The published prices
| Fuel | Unit | Labor | Total installed | Source |
|---|---|---|---|---|
| Electric | $500 to $1,500 | $150 to $1,000 | $650 to $2,500 | This Old House |
| Propane | $500 to $2,000 | $900 to $1,500 | $1,400 to $3,500 | This Old House |
| Natural gas | $750 to $2,000 | $900 to $1,500 | $1,650 to $3,500 | This Old House |
| Natural gas, installed | $1,600 to $4,000 | Fixr |
Electric is roughly $1,000 cheaper installed at both ends of the range. Most of that difference is labor, not the appliance: $150 to $1,000 against $900 to $1,500.
Running cost goes the other way
| Fuel | Per year | Source |
|---|---|---|
| Natural gas | $192 to $264 | This Old House |
| Natural gas | about $250 | Fixr |
| Propane | about $350 | Fixr |
| Electric | $300 to $540 | This Old House |
| Electric | about $600 | Fixr |
The two sources differ on electric by roughly a factor of two, and we report both. Fixr states the ratio: an electric tankless unit costs around three times as much as a gas one to run, at about $600 a year against about $250.
Our arithmetic, stated as such. Take the middle of both sets: gas costs roughly $1,000 more to install and saves roughly $200 to $350 a year. That is a three-to-five-year payback, on an appliance both sources expect to last 15 to 20 years. On cost alone, gas wins for a household that has a gas supply.
This Old House puts the same point from the other direction: switching from a gas to an electric tankless unit adds $25 to $45 a month in electricity costs.
The constraint that usually decides it
Price is rarely what settles this. Supply is.
Electric needs serious service. This Old House: most tankless water heater units require 120 to 160 amps of dedicated service and multiple 240-volt circuits. A typical US home has a 100 or 200 amp panel serving everything. Adding a whole-house electric tankless unit to a 100 amp panel is not a matter of running a cable.
| Electrical work | Cost | Source |
|---|---|---|
| New dedicated circuit | $200 to $600 | This Old House |
| Panel upgrade during installation | plus $200 to $800 | This Old House |
| Full electrical panel upgrade | $1,000 to $2,000 | This Old House |
A $1,000 to $2,000 panel upgrade wipes out the entire price advantage of going electric, and then some.
Gas needs a bigger pipe. This Old House: installing a gas tankless unit in an older home often means upgrading the gas line from half an inch to three quarters, at $400 to $800, and adding venting through walls or roofs at another $400 to $800. Elsewhere on the same page the gas line conversion is given as $350 to $750.
So both fuels carry an infrastructure cost that the headline install price does not include. Which one you face depends on your house. See tank to tankless conversion cost.
Flow rate: what each fuel can actually deliver
| Fuel | Flow rate | Suits | Source |
|---|---|---|---|
| Electric | 3 to 8 GPM | Warmer regions, smaller households | This Old House |
| Propane | 8 to 10 GPM | Multiple fixtures at once | This Old House |
| Natural gas | up to 11 GPM | Simultaneous showers, dishwasher, washing machine | This Old House |
This Old House notes gas models achieve the highest flow rates and provide "quick, steady heating, which can offer value in regions with cold incoming water". That last clause matters more than it looks. A tankless unit raises incoming water to the target temperature in one pass. Colder incoming water means a bigger temperature rise, which cuts the flow rate a given unit can sustain. An electric unit rated 8 GPM in Florida is not an 8 GPM unit in Minnesota.
Neither source states this consequence directly; it follows from the flow rate and temperature rise being linked, which This Old House describes. Treat it as our reading.
Where electric wins
No gas supply. The common case, and it ends the discussion. Running a new gas line is priced at $1,500 to $2,300 by This Old House for a tank conversion, on top of everything else.
A point-of-use unit rather than whole-house. This Old House prices a 1 to 2 GPM point-of-use electric unit at $150 to $500 for a single faucet or appliance. At that size the electrical demand is manageable and gas is not an option.
No venting. An electric tankless unit needs no flue, no vent pipe and no combustion air. That removes $400 to $800 of the gas job and every question about the chimney. See venting cost.
Simplicity and safety. Fixr notes electric units have no combustion, so no gas leak risk, no carbon monoxide and no venting to maintain.
What to get quoted
Ask for three things before comparing an electric and a gas quote: your current panel capacity in amps, your current gas line diameter, and the flow rate each unit delivers at your incoming water temperature rather than at a test condition. Without those three, the two quotes are not comparable, and the cheaper one on paper is often the more expensive one installed.
Related: tank to tankless conversion cost, tankless repair cost, what size do you need.
Sources
- This Old House, How Much Does Tankless Water Heater Installation Cost?, updated June 12, 2026
- Fixr, Tankless Water Heater Installation Cost, updated January 31, 2025
- Fixr, How Much Does a Gas Water Heater Cost in 2026?, updated January 30, 2026
Price figures are national US ranges from the sources above as of the date shown. Your local price depends on labor rates, permits and site conditions. Read how we get our numbers.