How much does it cost to install an indirect water heater?

National Average Range:
$1,800 - $3,000

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Updated: July 18, 2022

Reviewed by Adam Graham remodeling expert. Written by

To provide you with the most accurate and up-to-date cost figures, we gather information from a variety of pricing databases, licensed contractors, and industry experts.

Storage tank water heaters have some of the highest energy usage of any appliance. This means switching to a more efficient water heating system is one of the most effective things you can do to save money.

If you have a boiler as the main heating system in your home, installing an indirect water heater can make your water heating much more efficient. Instead of directly heating the water, the indirect system uses the heat from your boiler to heat the water.

The national average cost to install an indirect water heater is $1,800 to $3,000, with most people paying around $2,200 for a 75-gallon heavily lined indirect water heater that can supply 3 to 4 appliances at one time. This project’s low cost is $1,200 for a 30-gallon lightly lined indirect water heater that can supply 1 to 2 appliances. The high cost is $6,000 for a 100-gallon heavily lined indirect water heater with a dual heat source for solar water heating.

What Is an Indirect Hot Water Heater?

Indirect water heaters are storage tanks for hot water with a heat transfer coil. Instead of heating the water, the heat transfer coil takes hot water from another energy source - usually a boiler - and circulates it to warm the water in the tank. If you already have a boiler heating water for radiant heat or radiators, it takes no additional energy to heat the water in the tank. You can also configure your indirect water heater to use solar energy during the summer months to heat the water when your boiler is not running.

Because you are not heating water constantly and the tank is lined to hold heat, this is the most efficient way of producing hot water.

Indirect Water Heater Cost Calculator

Like many water heaters, indirect heaters are priced in several ways. The first is by size. Smaller heaters hold less water but are less expensive. Large heaters can hold enough water for multiple users or fill a large bathtub with hot water, but they cost considerably more.
How the tank is lined also impacts costs. Heavily lined tanks hold hot water for longer, while tanks that are not as heavily lined need the boiler to fire regularly. Heavily lined tanks cost more upfront but save long-term.

Below are the average costs for tanks of varying sizes and quality installed in a 2,000 sq.ft. home.

Like all water heaters, indirect units are mostly sold by how many people are using them or how many hot water appliances you use at once. The more people you have in your household, the bigger the tank you need. The larger tanks have the heaviest insulation to ensure they hold heat because larger tanks require more energy to warm the water inside.

Indirect water heaters may be insulated or lined on the interior, exterior, or both. The more insulation a tank has, the higher its costs, but the lower the energy required to provide hot water.

Indirect Water Heater Maintenance

Indirect water heaters need the least amount of service or repair of any water heater. This is because they have no heating element and no moving parts to fail. They should be periodically drained and cleaned to prevent sediment buildup. You should also ensure you maintain your boiler or heat source regularly. Because your indirect water heater depends on the boiler, the boiler must be in good shape year-round to ensure you have a sufficient hot water supply.

Pros and Cons of an Indirect Water Heater

Indirect water heaters are one of the most efficient types of water heaters. They do not contribute to energy bills because they do not generate their own energy to heat the water. They are most commonly used with boilers, but a few systems could be configured to work with other heat sources, including solar heat.

They are more expensive than most boilers to purchase and install. While they have almost no additional energy costs during the winter months, your boiler must fire up to heat the water during the summer. Some solve this issue with a solar heat source and install a dual-source indirect heater, but these are extremely expensive to purchase and install.

Finally, you have no heat or hot water if your boiler stops working.

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Additional Considerations and Costs

  • Energy efficiency. Indirect water heaters are efficient because they do not use energy. Instead, they harvest heat from boilers. Therefore, the more efficient your boiler, the more efficient your system.
  • Old unit removal. If you replace your water heater, you must remove and dispose of the old unit. Some contractors do not charge for this, but others charge between $50 and $200.
  • Direct vs indirect water heaters. Direct water heaters use their own energy source to heat the water, while indirect water heaters take heat from a boiler or other source. This makes indirect heaters more efficient.
  • Boiler. Your indirect heater is only as efficient as your boiler. Upgrading your boiler to a more efficient one increases the system’s efficiency.
  • Space. Indirect water heaters must sit near your boiler. The farther they are from the boiler, the more energy they lose. You need to have enough space near the boiler for installation.


  • How efficient are indirect water heaters?

Indirect water heaters do not produce heat, so from that perspective, they are 100% energy efficient. However, they take heat from your boiler, so the more efficient your boiler, the more efficient the entire system.

  • ​​How long does an indirect water heater last?

Indirect water heaters last between 10 and 12 years.

  • Do indirect water heaters need to be flushed?

Yes, but they need less frequent flushing than storage-tank systems. They also operate differently, so some styles can be difficult to flush, while others drain at the bottom like other water heaters.

  • What are the advantages of an indirect hot water system?

The biggest advantage is not paying for the energy to heat your hot water. Indirect systems take heat from another source and use it to heat the water. This considerably lowers the cost of your hot water.