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Install a tankless water heater in your new construction projects, home or business remodels, or replace an existing outdated water heater that is driving up your utility bills. Tankless water heaters provide continuous hot water by operating on demand. Daniel Gonzalez of All Pro Plumbing, Heating & Air in Ontario, California, explains that with a tankless water heater, you no longer have to be restricted to a set number of gallons of hot water as you do with a traditional water heater. Traditional water heaters hold water in a tank and maintain it at a constant temperature, requiring a continual use of energy. Once the tank runs out of hot water, there’s a lag time while you have to wait for new water to heat up. Traditional hot water heaters are why the water gets cold when you’re No. 3 in line for the morning shower.

With tankless water heaters, explains Gonzalez of All Pro Plumbing, Heating & Air, you can have multiple showers going at one time while also doing dishes and laundry, and still not run out of hot water. That’s because tankless water heaters use a heat exchanger to heat water as it flows through the system. This "on demand" system makes tankless heaters much more energy-efficient. The life expectancy of a tankless water heater is also longer than a traditional water heater, says Gonzalez with All Pro Plumbing, Heating & Air; as long as you have proper professional maintenance, tankless water heaters can last 15-20 years, which is 5-10 years longer than the life of a traditional tank-style heater.

Tankless water heaters are more energy-efficient, can provide greater quantities of hot water at a time, are much smaller, and last longer than traditional water heaters. However, tankless water heaters cost more to purchase upfront than traditional water heaters, and may cost more to install, depending on your current plumbing system. If you’re thinking of upgrading to a more eco-friendly and energy-efficient water heating system, here are the cost factors for tankless water heaters.

Cost range

The average cost of a tankless water heater with installation can range anywhere from $3,200 to $10,000, says Gonzalez at All Pro Plumbing, Heating & Air. This cost can break down to $18 to $55 per month of the water heater’s lifespan. Prices vary based on size, features, modifications and location. While they are a bigger upfront investment than tank-style water heaters, tankless water heaters have longer warranties, are more efficient and provide more comfort, says Gonzalez.

Tankless water heaters can run on electricity, propane or natural gas. Electric models are typically point-of-use (meaning they are smaller and installed in the location where they will be used, such as under a sink). Models that heat an entire home are more likely to run on propane or natural gas, and will also be more expensive.

Factors that affect installation cost

The main factors that impact installation cost are the size of the tankless water heater, the gas line installation if you don’t already have one, venting, installation location and additional features you may want — like a timer, explains Gonzalez with All Pro Plumbing, Heating & Air. You can expect to pay more for a "smart" heater that lets you control the temperature via an app.

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