourly rate instead of a per-project rate, in which case you can expect to pay between $45 and $200 per hour. When you’re installing a gas water heater, you won’t need to worry about hiring an electrician, so you shouldn’t face any additional hourly costs.
Labor costs always include installing the new unit and connecting the gas and water lines. They’ll usually include removing your old water heater and hauling it away, but some contractors will add a charge for this service, so ask yours before hiring if you should budget separately. Expect to pay an additional $100 to $500, with the lower end of the range being applicable for smaller tankless units.
Additional Cost Factors
The type of unit you choose to install, the capacity, and the labor costs to install it are the most significant things to consider when estimating your gas water heater installation costs, but there are some other minor cost factors that can play a role, too.
Location in the home: Where in your home your water heater is located can affect how easy it is for your pro to access the old unit, maneuver it out of your home, and install the new one. Installation in a cramped crawl space will usually be more expensive than installing in a spacious utility closet on the first floor.
Geographic area: Labor costs scale with the local cost of living, so installation totals will vary based on where you live. Expect higher costs per hour and in total in areas with a higher cost of living, like in and around major cities.
Venting and code requirements: Gas water heaters must be properly vented to prevent carbon monoxide buildup. If your venting needs replacement, expect costs between $500 and $1,100, closer to $500 for direct vents and nearer to $1,100 for power vents.
Brand: The brand of water heater you choose will affect the upfront material costs, with brands like Kenmore and Whirlpool usually costing less than units made by Rheem and A.O. Smith.
Permits: Most municipalities require permits for plumbing and gas line work. A simple permit typically ranges from $25 to $300, but if installation involves running a new gas line or making major plumbing changes, permit and inspection costs can reach $1,500 or more.
Switching fuel types: If you are converting from an electric or oil water heater to a gas unit, your labor costs will be significantly higher due to the need for new gas lines and plumbing work, which can add up to $3,500 or more.
Fuel type: Most homeowners and professionals use the term “gas water heater” to refer to a unit that uses natural gas as a fuel source, but technically, propane is another type of gas that can be used for water heaters. Propane water heaters cost about the same as natural gas water heaters, but they generally cost more to run.
DIY vs. Hiring a Professional
In some cases, it’s possible to DIY your water heater replacement, but it’s never a good idea, especially when it comes to gas water heaters. Installing a water heater, even if you’re swapping out an existing unit with a new one of the same size and dimensions, involves working with electrical connections, water lines, gas lines, and ventilation ducts. Mistakes can be dangerous and even deadly, so the money you’ll save on labor is never worth it.
Additionally, sizing your water heater properly is crucial for good efficiency and optimal performance under your home’s demands. Without an expert to assess your needs and size your unit appropriately, you could end up with an undersized or oversized unit, which can lead to a lack of hot water or unnecessarily high utility bills.
Signs Your Gas Water Heater Needs Replacement
The cost to replace a gas water heater can get expensive, especially if you’re going tankless, so one of the first things you should do is assess whether you need a replacement at all. Here are some signs you may need to replace your water heater:
You no longer get the hot water you need: One of the most obvious signs you might need a new unit is when you and your family routinely run out of hot water. This could be a sign of an undersized tankless unit or a tank-style water heater that has lost some efficiency.
You know your unit is nearing the end of its expected life: Tank-style water heaters last for 8 to 12 years, and tankless water heaters can last for 10 to 20 years. If your unit is within a few years of its expected lifespan, staying ahead of the breakdowns and increased maintenance costs could be worthwhile in the long run.
Your water consistently has discoloration: Over time, soft water can degrade your water heater’s internal components and lead to rusting, which can discolor your water. This could be a sign that a total replacement is in order, as corrosion will also suggest decreased efficiency.
Your water heater makes unusual noises during operation: Hard water can leave calcium and magnesium deposits in your water heater. If these build up over time, they can reduce your system’s efficiency and start making clinking noises during operation.
You’ve had issues with leaks: A leaking water heater can suggest a cracked water tank or other broken internal components, which means repairs likely aren’t possible, and a replacement is required.
You have unusually high energy bills: Aging or damaged water heaters will consume more energy to provide the required output, so spikes in gas bills or electric bills can suggest that it’s time to replace your unit.
A professional plumber can advise if a repair is possible or if a replacement is a better option. Generally speaking, if your water heater has 50% or more of its expected life left and the repair costs 50% or less of what a total replacement costs, the repair is probably the better option from a financial perspective. Consider a replacement if you’ve had multiple issues with your unit, though.
Gas Water Heater Monthly Cost
The average U.S. resident spends $266 per month on utilities, and according to the U.S. Department of Energy, about 18% of the total utility cost goes toward heating water. That means running your water heater will cost an average of $47.88 per month, or $574.56 per year.
Your fuel costs are expected to be higher for propane, as the delivery costs and the fuel itself are both more expensive. Natural gas water heaters are the most efficient and also the most affordable to run long-term, providing significant energy savings.
Gas vs. Electric Water Heater Monthly Cost
While natural gas is inexpensive, it’s also a fossil fuel, and burning even the most energy-efficient fossil fuels produces carbon dioxide and isn’t environmentally friendly. Burning natural gas also generates dangerous and potentially deadly carbon monoxide. Because of these factors, some homeowners consider switching to electric water heaters.
