How Much Does It Cost to Replace an Electric Water Heater?

Understanding the Cost of Replacing an Electric Water Heater

There are two types of electric water heaters: Tank and tankless. The tank-style water heater is what most people are familiar with. It’s a large tank that holds up to 100 gallons of water. Smaller tanks can hold 20 gallons. These are by far the most common options for water heaters in U.S. homes today. Tankless water heaters are about the size of a suitcase. They have a coil system for heating the water that flows through the tank. There is no storage unit, which explains why they are so small. Now that you know the difference between types of water heaters, read on to learn about electric water heater replacement costs.

Average Cost of Electric Water Heater Replacement

In most cases, a tank water heater costs less than a tankless water heater does. Electric water heater replacement cost runs between $700 and $2,500, on average, for the size of tank most homes will use.

Keep in mind that the brand you choose, as well as your energy-efficient options, can affect the bottom line as well. There could also be a small cost for disposal of the old unit (usually $250 or less).

Replacement of a tankless water heater costs between $1,400 and $3,900. Repair costs run higher with a tankless water heater as well. Expect to pay between $100 and $500 to repair a tank water heater, but between $100 and $1,300 to repair a tankless model.

Here’s a further breakdown of the average costs:

Factors That Affect the Cost of Replacement

Electric water heater replacement cost is largely dependent upon the size of the unit, but there are other factors to consider as well.

• Labor Costs: Water heaters that take some time to move into the home and set up. A tank water heater is a relatively straightforward installation, but tankless models can take twice as long to install. Adding in new plumbing, rerouting old lines, and running new electrical wires can add to the complexity and cost more. Labor costs for straightforward installation run between $45 and $200, on average, depending on your location.
• Brand: The brand you choose will play a role in what you can expect to pay. For instance, Whirlpool and Kenmore are popular brands that start at $350 for a water heater and go up from there, usually into the $1,000 to $1,500 range. A higher-end brand, such as Rheem, can run between $600 and $2,300 for the same style and size of unit.
• Installation Difficulty: Labor costs will likely be higher for installing a tankless water heater, but what about installing a new water heater in an area that is difficult to access? Many contractors will take into account how difficult it will be to work in a tiny space and charge a higher price for the effort.
• Capacity: The size of a traditional tank water heater affects the bottom line. Tankless models are no different. They’re rated by gallons per minute. The more gallons they can handle, the larger the unit will likely be, raising your costs.
• Energy Efficient Options: Water heaters with good energy efficiency options cost more initially. However, keep in mind that these units will likely save you a significant amount over the course of the water heater’s lifespan. Weigh the estimated savings over time against the current costs to determine which options are right for you.
• Permits: Some areas require permits to replace or install a water heater. If you need a permit, expect to pay between $25 and $300 for it. While electric water heaters don’t require permits, you may need one for a gas water heater.

The Water Heater Installation Process

When choosing a new water heater, weigh your options carefully. Ensure that you purchase a water heater that has enough capacity to handle your family’s needs, as well as what you might need in the future. (For instance, a couple planning to grow their family might want to choose a water heater that is larger than currently necessary. They know they’ll probably need a larger unit within the next few years.)

Once you have chosen your new unit, choose your contractor to install it for you. Get several quotes from local contractors to help you decide what fits into your budget.

In some cases, you might need some plumbing or electrical modifications. Speak with the contractors about this and figure out who to hire for these parts of the installation.

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The process of installation is easy once it begins. The contractor will remove the old unit and set the new one in place. They will work with a plumber or electrician, if necessary, to ensure smooth installation. The process might take longer if you have limited space or need certain upgrades to meet updated building codes. Still, you can expect installation to take just a day or two.

Why Professional Installation is Necessary

While it might seem as though installing a water heater yourself would be easy, there are many things that can go wrong. In some areas, it’s not legal to install one on your own, and there is a reason for that. There are far too many things that can go wrong with the installation. Hiring a professional helps ensure that the water heater is safe for use, adheres to all building codes, and doesn’t lead to the potential for hazards down the road.

Also keep in mind that if your water heater has a good warranty, installing it on your own could negate your options. Professional installation helps ensure your warranty protection stays intact.

Signs You Need to Replace Your Electric Water Heater

How do you know when it’s really time to replace the old electric water heater? Here are a few good signs that tell you it’s time to start researching your options for a new model.

• Inconsistent Water Temps: If the water temperature begins to fluctuate, you’re likely dealing with a water heater that is close to failing.
• Water Discoloration: Does your hot water look a little cloudy? That could be due to sediment buildup, rust, and other problems with the tank. Now is the time to look for a replacement.
• Strange Noises: Water heaters should run quietly, even when they’re producing a good amount of hot water for your tap. If you hear banging, hissing, rumbling, or popping sounds from your water heater, call a professional right away.
• Leaks & Pooling Water: You might notice water leaking or pooling below or around the hater or its pipes. If so, call in a professional to help you decide if it’s worth repair or if you need to opt for replacement.
• Old Age: If your water heater has been providing faithful service for over a decade, the life is starting to decline. Begin the process of replacement now by looking for an energy-efficient model. Keep in mind that some water heaters can last for up to 20 years, so you’ve got some wiggle room here.
• More Frequent Repairs: Did you repair a leak last year and now you have to do the same this year? As a water heater breaks down, repairs become more frequent. It’s more cost-effective to simply replace it with a new model and relieve yourself of the worry.
• Higher Utility Bills: If you notice that your water bill is ticking upward every month, it might be the water heater that’s the issue – especially if you notice any of the other signs on this list.

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It’s always a good idea to call a professional and get their take on the situation. Sometimes the problem is simply a valve replacement or a pipe that needs some work. Your water heater could continue working great for years after that repair. But it might also be on the verge of catastrophic failure. Only a professional can tell you for sure.

Long-Term Benefits of Replacing Your Electric Water Heater

Upgrading your water heater can bring immediate benefits. You’ll have strong hot water, the new unit will likely be quieter, and it shouldn’t require repairs for a while. Water heaters tend to be consistent workhorses during the first several years of their lifespan.

You might notice that your utility bills begin to drop almost immediately, especially if you have chosen a highly energy-efficient model.

If you are intending to sell your home soon, you might find that a new water heater gives you a small boost in home value. A new appliance is one that the buyers don’t have to worry about for years, and when you are selling your home in a tough real estate market, every bit of advantage counts!

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