How to install a tankless water heater starts with understanding that this is a complex project involving gas or high-voltage electrical connections, venting, and water supply lines. While a skilled DIYer can complete the job, many homeowners choose to hire a licensed plumber to ensure safety and code compliance. This guide walks through the entire process, from planning to final testing, so you know exactly what to expect.
Why Choose a Tankless Water Heater?
Tankless water heaters, also known as on-demand water heaters, heat water directly without storing it in a tank. According to the U.S. Department of Energy, they can be 24%–34% more energy-efficient than conventional storage tank heaters for homes that use 41 gallons or less of hot water daily. They also provide an endless supply of hot water and save floor space.
Benefits of Going Tankless
- Energy savings: No standby heat loss means lower utility bills.
- Longer lifespan: Typically 20+ years compared to 10–15 for tank models.
- Compact size: Mount on a wall, freeing up closet space.
- Endless hot water: Never run out during long showers or while running multiple appliances.
Tools and Materials You'll Need
Before starting, gather the following:
- Tankless water heater unit (gas or electric)
- Adjustable wrenches, pipe wrenches
- Pipe cutter or tubing cutter
- Propane torch or soldering kit (for copper)
- Drill with hole saw or spade bit
- Venting kit (for gas models) – must match manufacturer specs
- Gas shut-off valve and flexible gas line (if gas)
- Electrical disconnect box, wire, and breaker (if electric)
- Teflon tape or pipe joint compound
- Pressure relief valve and discharge tube
Step-by-Step Installation Process
Step 1: Turn Off Utilities and Drain the Old Heater
Shut off the gas or electricity to your existing water heater. Close the cold water supply valve. Attach a garden hose to the drain valve at the bottom of the tank and run it to a floor drain or outside. Open a hot water faucet in the house to allow air in, then open the drain valve to empty the tank.
Step 2: Remove the Old Unit
Disconnect the water lines and vent pipe (if gas). For gas, use a wrench to disconnect the gas line at the union. For electric, disconnect wiring at the junction box. Remove the old heater from the area. Be careful—it may still contain water and be heavy.
Step 3: Plan the New Installation Location
Tankless units can be installed on an interior or exterior wall. They require proper clearances for venting and service access. Check the manufacturer's manual for minimum distances from combustibles. Also consider the distance to the main gas line or electrical panel—longer runs mean higher cost.
Step 4: Install the Mounting Bracket
Hold the mounting bracket against the wall at the desired height (usually 5–6 feet from floor). Use a level to ensure it's straight. Mark the holes, drill pilot holes, and secure the bracket with appropriate anchors or lag bolts into studs.
Step 5: Connect the Water Lines
Install isolation valves on the cold water inlet and hot water outlet. Use a pipe cutter to make clean cuts. For copper pipes, solder or use push-to-connect fittings. For PEX, use crimp rings or push fittings. Always install a T&P (temperature and pressure) relief valve on the hot outlet, with a discharge tube pointing downward toward a drain.
Step 6: Connect the Gas Line (Gas Models)
If you're installing a gas unit, you'll need a gas line sized correctly for the heater's BTU input. This is a critical safety step—undersized lines can cause poor combustion. Use a flexible gas connector approved for tankless water heaters. Apply pipe thread sealant to the threads, tighten, and test all joints with soapy water to check for leaks. Note: In many areas, a licensed plumber or gas fitter must make the gas connection.
Step 7: Install Venting (Gas Models)
Venting must comply with the manufacturer's instructions and local codes. Most modern tankless heaters use a concentric vent (one pipe inside another) for intake and exhaust. Cut a hole in the wall or ceiling for the vent termination. Assemble the vent sections, ensuring a proper slope to drain condensate. Seal all joints with high-temperature silicone or the manufacturer's approved adhesive.
Step 8: Make Electrical Connections (Electric Models)
Electric tankless heaters require a dedicated circuit with the correct amperage (often 60–120 amps). This is a job for a licensed electrician unless you're very experienced. Run the proper gauge wire from the breaker panel to the unit's junction box. Connect the wires (black to black, white to white, green/bare to ground). Install a disconnect switch near the unit as required by code.
