Tankless water heater in the bathroom

Cost of Tankless Water Heater

On the hunt for a new water heater? You might have encountered the term “tankless water heater” or “tankless hot water heater.” These water heaters have become increasingly popular in recent years due to their energy efficiency and the fact that they provide hot water on demand without needing a large tank to store heated water.

While tankless water heaters can be more expensive to install than traditional tank water heaters, they can save you money on your energy bills over time. Additionally, they take up less space and may require less maintenance than traditional tank water heaters.

In this article, we’ll examine the cost of tankless water heaters, including electric tankless water heaters. We’ll discuss factors that can affect the cost of a tankless water heater, including maintenance, installation, and brand.

We’ll also explore the long-term cost savings of choosing a tankless water heater over a traditional one. So you can make an informed decision regarding upgrading your home’s hot water system.

What Is a Tankless Water Heater?

A tankless water heater is a type of water heater that doesn’t store hot water in a large tank. Instead, it heats water on demand as it passes through the unit. This means you can have hot water instantly without waiting for a tank to heat up.

Tankless water heaters come in both electric and gas models. Electric tankless water heaters are typically more affordable upfront, but they may require modifications to your home’s electrical system to handle the increased power demand.

On the other hand, gas tankless water heaters tend to be more expensive upfront but may be more cost-effective over the long term due to lower operating costs.

Modern gas water heater with temperature control knob

One of the main advantages of a tankless water heater is its energy efficiency. Since it only heats water when needed, keeping a large tank of hot water constantly heated is unnecessary.

Additionally, tankless water heaters take up less space than traditional water heaters, making them ideal for smaller homes or apartments.

Like any appliance, tankless water heaters require maintenance to keep them running smoothly.

Regular maintenance can prolong the life of your unit and prevent costly repairs down the line. Some maintenance tasks may include flushing the system, checking for leaks, and cleaning the water filter.

In Canada, where winters can be harsh, it’s essential to have a reliable source of hot water. A tankless water heater can help provide a steady hot water supply, even in the coldest months.

What Is the Cost of Installing Tankless Water Heaters in Toronto?

In Toronto, a tankless water heater typically costs between $2,000 and $6,000 (Canadian Dollars). On average, homeowners can expect to pay around $3,000 for installation.

How Much Do Tankless Water Heaters Cost?

The cost of a tankless water heater can vary depending on several factors, which we’ll discuss in the following paragraphs. Generally, an electric tankless water heater can cost anywhere from $500 to $2,500, while a propane tankless water heater may range from $1,000 to $4,000 or more.

While tankless water heaters may have a higher upfront cost than traditional water heaters, they are often more energy-efficient, which can lead to long-term cost savings. This is because tankless water heaters only heat water as needed rather than constantly heating and reheating a large tank.

Another advantage of tankless water heaters is that they provide a continuous hot water supply if the demand does not exceed the unit’s flow rate. This means you’ll always have hot water, unlike traditional water heaters that may need time to refill and reheat the tank.

Tankless Water Heater Installation Cost Factors

When it comes to the cost of installing a tankless water heater, there are several factors to consider:

Type of Tankless Water Heater

Condensing tankless water heaters are generally more expensive to install due to their higher efficiency, as they require additional venting and drainage systems. Also, they are energy-efficient.

Size and Capacity of the Tankless Water Heater

Larger units that can provide more hot water on demand may cost more to install than smaller units.

Location of Installation

The location and complexity of the installation process can impact the overall cost. For example, if the installation requires significant changes to your home’s plumbing or electrical systems, this can increase the installation cost.

Ongoing Maintenance

Regular tankless water heater maintenance is necessary to ensure that it continues to operate efficiently and effectively, which can help prolong its lifespan and reduce the likelihood of costly repairs.

Also, if you’re looking for extra peace while enjoying your hot water, consider investing in the best noise-canceling earbuds in Canada to block out unwanted sounds.

How Much Does the Average Solar Tankless Water Heater Cost?

Solar water heater on roof of the house

Solar tankless water heater cost ranges from $2,500 to $9,000. The cost may vary depending on the system, tank size, type, and location. However, after considering tax credits and rebates, you can reduce the cost to 50% lower.

Labor Costs for Tankless Water Heaters

The cost of labor for a tankless water heater installation varies depending on several factors, such as the complexity of the installation, the type of tankless water heater installed, and the location of the installation.

Typically, professionals charge hourly rates ranging from $25 to $100. However, an electrician may need to do some rewiring for larger electrical units, which can increase the hourly rate from $50 to $100.

It’s essential to budget for these labor costs in addition to the cost of the tankless water heater itself. On average, labor costs for a tankless water heater installation can range from $500 to $1,500.

It’s important to note that although labor costs can add to the total installation cost, the long-term savings on energy bills and the increased lifespan of a tankless water heater make it a worthwhile investment.

