Hot Water Heater Replacement Cost Factors

Water heaters are important appliances that are used to heat water in the home. They are almost necessary in order for your home to function as it should. So having one is hardly an option at this point in time.

water heater replacement cost

However, these water heaters don’t last forever. They do need to be replaced. When you do replace them, you can make the choice to switch the type you have in order to save money, either upfront or in the long run.

What Is A Water Heater?

Hot water heaters are tanks that heat water and keep it at a constant elevated temperature. They are also used to store water so you always have a reserve ready to use at any given time. More than likely, your home has a water heater.

The size of the water heater you have will depend on the size of your home and the size of your family. But you definitely have one if you have hot water. The only other option is a boiler which is more or less extinct in private homes.

Does Your Water Heater Need To Be Replaced? 

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There are many signs that your hot water heater needs to be replaced. These signs aren’t always consistent but a plumber will know exactly what the problem is right away if you are experiencing them. 

Cold Water

This is a telltale sign that your hot water heater isn’t working. If your water isn’t getting as hot as it used to then you probably need to fix your hot water heater. It could not be storing as much water or it could not be heating it.

Even if the water is warm but not cold, it is probably a hot water problem. To test it out, don’t use the hot water for a few hours and then check to see if you have hot water. This can let you know if it isn’t holding water or heating water. 

High Utility Bills

If your water and electric bills are higher than usual and you don’t know why then it may be your hot water heater. What most people don’t know is that problems with your water heater can affect both bills.

People will use more water to make up for the fact that the water isn’t getting hot enough fast enough. You will also use more water if there is a leak. Then, of course, the water heater is usually run on electricity. 

Older Than 10 Years

Even if you don’t have problems, water heaters usually start to fail after about ten years. Most of them won’t have problems until fifteen to twenty years after you get them, but ten is the starting point for problems.

So after this point, pay close attention and take care of any problems early. This way, the water heater you do have will last longer than it normally would and you can put off getting a new one before you need to. 


If there are unexpected leaks coming from the water heater closet or if the water heater itself is leaking, then it needs to be repaired or replaced. This can waste a lot of water which isn’t energy-efficient or environmentally healthy. 

Have someone come and take a look at the heater right away to find out if the water heater needs to be replaced. It may just need a 15-minute patch, but a professional should still do that for safety reasons. 


If you hear weird noises coming from your water heater then it needs to be checked. That said, even if the noises start appearing when you turn on the water or coming from the pipes, it’s a good idea to get it checked.

Noises are signs of problems that you can’t see. They can be light problems or serious problems, but either way they need to be taken care of as soon as possible. 

Water Tastes Different

If your water tastes different, then go ahead and have the heater and pipes checked. There are many things that can cause water to taste weird, but if there is a rusty taste then it just might be the water heater.

If your water heater is new then it is likely something else. But if the water heater is ten or more years old, there’s a good chance that it is your water heater that is rusting or growing something more sinister. 

Water Heater Replacement Cost

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Replacing a water heater can be quite pricey in certain circumstances. The average cost is around $1000, which isn’t all that bad considering the huge difference that it can make. But it’s the range that really gets to people.

You may pay as little as $500 for a replacement if you have a small, simple heater. But if there are more problems, you could pay thousands of dollars that stack up quickly without the option for turning back. 

What Makes Up The Water Heater Replacement Cost?

The cost of your water heater replacement depends on many different factors. These are the things that will affect the final cost of replacing your hot water heater. Check them out to get a better estimate. 


Your geographical location affects the cost of your hot water heater. Just how much it affects the cost can’t be figured by anyone but a local contractor. The cost fluctuates with the economy, supply and demand, and more.


There are many different sizes for hot water heaters. The 40-gallon tank is the most common size, which should be under $1000. Those under 40 can cost as little as $200 while those larger can cost up to $4000.

Tank Or Tankless

This is a huge decision. Water heaters come in two different types: tank style and tankless. A tank water heater stores hot water in a tank and will hold somewhere between 30 to 80 gallons. This accounts for more than 90% of all water heaters in the USA.

Tankless water heaters on the other hand are at least twice the price of tank water heaters. They supply endless hot water but are more difficult to maintain but they last a lot longer than tank water heaters. 


There are multiple types of contractors that you may need to replace your water heater. The first type is usually a plumber. The second is the electrician. Then the third is the construction worker that will frame it. 

Most of the time, all three of these are needed. Plumbers will charge around $80-$100 an hour, electricians will charge around the same, and general contractors will charge somewhere between $30 and $80 an hour. 


Permits aren’t needed for every job, but you usually need to get one in order to work on a hot water heater. You’ll usually pay a couple of hundred dollars for a permit, but the price changes depending on your region and local laws.

You can call and get your own permit or you can have the contractor do it for you which will simply add to your bill. This is an easier way to do it because it is easier for a contractor to get a permit than a homeowner. 

Water Or Gas

There are many different ways to power a hot water heater. However, converting from one to the other can cost a lot of money. You usually won’t pay more than $1000 for this job but that’s on top of what you are already paying.

Heater Placement

Where you place the hot water heater matters a lot. Because you will have to run lines to all of your other appliances, sinks, and any water supply. So take this into account when placing your hot water heater.

The closer something is to the heater, the less water it will use and the hotter the water will be. Because the water has to run along the pipes to reach it. It also matters if the area is level, above, or below the hot water heater. 


You will be charged for every material used for your hot water heater. You will be charged for wood for framing, pipes for piping, and the hot water heater itself. When you don’t buy the materials yourself, you’ll probably pay extra too. 

That said, it’s usually better to have the hired contractors buy the materials though since they know exactly what to get. It’s more of a waste to buy something you don’t need than to pay extra for something you do need.

Types Of Water Heaters

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The type of water heater you have depends on the type of fuel it uses. There are many more different types of fuel than there used to be. These are the main types of fuels used for water heaters in today’s world.


Gas and propane water heaters are a common choice and alternative to electric-powered water heaters. They are more expensive at first but are usually cheaper and better for off-the-grid or winter-time power outages. 


Electric water heaters are cheaper at first but cost more in the long run. They are the most popular choice for water heaters because they don’t need much extra, to begin with. Not if you use electricity anyway.

It usually costs $1000 to $2000 but can cost less in some cases. It isn’t a great option if you need a lot of water fast unless you run a tankless water heater. 


Heat pump water heaters cost a little more than electric water heaters but not by much. They’re very efficient, using a heat pump to pull the heat out of the surrounding environment and transfer it to the water.

They don’t use much energy and recycle the heat. They are a great option but tend to be expensive for how much you get. The larger ones cost far too much for a small home and aren’t going to save you money in the long run.


Trying to go greener with solar panel companies? Well, you are in luck. Solar-powered water heaters are becoming increasingly popular. The average cost for a solar water heater is between $1,500 to $5,000.

But this is just the average. It can actually cost over $10,000 to get started, which is usually what deters people from using them. Hopefully, in the future this will become the norm and prices will drop substantially.