Last updated: October 2026 · Cost data from the sources listed at the end
Replacing a standard 40- to 50-gallon tank water heater typically costs $600 to $3,100 installed. Home Depot’s average installed price for a tank heater is about $1,950, according to NerdWallet. Tankless water heaters cost more up front, roughly $1,400 to $5,600 installed, and hybrid heat pump models about $2,000 to $4,600. Labor, venting, code upgrades and switching fuel types are what push a quote up.
In this guide
- Water heater replacement cost by type
- Tank water heater cost by size
- Running costs: what you pay every year
- Extra costs that can show up on a quote
- When to replace your water heater
- Tax credits and rebates
- Can you replace a water heater yourself?
- Does homeowners insurance pay for a new water heater?
- FAQ
Installed prices including labor. Permits ($50–$200) and haul-away of the old unit ($75–$500) are sometimes extra. Labor is often half or more of the bill.
Water heater replacement cost by type
| Type | Unit only | Installed | Lifespan |
|---|---|---|---|
| Standard tank (40–50 gal) | $400–$2,100 | $600–$3,100 | 8–12 years (up to ~15) |
| Tankless | $600–$2,600 | $1,400–$5,600 | 15–20 years |
| Hybrid heat pump | $1,500–$3,000 | $2,000–$4,600 | Varies by model |
| Solar | $1,000–$6,000 | $3,000–$9,000 | About 20 years |
NerdWallet’s 2025 analysis puts installed tank heaters at $600 to $2,500 and tankless at $1,400 to $3,900, which fits the middle of these ranges. Expect the top end for large units, difficult installations and areas with high labor costs.
Tank water heater cost by size
| Tank size | Typical installed cost |
|---|---|
| 30 gallons | $500–$1,900 |
| 40 gallons | $600–$3,000 |
| 50 gallons | $700–$3,100 |
| 65 gallons | $900–$3,400 |
| 75–80 gallons | $1,100–$4,000 |
Bigger isn’t automatically better. Your plumber should size the heater on your peak hot-water use, such as several showers in a row, using the unit’s “first-hour rating” on the label.
Running costs: what you pay every year
The cheapest heater to buy isn’t always the cheapest to own. Typical yearly energy costs:
| Type | Approx. yearly energy cost |
|---|---|
| Electric tank | $530–$600 |
| Gas tank | $250–$420 |
| Electric tankless | $340–$540 |
| Gas tankless | $220–$480 |
| Hybrid heat pump tank | $160–$190 |
If you have an electric tank heater, a hybrid heat pump model can cut the energy bill substantially, so it often pays back its higher price over its life. Your actual costs depend on local energy prices and how much hot water you use.
Extra costs that can show up on a quote
| Item | Typical cost |
|---|---|
| Permit | $50–$200 |
| Removing and disposing of the old heater | $75–$500 |
| Expansion tank (often required by code) | $100–$400 |
| Code compliance updates | $75–$500+ |
| Replacing existing venting | $100–$600 |
| New venting (first-time install, e.g. tankless) | $500–$1,500 |
| New dedicated electrical circuit | $250–$900 |
| Gas line upgrade | $350–$2,000 |
| Moving the heater to a new location | $500–$2,500 |
Going from a tank to a tankless heater often needs a larger gas line, new venting or a bigger electrical circuit. That is why labor for tankless installs runs about $600–$2,500 versus $200–$1,000 for a tank swap. Ask for these items to be listed separately on the quote.
When to replace your water heater
- The tank is leaking. A leak from the tank body means it has rusted through and can’t be repaired. See water heater leaking: what to do.
- It is over about 10 years old and needs a major repair.
- A repair would cost around half the price of a new unit or more.
- Rusty or discolored hot water, rumbling noises, or hot water running out faster than it used to.
Plan the replacement before the old heater fails. An emergency swap leaves you with whatever unit the plumber has on the truck and can add an after-hours charge.
Tax credits and rebates
The federal Energy Efficient Home Improvement Credit, which covered up to 30% of the cost of qualifying heat pump water heaters, only applies to equipment placed in service before December 31, 2025, according to the IRS. For installations in 2026, check instead for utility rebates and state programs: some utilities offer rebates on hybrid heat pump water heaters. Search your utility’s website or the DSIRE database before you buy.
Can you replace a water heater yourself?
Experienced DIYers sometimes replace electric tank heaters, but most homeowners should hire a licensed plumber. Water heaters involve gas lines, venting, electrical connections and a pressure relief valve that has to be installed correctly. Many areas require a permit and inspection, and some manufacturers require professional installation for the warranty to apply.
Does homeowners insurance pay for a new water heater?
Generally not when it wears out from age or corrosion. Insurance may cover water damage to your home from a sudden tank failure, and some insurers sell equipment breakdown coverage that pays for appliances that break down. See does homeowners insurance cover water damage.
FAQ
How much does it cost to replace a 50-gallon water heater?
A 50-gallon tank water heater typically costs $700 to $3,100 installed, depending on fuel type, brand, labor rates and any code upgrades needed.
Is tankless worth it over a tank water heater?
It can be if you plan to stay in the home for many years: tankless units last about 15 to 20 years and use less energy, but they cost more to buy and install, especially when switching from a tank.
How long does it take to replace a water heater?
A like-for-like tank swap usually takes about 2 to 6 hours. A new tankless installation can take a full day or longer.
What is the cheapest water heater to run?
Hybrid heat pump water heaters typically have the lowest yearly energy costs, around $160 to $190 a year, followed by gas tankless and gas tank models.