Tankless water heater installations cost an average of $1,200 as of 2015, though this varies somewhat according to geographic area. Frequently, the necessary electrical outlets, ventilation system and upgrades to gas pipes require modifications in the home. Storage-tank hot water heaters, in comparison, average $300 in installation costs.
In addition to a somewhat costly installation, tankless units can also cost more to maintain than traditional water heaters. Long-term testing by Consumer Reports indicated tankless designs present a danger of scale buildup, which cost their testers about $300 for special valves and to have a plumber clean the system out with vinegar.