Buying a new water heater is necessary if your old one is wearing out or you want to upgrade to a more efficient one. However, it can be challenging to estimate the total cost of replacing a water heater — so many different types of equipment are available.

Use this guide to estimate how much repairing or replacing your water heater may cost. When you purchase a new water heater, you’ll need to cover the cost of equipment, installation and additional fees. Learn more about how much it costs to replace a water heater.

Water Heater Repair Cost

In some cases, it may be more cost-effective to repair your water heater rather than replace it. To determine which might be better for you, consider:

  • Your water heater’s age
  • What component needs to be replaced
  • Difference in cost between repair and replacement

If it will cost almost the same to repair your water heater as to replace it, you’re better off choosing a replacement. A newer water heater will last longer, giving you a higher return on your investment of finances, time and effort.

The average water heater repair cost in the Bay Area was $500-$1,000 in 2023. Traditional and tankless water heaters typically last eight to 10 years, depending on how often they’re used. If your water heater shows signs of aging, replacing it may be the most cost-effective option.

Traditional Water Heater Cost

The cost of replacing your water heater in California depends on several factors:

  • Your location and local regulations
  • The type of water heater you choose
  • The professional you hire for installation

The average for water heater replacements in California is $2,500. This includes water heater replacement labor costs, the price of new equipment, permit payments, and any inspection costs.


The total cost for a gas water heater replacement is usually between $2,000 and $3,500 in the Bay Area. Individuals who have to install a gas line to supply their water heater must also cover that cost. Many people love gas water heaters because they’re cheaper to purchase and reliable even when the electricity is down.


The cost for an electric water heater replacement runs between $2,000 and $3,000, depending on the specific model and size you choose. Although you may purchase an electric water heater for a low price, they’re typically more expensive to run than gas models. However, many people prefer electric water heaters because of their better environmental impact.

Cost by Tank Size

Whether you choose a traditional gas or electric water heater, the total cost for a traditional water heater will depend on the size of the storage tank. Larger tanks have a higher cost but are best for large households where multiple people may want hot water at once.

Cost by Tank Size

Here’s a quick cost estimate comparison so you can see how tank size impacts price:

  • 30-50 gallon tank: $2,000-$3,500
  • 75-gallon tank: $3,500-$4,500

If you’re supplying water for two people, a 40-gallon tank should be sufficient. Larger households typically need bigger tanks — 75-gallon tanks and up — to supply them with enough hot water.

To make the best decision for your family, consider how much hot water you use daily. How often are you running hot water in two places at once? You can talk with a plumbing technician for specific advice on the most cost-effective tank size for your needs.

Tankless Water Heater Cost

Another option to consider is a tankless water heater. This kind of heater doesn’t store hot water, so it’s more energy efficient. However, it can take longer for water to heat up, so you may have to wait for hot water.

In general, the cost of a tankless water heater replacement is between $7,000 and $11,000. Once you’ve purchased the water heater, you’ll also need to pay installation costs.


Replacing a gas tankless water heater can cost between $7,000 and $11,000. Gas models can heat more water faster than electric tankless water heaters, which means they may be a better fit for large households.


Due to electrical requirements, installing a whole-home electric tankless water heater is usually cost-prohibitive. If you’re interested in a tankless water heater, a tankless gas or heat pump water heater is a better option for the Bay Area in California.

Heat Pump Water Heater Cost

A third option to consider is a heat pump water heater. Heat pump water heaters use existing heat and transfer it from one place to another, rather than creating it from energy. This explains their high efficiency and energy savings compared to other models. Heat pumps work best when installed in open, well-ventilated areas.

This kind of water heater usually costs between $4,000 to $8,000, depending on the rebates in your area. Heat pump water heater installation costs mean your initial investment is even higher.

However, heat pump water heaters can save you hundreds of dollars during their lifetime. They last 10-15 years on average and are highly energy efficient. Because of their efficiency rating, you may be eligible for state rebates or federal tax incentives, helping to cover the cost.

Water Heater Cost Comparison

Here’s a quick comparison to help you make the best choice for your household, based on overall water heater costs in California.

Traditional water heaters are the least expensive but have the shortest life span:

  • Lifetime: Eight to 10 years
  • Initial cost: $2,000-$3,500 for gas, $2,000-$3,000 for electric
  • Long-term cost: Low for gas, high for electric

Tankless water heaters cost more but are typically more efficient than tank water heaters:

  • Lifetime: Eight to 10 years
  • Initial cost: $7,000-$11,000 for gas
  • Long-term cost: Low for gas, too high for electric

Heat pump water heaters are about in the middle for cost with have high-efficiency:

  • Lifetime: 10-15 years
  • Initial cost: $4,000-$8,000, depending on rebates/tax incentives
  • Long-term cost: Low for gas and geothermal, higher for electric

Ultimately, the most cost-effective water heater depends on size, fuel type and longevity. The best model for you will depend on your family, location and budget.

Schedule a Free Onsite Estimate With Barnett Plumbing & Water Heaters

If your water heater is giving you trouble, reach out to Barnett Plumbing & Water Heaters. Our technicians are trained to repair traditional, tankless and heat pump water heaters, and we know how to handle both gas and electric water heaters.

We proudly serve customers across the Tri-Valley area in California. When you book a free onsite estimate with us, we can help you decide between water heater replacement and repair. Contact us today or book online to learn more!

Schedule a Free Onsite Estimate With Barnett Plumbing & Water Heaters