Tankless water heater on new construction

7 years ago

Hello,

We are building a new home and our builder is charging us 3500$ to upgrade to a tankless gas water heater. They offer two 40 gallons gas water heaters at base price with out any additional cost.

I am trying to understand if it really takes 3500$ for such upgrade. From what I’m reading online it costs less than 1000$ to do it.

Has anyone recently upgraded to tankless and how much did that cost?

Thanks.

Featured Answer

Jake The Wonderdog

7 years ago

With new construction the difference should be minimal. The reason is that the higher cost of the unit itself is generally off-set by the lower cost of venting it. There is also a marginal cost for increased gas pipe size as well as an electrical outlet. I would estimate that about $500-$1,000 is reasonable for a single tankless upgrade on new construction. In your case, it sounds like they would be installing 1 tankless to replace 2 tank heaters... $500 -$1000 is probably about right.

When you are talking about a retrofit, it can be a different story.

That said, when a tankless is being considered, it shouldn't assumed to be a direct substitution. Tankless works best when the plumbing system is designed for it. Tanklesss can often allow for placing the heater closer to the point of use. Manifold distribution instead of branch distribution can keep the runs short and the pipe size small to reduce wait time. Insulating water lines also keeps wait time low by reducing heat loss between uses.

Tankless heaters are still being sold as a "luxury" item... and thus the big markup. It's stupid. On new construction in particular, the high upgrade cost doesn't make sense if you looking at the actual increase in cost of materials and labor to the contractor.

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Comments (7)

Oliviag
7 years ago
our tankless water heater cost probably half again, not quite twice a tank. . but, we also changed plumbing runs, installed a manifold, to keep runs short.
to me, this estimate is really excessive.
Vignesh Kumar thanked Oliviag
Oliviag
7 years ago
floorplan?
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millworkman
7 years ago
Is this a tract or developers type home where you purchase the property and the home after completion from a few select models? If so the business model is that this is a change order and they mark them up considerably. That being said if this is that type of home purchase/build this would all be spelled out in your contract.
Vignesh Kumar thanked millworkman
Jake The Wonderdog
7 years ago
last modified: 7 years ago
millworkman,

That's a good point to make - similar to the "this is a luxury so it will cost more" argument. However, the question the OP was asking was what's the net increase in costs to the builder - meaning what's reasonable when trying to negotiate this down.

Even if it's a change order, or a "luxury" or it's in the contract that any deviation, including options, are considered change orders - it's still reasonable to try to negotiate the cost of some of that down.

I feel pretty confident that the net increase in cost for the builder is $500-1000

In this case the difference in the cost of two standard water heaters vs 1 tankless so probably closer to $500.

Add:

1 - 200k btu tankless $1,300

1 electrical outlet (___)

1 service valves for tanklesss $100

1 flue using PVC pipe - possible sidewall venting instead of roof venting (____)

1 labor to install 1 tankless (____)

1" gas line from meter (good guesstimate). Marginally more than the 3/4" line.

Delete:

2 water heaters @ $400 each for the heater itself $800

-shutoffs, etc for 2 heaters $50

- labor to install 2 heaters (about 2x the labor to install 1 tankless)

-Venting for standard water heater (must be metal and go through the roof) Probably needs to be double wall. Easily 2-4x the cost of the tankless PVC vent.

-3/4" gas line from meter (good guesstimate)
Vignesh Kumar thanked Jake The Wonderdog
millworkman
7 years ago
Oh I get that jake, but if the op signed a contract for a tract type home the horse is out of the barn on negotiating.
Vignesh Kumar
Original Author
7 years ago
Thanks everyone for the inputs. @Jake that was super thorough and very helpful.