The big decision: tank Vs. tankless gas water heater
Tankless gas water heaters offer the following advantages over traditional tank-style water heaters:
-Ability to provide endless hot water on demand
-Higher energy efficiency
-Lower operating costs
-Space savings
Note: Typically (but not always), condensing tankless gas water heaters have two heat exchangers, and non-condensing models only have one.
The extra heat exchanger in condensing tankless gas water heaters uses heat from the exhaust gas to preheat the inflowing cold water. This means condensing tankless gas water heaters are more energy efficient, and have cooler exhaust gas to vent.
Source: Navien –
Also, Condensing tankless gas water heaters require proper disposition of acidic condensate.
tankless gas water heater cost at retail - the big picture
Non Condensing Tankless Gas Indoor or Outdoor
Natural gas or Propane gas: 120,000 to 199,000 BTUs ~$600 to $1,200 (before any available local Utility market incentives).
Natural gas Operating cost ~$240/year
Propane gas Operating cost ~$500/year
Condensing Tankless Gas Indoor or Outdoor
Natural gas or Propane gas: 130,000 to 199,000 BTUs ~$1,150 to $2,750.
Local Utility rebates on ENERGY STAR® certified models up to $1,500
Operating cost ~$220/year
Propane gas Operating cost ~$450/year
Note: Sizing of tankless gas water heaters….scroll to a video explanation at the bottom of this page under “Resources”
Product Comparison Table. 199,000 BTUs condensing tankless Gas water heaters with recirculation pump sold at The Home Depot and Lowe's
-*Retail prices may vary. Prices observed on 1/29/2026 (Fort Myers, FL)
Note: These models are Ultra Low Nox and can be installed in the entire US (including California, Utah and Colorado).
For reference:
-A water heater’s energy efficiency is determined by the uniform energy factor (UEF), which is based on how much energy the water heater uses and how much energy is used to power the water heater itself. The higher the uniform energy factor, the more efficient the water heater.
Source: DOE – Energy.gov
Product Comparison Table. 199,000 BTUs condensing tankless Gas water heaters (recirculation capable but pump not included) sold at The Home Depot and Lowe's
-*Retail prices may vary. Prices observed on 1/29/2026 (Fort Myers, FL)
Note: These models are Ultra Low Nox and can be installed in the entire US ((including California, Utah and Colorado).
For reference:
-A water heater’s energy efficiency is determined by the uniform energy factor (UEF), which is based on how much energy the water heater uses and how much energy is used to power the water heater itself. The higher the uniform energy factor, the more efficient the water heater.
Source: DOE – Energy.gov
Note: Sizing of tankless gas water heaters….scroll to a video explanation at the bottom of this page under “Resources”
Gas water heaters must be installed by a licensed plumbing professional. We recommend that you request minimum 3 plumber quotes for the cost of the installation.
Resources:
Click for Noritz Contractor finder
Click for A. O. Smith Contractor finder
LocalPlumbingQuotes by ImproveNet® powered by Angi®
Natural or Propane gas tank or tankless water heater cost including Professional installation - The big picture
Standard Gas Water Heater
~$2,000 to $3,000 product + installation by licensed plumber
Local Utility rebates on ENERGY STAR® certified models up to $700
Natural gas operating cost ~$300/year
Propane gas operating cost ~$500/year
Tankless Gas Water Heater
~$4,000 to $7,000 product + installation by licensed plumber
Local Utility rebates on ENERGY STAR® certified models up to $1,500
Natural gas operating cost ~$240/year
Propane gas operating cost ~$500/year
Gas tank water heater cost at retail - The big picture
What size of gas tank do I need?
Family of 1 to 2: 30 gallons
Family of 2 to 4: 40 gallons
Family of 5 or More: 50 gallons
Source: https://www.lowes.com/n/buying-guide/water-heater-buying-guide
Standard Atmospheric Vent
Most common. Exhaust gasses vented vertically to exit the home.
Natural gas: ~$500 to $1,300.
Propane gas: ~$700 to $1,300.
Natural gas Operating cost ~$300/year
Propane gas Operating cost ~$500/year
Power Vent
An electric blower pushes the exhaust gasses vertically or horizontally. Lower exhaust temperatures allow for PVC piping.
~$1,100 to $1,500.
Natural Gas Operating cost ~$300/year
Propane Gas Operating cost ~$600/year
Direct Vent
Draws air for combustion outside the home rather than inside. Exhaust gasses vented back outdoors.
~$900 to $1,200.
Natural Gas Operating cost ~$250/year
Power Direct Vent
An electric blower draws air for combustion outside the home rather than inside. Exhaust gasses vented back outdoors. PVC piping allowed.
~$1,100 to $1,600.
Natural Gas Operating cost ~$250/year
Source – A. O. Smith: https://www.hotwater.com/info-center/water-heater-venting.html