Your water heater is an essential part of your home, heating water for showers, dishwashing, laundry and more. On average, a traditional water heater will last 8-12 years. The general consensus is that it’s better to replace your water heater with a new one than to repair one that’s 10 years old or more. Older models are less energy-efficient and thus more costly to run than newer models with better technology. Here are some indicators of when it may be time to replace an old water heater instead of repairing it:

• Leaks: If leaking is not caused by loose connections, the water may be seeping out through slight fractures in the metal of the tank that have formed over time.
• Strange noises: Clanking, rumbling and other noises can mean that sediment has formed on the base of your tank, contributing to fissures leaks, and inefficiency.
• Age: If it’s more than 10 years old, it’s probably time to replace.
• Discolored or rusty water: Have a pro check it out; if the problem isn’t resolved by draining and cleaning, you’ll want to replace the heater.
• Lack of hot water: Inconsistent heating and hot water supply that runs out too quickly likely means it’s time for a new unit.

You’ll know when it’s time to install a new water heater. Water heater installation costs average between $360 and $780 nationally, with rates increasing depending on the project. The total project cost will be higher when you include the cost of the heater itself. Select your new water heater based on the number of occupants in your home and the number of gallons of capacity you’ll need. Installation costs can vary based on the type of water heater you are removing and the type you are installing, any necessary repairs, regional cost of labor, and whether disposal of the old heater is included. Natural gas water heaters retail on average between $650 and $900 for standard models. Electric water heaters range between $300 and $700 for standard models. Tankless electric water heaters retail on average between $250 and $700 for standard models. Tankless gas water heaters retail on average between $200 and $1,300.

A company may charge approximately $1,000 to replace a 50-gallon tank-style electric water heater (not including any upgrades required by building codes). Replacing a gas-powered water heater might cost $1,100 (not including code upgrades). Some companies roll the disposal of an old heater into the overall cost of the new water heater installation. Other professionals charge an additional removal fee that can range from $35 to $150.

Nationally, the average water heater repair cost ranges between $120 and $200, although prices can range up to $400 or more. Water heater repair costs will depend on the type of water heater you have (tankless, electric, natural gas, etc.), the source of the problem, the cost for new parts, and labor rates in your area. Common water heater issues include problems with the thermocouple, thermostat, heating element and leaks. Most standard electric water heaters have two thermostats and two elements. One example for the cost to replace a bad thermostat is $185 for parts and labor. Replacing both the thermostat and the heating element could cost approximately $150-$200. The thermocouple is a safety device that senses when the pilot light is burning and signals the gas valve to close if the pilot light goes out. If your thermocouple is bad or corroded, the average cost to clean and repair it could be between $350 and $400. If your water heater has started to leak, it is usually more cost-effective to invest in a new water heater than to repair it, unless you’re covered by a warranty.

Tankless water heaters usually cost more to install than traditional tanks, because many homes need to be retrofitted to accommodate the new system. Tankless electric water heaters retail on average between $150 and $1,200, and tankless natural gas water heaters retail between $200 and $1,300 on average. The lower prices ($150-$250) are generally for point-of-use tankless heaters that can be installed to boost hot water in high-demand areas such as the bathroom or kitchen sink. Tankless water heaters designed to heat whole homes usually start under $300 at the low end and go up to $1,400 or more. Pricing for whole-home varies with the heater’s technology and features. Nationally, standard water heater installation costs average $360-$780, but tankless water heater installation costs may range from $400 to $1,000, depending on the work needed. Some perks of tankless water heaters are that they have nearly double the life expectancy of traditional water heaters and are generally more cost-efficient. Homeowners may be able to save $100 or more per year on their utility bills with an Energy Star approved tankless heater, depending on how much hot water they use.

If the water in your house is not getting hot, it may be time for water heater repair. Nationally, the average water heater repair cost ranges between $120 and $200, although prices can range up to $400, depending on the problem and materials. Competent homeowners may also be able to try DIY fixes, whether they have a traditional gas or electric water heater or a tankless gas or electric heater. Troubleshooting the different issues that can arise with each of the styles requires some knowledge of how they operate and what red flags to look out for. For a natural gas water heater, the first step is to check whether the pilot light has gone out. It’s important to follow the manufacturer’s directions if you want to relight it yourself. If you smell gas, stop everything and call your gas company — the smell could signal a dangerous gas leak. If your household’s water is not getting hot enough, you can try increasing the temperature on the water heater’s front dial above the standard setting of 120 degrees; for safety, always turn off electricity to the unit before adjusting temperatures. If you keep running out of hot water, your household may simply need a higher-capacity water heater, so consider upgrading. Quick professional fixes include replacing the thermostat or heating elements and cleaning and repairing the thermocouple.

Your best bet is to leave this job to a licensed professional, which is also recommended because your warranty and local building codes may require it. Before you install a water heater by yourself, check to find out if you need a permit and if it’s allowed in your building.

Installing a water heater yourself requires experience working with plumbing, as well as a good knowledge of your home’s water system and pipe routing. You’ll also need plenty of experience working with electrical systems. 

While some areas may not require a permit to install a hot water heater, chances are you live in an area that does. Many cities issue permits to install or replace hot water heaters to protect the safety of the public.

For a licensed professional, it should take a few hours to remove an existing water heater and install a new one. This assumes that the site and materials are ready for the plumber to work and that no unforeseen issues arise.