How much does it cost to install a 40-gallon water heater?

Reviewed by Adam Graham remodeling expert. Written by Fixr.com.

Hot water heaters are an indispensable part of any home. They come in many types, methods, and sizes to accommodate any home, fuel type, or water needs. If your family has low-to-moderate water needs with 3 to 4 people, a 40-gallon tank heater is sufficient for your needs. Because tank-style heaters must keep water warm until it is used, you want to be as close to your family’s needs as possible to avoid spending too much on water heating costs. Water heater costs have increased over the last few years, and with HVAC regulations updating in 2023, costs are expected to increase more between January and April of 2023, with projected percentages rising 12%.

The national average cost range to install a 40-gallon tank water heater is $1,250 to $1,900, with most people paying $1,575 for a 40-gallon gas tank water heater that is a direct replacement for an existing model. This project’s low cost is $770 for a 40-gallon electric tank water heater installed in an open area. The high cost is $4,500 for a 40-gallon solar water heater with a gas backup system on the rooftop and outdoors.

40-Gallon Water Heater Cost Calculator

40-gallon water heaters can meet the hot water needs of households with 3 to 4 members and low-to-moderate needs. This water heater size can be electric, powered by gas/propane, or solar with a backup system of electric or gas/propane. Solar water heaters have the highest costs for purchase and installation but the highest efficiency ratings. Gas and propane heaters have moderate-to-high upfront costs with a range of efficiency, while electric units are generally the least expensive to purchase but cost the most to run. These factors, along with the location, whether it is ready for installation, and tank insulation, impact the final project cost. The costs below are for differing qualities of 40-gallon tank water heaters fully installed.

Electric water heaters are the least expensive to purchase and install, but they are usually more costly to run long-term. Newer electric hybrid water heaters are more costly upfront but efficient to run with some of the lowest costs. Gas or propane water heaters are more costly to purchase, set up, and install but have lower operating costs than traditional electric water heaters. Gas and propane heaters also come in varying efficiencies, meaning they can save more long-term. Solar water heaters with electric or gas backup are the most costly to purchase and install but have the lowest monthly costs. The cost to replace a 40-gallon electric water heater in an easily-accessible area is the least costly. The average cost to replace a 40-gallon gas water heater or new hybrid electric heaters in direct-replacement situations are the most moderate. High-efficiency models, installed in areas that need modifications to help them fit, and solar heaters cost the most.

Enhancement and Improvement Costs

Energy-Efficient 40-Gallon Water Heater

High-efficiency 40-gallon water heaters can be found with an Energy Star label. To be considered high efficiency or receive an Energy Star rating, an electric water heater needs a uniform energy factor (UEF) of more than 2.2, while a gas-fired unit needs a minimum UEF of 0.64 until April 2023, at which time this increases to a minimum of 0.86. Solar water heaters with electric backup have a minimum high-efficiency rating of 3, while solar water heaters with gas backup have a minimum high-efficiency rating of 1.8. These units have the highest costs, so expect high-efficiency units to range from $850 to $2,500.

Additional Considerations and Costs

• Top manufacturers. There are many manufacturers of water heaters. Popular brands include Bosch, Reliant, Rheem, and Bradford White.
• Maintenance. Water heater maintenance includes draining the tank periodically to clean out sediment that may have built up on the bottom, and inspections ensure it continues to work.
• Mounting. 40-gallon water tanks are large enough to be primarily floor-mounted. It is rare to find one that can be wall-mounted at this size.
• Piping. If you need additional plumbing to connect the unit to the water supply, expect additional costs of $12 to $15 per linear foot.
• Permit. You do not need a permit for a water heater in most areas, but this depends on your location. Always check with your municipality to find out if a permit is required.
• Expansion tank. Some water heaters may need an external expansion tank. This allows the water to expand as it heats. If your unit does not have one, installing one costs $100 to $350, making the cost to replace a 40-gallon heater and add an expansion tank between $1,350 and $2,250.
• DIY. DIY water tank installation is not recommended. In most cases, installation requires directly wiring it to your home’s electrical system or hooking it to your main gas line. These jobs are best left to the professionals.
• Venting. Electric water heaters do not need to vent. However, some gas or propane units need to vent if you do not have enough air circulating in the area they are installed in. Adding a direct-vent unit can increase costs by $400 to $1,000.
• Warranty. Most water heaters have a warranty of between 5 and 10 years, but these can sometimes be extended. Speak to your installer about which warranties may be available.
• Inspections. If you think your unit may need to be replaced or has an issue, your installer can usually perform an inspection. This may be free for replacements or cost $100 to $200. Speak to your installer for more information.