Replacing a tankless water heater is a moderately difficult to complex project, generally considered a 5 to 8-hour job. Because it involves potentially hazardous elements like high-voltage electricity, gas lines, and venting, doing it yourself is only recommended if you are highly experienced with home plumbing and electrical.
A whole-home tankless water heater costs an average of $2,400, but costs can range anywhere from $1,600 to $3,800.
Unless you're highly experienced with plumbing services and electrical systems, tankless water heater installation is not a recommended DIY project.
Tankless water heaters typically last 15 to 20 years with proper care—nearly double the lifespan of traditional tank water heaters. Water quality, maintenance habits, installation quality, and household demand all affect longevity.
The Home Depot offers traditional water heater tanks and modern tankless units, both powered by either gas or electricity. Depending on your selection, the average cost for standard tank installation is generally between $1,600 to $2,400. Tankless installation can range from $2,400 to $5,400.
Drawbacks of Tankless Water Heaters
As discussed above, the biggest downside of owning a tankless water heater is its higher cost. The initial installation and unit costs are more expensive than a traditional storage-tank water heater.
Gas tankless water heaters installed by December 25, 2025, might qualify for a $600 federal tax credit. The government is offered this 30% credit through December 2025 to help cover the cost of the unit and its installation. This tax credit comes from the 25C Energy Efficient Home Improvement Tax Credit program.
Plumbers often hesitate to recommend tankless water heaters because they act like high-performance sports cars. Unlike traditional tank models that are "workhorses" and can function while mostly ignored, tankless units require precise installation, regular maintenance, and are highly sensitive to mineral buildup.
For larger households, multiple showers, laundry, and dishwashing may run at the same time. Hot water demand could reach 10–12+ GPM. A high-capacity tankless water heater—or even two units installed in parallel—may be the best solution.
Here are six of the most common problems and maintenance concerns for tankless water heaters:
In freezing temperatures, condensate produced by a condensing tankless hot water heater can freeze inside the drain line, which can cause leakage, operation issues or shutoff. To help keep your indoor tankless water heater from freezing, use a direct vent exhaust & intake system.
Here is a simple way to decide: Choose Navien if you want the highest efficiency, longest warranty, and built-in recirculation. Choose Rinnai if you have a large household and need the highest flow rates. Choose Rheem if you want a reliable brand at a lower price point.
Most tankless water heater installations take 4 to 10 hours, depending on your home's existing setup and how much infrastructure work is required. A simple unit swap wraps up in half a day.
Yes, Costco sells tankless water heaters. They do not typically stock these units on warehouse floors, but you can purchase them through Costco's website or by scheduling an in-home consultation for a unit and professional installation.
A tankless water heater usually goes cold mid-shower because the water flow drops below the heater's minimum activation threshold, or the system is overloaded by using too many fixtures at once. It can also happen if sediment blocks the filter or the unit is improperly sized.
Tankless water heaters come with a limited flow rate, meaning they might struggle to provide hot water simultaneously to multiple appliances or fixtures. If your household comprises several individuals taking showers or running appliances concurrently, you may need to invest in a larger unit.
The answer is no — tankless water heaters can save money on your monthly electric bill because they're 8%-34% more efficient than storage water heaters.
This problem usually comes down to capacity, heat production, or mixing issues inside your plumbing system. Sometimes the fix is simple, like adjusting your water heater temperature or flushing out sediment. Other times you may need a new mixing valve, an element replacement, or a different size water heater.
Installing a tankless water heater through Home Depot typically costs between $𝟐,𝟒𝟎𝟎 and $𝟓,𝟒𝟎𝟎 in total, including both the new unit and professional labor.
For the 2025–2028 tax years, individuals age 65 or older by the end of the tax year can claim an additional $6,000 deduction ($12,000 for married couples) under the "One, Big, Beautiful Bill". This deduction requires a Modified Adjusted Gross Income (MAGI) below $75,000 for individuals ($150,000 joint) and is available regardless of whether you itemize or take the standard deduction.
The most overlooked tax break depends on your situation, but the Saver’s Credit (Retirement Savings Contributions Credit) and out-of-pocket charitable/medical expenses consistently top the list. These breaks reduce your tax bill dollar-for-dollar without requiring you to itemize.
Cons: Minimal energy savings compared to well-insulated tank heaters, high energy demand (12 kW to 30 kW), potential need for electrical system upgrades, and higher operating costs for electric models.