Why We Recommend Electric Tankless Water Heater

There are several reasons why we recommend electric tankless water heaters, and they are:

Energy Efficiency

Electric tankless water heaters are very energy-efficient as they only heat water when needed, unlike traditional tank-style water heaters that constantly heat water even when it’s not in use. Using an electric tankless water heater can save money on your energy bills.


Electric tankless water heaters are typically smaller than traditional water heaters, so they take up less space in your home. This can be particularly beneficial if you have limited space in your home or want to free up some storage space.


Electric tankless water heaters tend to last longer than traditional water heaters, as they do not suffer from the same problems with rust and corrosion that can affect tank-style water heaters. This means that you can save money in the long term by not having to replace your water heater as frequently.

Continuous hot water supply

Electric tankless water heaters can provide a constant supply of hot water, which can be particularly useful if you have a large family or use a lot of hot water in your home. Unlike traditional water heaters, which can run out of hot water if not sized correctly, electric tankless water heaters can provide hot water on demand.

Environmentally friendly

Electric tankless water heaters are environmentally friendly, as they do not produce greenhouse gas emissions or wastewater, unlike traditional tank-style water heaters. As a result, you can reduce your carbon footprint by switching to an electric tankless water heater.

Factors That Affect Tankless Water Heater Costs

Several factors can affect the cost of a tankless water heater. Firstly, the unit size needed will determine the price, with larger units being more expensive.

Secondly, the brand and model of the unit can also affect the cost, with high-end models being more costly than budget-friendly options.

Installation costs can also vary depending on the complexity of the installation and whether any additional work is needed to install the unit.

Other factors affecting the price include the fuel used to power the unit and additional features such as remote control or energy-saving settings. Finally, the location and availability of the unit can also impact the cost, with branches in more remote areas often being more expensive.

What Size Tankless Water Heater Do I Need?

The best sizing factor for a tankless water heater is its flow per minute rate, and our recommendation for the flow rate of tankless water heaters varies based on the number of bathrooms in a home.

For homes with one bathroom, we suggest a flow rate of 5-7 gallons per minute (GPM), while for homes with two bathrooms, a flow rate of 8-9 GPM is recommended.

A flow rate of 8-11 GPM is ideal for homes with three or more bathrooms. However, we have found that smaller tankless water heater units with a flow rate of 4-5 GPM are suitable for specific applications such as studio apartments or small homes with only one bathroom.

Condensing vs. Non-Condensing

These are two types of tankless water heaters. Condensing units are more energy-efficient as they capture the heat from the exhaust gases and use it to preheat the incoming cold water. This process creates condensation, which is drained out through a special pipe.

Non-condensing units do not have this feature, making them less efficient. Its units rely on a secondary heat exchanger to preheat the water, being less efficient than the condensing process.

Non-condensing units are less expensive upfront. However, they could be more efficient, leading to higher operating costs in the long term. In contrast, condensing units are more costly but energy-efficient, leading to lower operating costs over a long time.

Tankless Water Heater Installation: Is It Worth It?Plumber installing tankless water heater

Tankless water heater installation is worth it if you want a more energy-efficient and space-saving option. Although the upfront cost may be higher, long-term energy savings can make it worthwhile.

Research indicates that the global tankless water heater market was valued at USD 3.26 billion in 2021, and it is projected to grow at a Compound Annual Growth Rate (CAGR) of 8.7% between 2022 and 2030.

Additionally, the continuous hot water supply and longer lifespan of tankless units make them a popular choice for many homeowners.

Do Tankless Water Heaters Increase Electric Bill?

Yes, tankless water heaters can increase your electric bill due to the electricity needed to power the unit.

DIY Tankless Water Heater Installation vs. Hiring a Professional

While it is possible to install a tankless water heater yourself, just like hiring HVAC technicians to install the best air conditioner, we recommend hiring a professional plumber for the water heater job.

The reason is that tankless water heaters need specific installation and expertise for safe and efficient operation. A professional plumber can install the unit and adjust gas or electrical connections with knowledge and tools.

Additionally, a professional installation will likely include a warranty, which can provide peace of mind in case of any issues. On the other hand, attempting a DIY installation can be risky and may result in potential safety hazards or damage.

Can I Run Out of Hot Water With a Tankless Water Heater?

Tankless water heaters provide hot water on demand but can run out if too small for household needs.

Choosing the right size unit is essential based on the number of bathrooms and how much hot water is typically used in the home to avoid running out of hot water.

An appropriately sized unit should provide continuous hot water for all household needs, such as showering, washing dishes, and doing laundry, without any interruptions or loss of hot water.


Tankless water heaters are a popular alternative to traditional units. They provide continuous hot water on demand while being more energy-efficient and space-saving.

Although they have a higher upfront cost, they offer long-term savings in energy costs and increased lifespan. Choosing the right size and having a professional installation can also impact the efficiency and performance of the unit.

We recommend considering these factors and weighing the pros and cons before deciding if a tankless water heater suits your household. Enjoy your water, and please remember to share this article.

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