Step 9: Test the System
Open the cold water supply valve and let the unit fill. Check for leaks at all connections. If gas, turn on the gas and check for leaks. Plug in the unit or turn on the breaker. Set the temperature to your desired level (typically 120°F for safety, but consult the CDC's water heating guidelines). Turn on a hot water faucet and verify that the heater fires up and produces hot water.
Important Codes and Permits
Most jurisdictions require a permit for tankless water heater installation. The International Association of Plumbing and Mechanical Officials (IAPMO) publishes the Uniform Plumbing Code, which many U.S. states adopt. Key requirements include:
- Proper venting to the outside (gas models)
- Earthquake straps or seismic bracing
- Backflow prevention if required by local code
- Accessible shut-off valves
Cost Considerations
The cost to install a tankless water heater varies widely depending on the unit type, labor, and regional pricing. On average, homeowners spend between $1,500 and $3,500 for a professional installation, but prices vary by region. The unit itself can cost $500–$2,000. If you're replacing a tank with a tankless, additional costs may include upgrading gas lines or electrical panels.
| Component | Typical Cost Range (US) |
|---|---|
| Gas tankless unit | $800 – $1,800 |
| Electric tankless unit | $400 – $1,000 |
| Labor (professional install) | $500 – $1,500 |
| Venting kit | $100 – $300 |
| Gas line upgrade | $200 – $800 |
| Electrical upgrade | $300 – $1,200 |
These are typical ranges; actual costs depend on your location and specific project requirements.
DIY vs. Hiring a Professional
While installing a tankless water heater yourself can save money, it's not recommended unless you have experience with gas or electrical systems. Mistakes can lead to carbon monoxide leaks, water damage, or fire hazards. Additionally, manufacturers often require professional installation to keep the warranty valid. The EPA WaterSense program also encourages proper installation for water efficiency.
Maintenance Tips for Longevity
Once installed, regular maintenance keeps your tankless heater running efficiently. Flush the system annually to remove mineral buildup—especially if you have hard water. Replace the inlet water filter every 6 months. Check the venting system for blockages or corrosion.
If you encounter any issues, our water heater repair team can help. For related plumbing needs, consider our leak detection and pipe repair services. If you're also dealing with water quality, a water softener can extend your heater's life.
Frequently Asked Questions
Below are answers to common questions about tankless water heater installation.
Do I need a permit to install a tankless water heater?
Yes, most local building codes require a permit for new water heater installations, including tankless. Your local inspector will want to verify proper venting, gas connections, and safety devices. Check with your city or county building department before starting.
Can I install a tankless water heater myself?
Technically, yes, if you have the skills and tools. However, gas models involve combustion gases, and electric models require high-voltage wiring. A mistake can be dangerous. Many manufacturers require professional installation for warranty coverage. We recommend hiring a licensed plumber.
What size tankless water heater do I need?
Size depends on your home's peak hot water demand—how many fixtures you might use simultaneously. A typical 2-bathroom home needs a unit that can deliver 6–8 gallons per minute (GPM). Consult the manufacturer's sizing chart or have a professional calculate your needs.
How long does installation take?
A professional installation typically takes 4–8 hours for a straightforward replacement. If you need gas line or electrical upgrades, it may take a day or two. DIY installation might take longer, especially if you're learning.
What is the lifespan of a tankless water heater?
Most tankless units last 20 years or more, about twice as long as traditional tank heaters. Regular maintenance, such as flushing, can extend their life even further.
Are tankless water heaters worth the cost?
For many homeowners, yes. They save energy, reduce water waste, and provide endless hot water. However, if you have a tight budget or low hot water usage, the upfront cost may not be offset quickly. Use the Energy.gov savings calculator to estimate your payback.
Ready to Upgrade?
Installing a tankless water heater can be a smart investment, but it's not a simple weekend project for most people. To ensure safety, code compliance, and optimal performance, we recommend hiring a licensed plumber. At MyTownPlumber, our experienced team handles tankless water heater installations, replacements, and repairs. Contact us today for a free estimate and special offers. We're here to help you enjoy endless hot water with peace of mind.
By MyTownPlumber Editorial Team