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How Much Does it Cost to Install a Water Heater in Michigan?

Typically, tank water heaters range from $1,500–$4,000, with the average cost to install a tank water heater being $3,000.

There are a variety of factors that will affect the cost of your water heater installation, but few of the largest factors include:

  • Fuel type
  • Size of water heater
  • Labor costs

Below, we’ll look into each of these factors in more detail to give you a better idea of how much your tank water heater will cost to install.

Want a professional’s opinion? We’d be happy to assess your home and provide an estimate on the cost to install a tank water heater in your Michigan home.

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Cost Factor #1: Fuel type

Gas water heaters are typically more expensive to install but are cheaper to operate on a month-to-month basis. This is because gas is usually a cheaper fuel type compared to electricity.

However, the type of fuel you choose for your water heater will greatly depend on the type of fuel you already have. If you currently have a gas water heater, we would recommend installing a gas water heater. If you currently have an electric water heater, we would recommend installing an electric water heater.


If you have an electric water heater, the cost to install gas lines and the venting required for a gas water heater is fairly expensive. If you have a gas water heater, you’ll need to install the electrical infrastructure to support it, which can also be expensive.

Typically, it’s less expensive for homeowners to install the type of water heater they had previously.

Cost Factor #2: Size

This probably comes as no surprise, but the larger your tank water heater is (in the number of gallons of water it can hold), the more expensive it will be. Typically, residential tank water heaters range in size from 30-80 gallons.

To determine what size tank water heater you’ll need for your home, a plumber will calculate your household’s peak demand. Peak demand refers to the number of gallons your household uses at once during the busiest (hot water) part of your day.

For example, if you come home from work, start the washer, start the dishwasher and go take a shower, this would probably be your home’s peak demand hour.

To give you a rough estimate of your home’s peak demand, you can use this chart from

Home Peak Demand Chart

As we mentioned above, if you use the shower (10 gallons), the dishwasher (6 gallons) and the washer (7 gallons) at one time, your peak demand is around 23 gallons.

Now, to find the right size tank water heater based on your peak demand, you need to look for a water heater that has a first hour rating (FHR) within 1–3 gallons of that number. FHR refers to the maximum amount of hot water a tank water heater can produce per hour.

So, if you are going to use 23 gallons of water during your peak hour demand, you need a water heater with an FHR between 20–26.

Again, if you’re shopping for a hot water heater, a plumber should be able to help you determine what size heater is best for your home. However, it doesn’t hurt for you to have a solid estimate of the size of water heater you need.

Cost Factor #3: Efficiency

The more energy-efficient your water heater is, the more expensive it will be to install (but the more long-term savings you’ll likely see).

Water heater efficiency is measured by something called “Energy Factor” (EF).

Typically, gas water heaters range from 0.58–0.80 EF and electric water heaters are 0.90 EF or higher.

If you want to reduce the cost of your month-to-month heating bills, you should invest in a gas water heater with an EF of 0.60 or higher or an electric water heater with an EF of 0.90 or higher.

Cost Factor #4: Labor

There are two labor costs that will impact your overall installation price:

  • The quality of the company/plumber you hire
  • The difficulty of the installation

Labor factor #1: The plumber you hire

There’s no way around it: you get what you pay for...and we hope you pay for an experienced plumber. Usually, paying a little more for a plumber who knows what they’re doing will save you money in the long run. When looking for a quality plumber, we suggest you look for a plumber who:

Labor factor #2: The difficulty of the installation

The other labor factor that will impact the cost of your installation is how much time a plumber will need to spend.

If there are issues or the installation takes a while, it will likely increase the overall cost. For example, your water heater installation may cost more if:

  • Your plumbing isn’t up to code
  • Your water heater is too big for the space it’s being installed in
  • You need to install gas lines or piping
  • Your electrical wiring needs to be updated to support your water heater
  • Your water heater is being installed in a space that’s difficult to reach

Ready to install a tank water heater? Call Michigan’s best: Thronton & Grooms

Whether you’re ready to install your new tank water heater or you still have questions, we’re happy to help! Our experts can help you choose a water heater that’s the right size and efficiency-level to properly meet your household’s water demand.

Schedule no-obligation estimate