Electric water heaters are more expensive to run, costing around 30% more than using natural gas as a fuel source. That means an average running cost of just over $60 per month for an electric water heater as opposed to $47 per month to run a natural gas water heater.
How to Choose a Gas Water Heater
There are countless gas water heaters to choose from, with different brands, storage capacities, GPM ratings, upfront costs, and efficiency levels all complicating the decision. Here are a few key things to prioritize when deciding which unit is a good fit for your home:
Capacity based on demand: One of the first things you should consider is the capacity you need. It’s best to have your professional determine your ideal water heater size, but be sure to consider the following, too
First hour rating (FHR) for tank-style: Tank-style water heaters need to have an FHR that matches or exceeds the gallons of hot water you’ll need in a given hour during peak hot water consumption. You can calculate this using the worksheet from the U.S. Department of Energy, or you can have your expert calculate the ideal capacity.
Gallons per minute (GPM) for tankless: Tankless units need to meet or exceed the output in gallons per minute you’ll use during peak hot water consumption. You can get a general size based on the number of people in your home, but a professional will take a more thorough approach to sizing to get it right.
Energy efficiency: You should also carefully consider the efficiency of your unit, as water heaters with a higher efficiency rating will use less energy to provide a similar result, leading to lower running costs over time. Look for ENERGY STAR-certified products, and pay attention to Energy Factor (EF) and Uniform Energy Factor (UEF) ratings to get a sense of how different models compare.
Smart features: Many modern homeowners look for smart features in their appliances, and some high-end water heaters boast some impressive options. These include adaptive heating to provide maximum comfort at lower costs based on expected demand, smart leak detection, automatic shut-off for safety, remote monitoring, and even vacation or eco modes, which reduce consumption during periods of low demand.
Local climate and groundwater temperature: Finally, you should consider the climate in your area and how the groundwater temperature can influence your hot water needs. In extremely cold climates, your pro may suggest upsizing your water heater to ensure your unit meets demands, and you may be able to get away with a smaller-than-average unit in hotter climates.
Gas Water Heater Maintenance
Once you have your new gas water heater installed, keeping up with maintenance is the best way to extend its lifespan and get the most value out of the unit. Here are some tips for properly maintaining a gas water heater to ensure long-term safety and performance:
Flush the tank in tank-style units: Sediment build-up in tank-style units will reduce efficiency and cause your unit to overwork itself into an early grave. Flush the tank once a year, and aim for twice a year if you have hard water in your area.
Check the sacrificial anode rod: Tank-style units also use a sacrificial anode rod that purposefully corrodes first to avoid corrosion of the tank lining. Check the rod every two to three years and replace as needed.
Replace the filter in tankless units: Tankless units rely on filters to keep sediment out of the internals. Replace the filter every six months to avoid problems and premature failure.
Set a good temperature: Most homeowners prefer water temperature settings between 120 and 140 degrees Fahrenheit. Go toward the lower end to prevent scalding if you have kids and to reduce utility costs. Go higher if you feel you need hotter bathing temperatures for comfort.
Check the pilot light: Check your pilot light once a year. The flame should be short and bluish-green. If it’s yellow, you may have dirty burners that are zapping your unit’s efficiency. Have a pro service your unit.
Schedule regular tune-ups and maintenance: You should schedule a tune-up and routine maintenance every two to three years to ensure your unit continues functioning efficiently.
FAQs
A tank-style gas water heater will last for 8 to 12 years, on average, while a gas tankless water heater costs more but will last for 10 to 20 years. The lifespan will vary based on the climate in your area and how hard the unit has to work to heat your water, how often you have routine maintenance done, the demand you place on the appliance, and the quality of your water.
A tank water heater has a large reservoir, usually between 30 and 80 gallons, that holds hot water and maintains the temperature so that it’s ready for use. A tankless water heater heats water on demand, so you only ever pay to heat the water you’re actually using. Tank-style water heaters have no delay for hot water and are more affordable, but tankless water heaters are more efficient, and properly sized units will provide endless hot water for your home.
It takes two to three hours, on average, for a professional to install a gas tank-style water heater, provided you already have the gas and water connections necessary. Installing a tankless water heater requires more work to route utility lines to the new unit, so expect the installation to take between four and six hours.
Sizing a gas water heater is deceptively difficult, so it’s best to have a professional determine what size you need. However, you can use averages to get an idea of what size will suit your home. Generally speaking, a 30- to 40-gallon water heater will suffice if you have two to four people in your home, a 50- to 75-gallon water heater is best if you have three to six people, and an 80-gallon unit is ideal for six or more people. Tankless water heaters require more calculations, so always have a pro help choose an appropriate output rating.
Many modern gas water heaters need electricity, especially if they use an electric ignition rather than a pilot light, if they rely on powered ventilation, if they have smart features, or if they feature a control panel. This means that modern gas water heaters won’t work during a power outage. Some basic models use mechanical temperature sensors that automatically open gas valves as the water temperature drops, in which case they can operate during power outages.
There’s no single, universal answer to this question, and which is best for you depends on a few factors. Electric water heaters are more environmentally friendly, especially if you power them with solar or geothermal energy. Electric water heaters are also safer, with no risk of carbon monoxide production, and they’re more energy-efficient. Gas water heaters have a much higher output of heat, though, so they’re more reliable in colder climates, and the higher output makes whole-home tankless systems possible, which isn’t realistic for electric water heaters in most cases.