Install Tankless Water Heater

If it’s time to upgrade your water heater, consider a highly efficient electric heat pump water heater.  This is the best option for both low cost energy and lowering your impact.  However, if that’s not an option, another option is an efficient tankless water heater.

Households: 1 completed, 1 committed
Points ?
Annual Savings
$1,500 - $3,000
Upfront Cost
These are estimates

Energy and water savings

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kWh Electricity
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Therms Natural Gas
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Gallons Gas
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Gallons Water
  • Save money and energy
  • Increase the comfort of your home
  • Reduce carbon emissions and air pollution

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The Action
We will upgrade to a natural gas tankless water heater.
Is this action for me?
If you own your home, this action is for you.
When and Who?
This should be done when your current water heater is in need of replacement. However, water heaters can go out quickly, so it is best to do your research ahead of time and be ready to go. The work is best done by a professional.
How long will it take?
Medium - time to learn about your options, get quotes and manage contractor.
What is the cost?
Around $1,500 - $3,000 or more depending on the model and upgrade requirements.


  • Save money and energy

  • Increase the comfort of your home

  • Reduce carbon emissions and air pollution



Energy Upgrade California® Rebate for Energy Efficiency Home Improvements

Energy Upgrade California® Rebate for Energy Efficiency Home Improvements


Loans for weatherization, energy-efficiency, & energy system upgrades.

Find the best financing options for your energy efficiency project with Go Green Financing.

Find loan options for home energy & water upgrades through Property Assessed Clean Energy (PACE) Financing

The Basics

If it’s time to replace your water heater, the best option is to switch to an electric heat pump water heater since it is even more efficient and can significantly lower carbon emissions. However, another option is to consider a tankless water heater.


Get ready before your water heater stops working
Why consider an electric heat pump system
Learn about tankless water heaters
Choose a system and a contractor
Install your new system
Maintain your system

When to upgrade?

The best time to upgrade your water heater is when it stops working.  However, this can happen fast, so it is best to do a bit of research ahead of time and make decisions about what type of system to choose and complete any required retrofits or upgrades before your water heater fails.

Why consider an Electric Heat Pump system?

If you need to replace your water heater soon, consider switching to an electric Heat Pump water heater.  Why switch?  First, a heat pump water heater will save money.  They are so efficient that they are actually less to operate even than conventional tank or tankless gas water heaters.  The climate impact is also significant.  When you install an Electric Heat Pump system you are converting from gas, propane or oil, which are fossil fuels, to electricity, which we can transitioned to clean, renewable sources.  

If your electricity provider uses a lot of coal to generate your electricity currently, your climate savings from switching will not be significant initially.  However, since renewable electricity sources like solar and wind have become so cheap, along with national and state policies to transition to renewable energy sources, coal and other fossil fuel sources of electricity will be phased out over time.  

If you install a heat pump system now, that lasts 10-15 years, you will be setting your home up to significantly lower your impact on climate.  Better yet, install a heat pump water heater and opt into a green electricity program and be 100% carbon emission free with your home water heating right away!  Also, since the system has a tank, heat pump water heaters can be an important part of participating in a demand response program and helping to balance community energy needs.

About tankless systems

Tankless water heaters are small units that provide hot water only when it’s needed, as opposed to keeping a whole tank heated all the time.  They can save up to 30% over conventional tank heaters.  They use a high heat source to heat water as it comes through the water heater.  In general, most tankless units are gas, as they do not function as well or as cost effectively with electricity.  Before you chose, find a professional to help you figure out which options are best for your home.   Here are some pros and cons of tankless water heaters:

Pros:  They save money over a conventional tank water heater -- up to $250/year over an electric and up to $100/year over a gas unit.  They are smaller than a conventional tank, and last a bit longer: 20 years, as opposed to 10-15 years for tank heaters.

Cons:  The initial cost is more -- around $1,500 - $3,000 for a tankless water heater installation vs around $800 - $1,200 for a conventional tank installation.  Hot water can be inconsistent and they can’t handle high demand (running multiple hot water uses at once).  They take longer to install than conventional tank units (8-10 hours vs. 2-3 hours).  They may require more maintenance and in some areas there are fewer professionals who work on tankless systems.  

Choose a new water heater, install and save!

Before you buy a new tankless water heater, learn a bit more about water heaters, how they work and the important factors in choosing a system with the and Consumer Reports guides.  A few things to look for in a new unit - first, make sure it is Energy Star rated.  Second, make sure to figure out the best capacity and find out about any upgrades you will need to do for installation.  The cost of install will depend on the specific upgrades your home will require.  

Choose an experienced contractor to do the work, and check references and quotes before you choose.  Finally, once you have installed your new system, maintain it for maximum efficiency, energy savings and comfort!