How Much Does It Cost to Replace a Water Heater?

The Average Cost to Replace a Water Heater

Replacing a water heater in Maryland can cost anywhere from $1,200 to $3,500 or more, depending on several factors:

1. Type of Water Heater: Tank storage heaters typically cost less than tankless models, but tankless systems are often more energy efficient.
2. Size of the Water Heater: A larger household will need a bigger unit, which can increase the cost.
3. Energy Source: Since gas and electricity rates can change, the cost to run a water heater that uses either kind of energy can change as well.
4. Installation Costs: Hiring a licensed contractor ensures proper installation, but different companies may quote you different prices.

What’s the Cost of Different Types of Water Heaters?

Here’s a breakdown of typical water heater costs to give you an idea of what to expect:

Standard Tank Water Heaters: $1,200 – $2,500
Tankless Water Heaters: $2,500 – $3,500
Heat Pump Water Heaters: $2,000 – $4,000

While replacing a water heater may seem expensive, a more efficient model can lower monthly bills. In some cases, you save more over the lifetime of the unit by spending more money on a better unit. Also, energy-efficient water heaters qualify for incentives. This can include rebates and federal tax credits that can lower your installation costs by thousands of dollars!

Why Upgrade Your Water Heater?

If you notice signs like inconsistent hot water, expensive energy bills, or frequent breakdowns, it’s time to think about a new water heater. A modern, energy-efficient unit offers:

• Reliable hot water for your household
• Lower monthly energy costs
• A reduced carbon footprint

Water heating is usually the second-largest energy expense in a home, using nearly 20% of the average home’s total energy! This means it’s easy to benefit by upgrading.

No-Cost Water Heater Replacement with CAC

Despite the potential savings, replacing a water heater can be expensive, making it unaffordable to many local families. But there is good news—CAC’s weatherization assistance program offers no-cost water heater upgrades and other weatherization upgrades to income-eligible Maryland residents.

Weatherization makes your home more comfortable, healthy, and affordable. This program is available to renters and homeowners throughout Maryland who meet income requirements (in 2025, a family of four with an annual income of $94,650 or less would qualify).

Weatherization services from CAC can also include:

1. 1. Insulation and air sealing upgrades
   2. Heating and cooling system upgrades
   3. LED lighting upgrades
   4. Smoke and carbon monoxide detector installation

How to Apply for Weatherization Assistance

Getting started is easy! Here’s what to do:

1. Fill Out the Online Intake Form: Complete this simple form.
2. Schedule an Energy Assessment: A trained auditor will visit your home to help identify the most impactful upgrades.
3. Receive Weatherization Services: CAC partners with trusted local contractors to complete the work at no cost to you.
4. Verifying Quality Work: After the upgrades are complete, an inspector will double-check that the job was done right.