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Patrick Riley
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How Much Does it Cost to Install a Tank Water Heater in Phoenix?

April 03, 2018

Are you looking to install a water heater, but worried about how much it will cost? Well, the cost to install a tank water heater in Phoenix ranges from $900 to $1,500+.

The cost varies depending on the following 4 factors:

  1. Size of the water heater
  2. Type of water heater (gas vs electric)
  3. Water heater efficiency
  4. Installation factors

Let’s go into each of these cost factors in more detail...

Cost factor #1: Size of the water heater

Water heater size or capacity refers to how many gallons of water a tank can hold when it’s full.

The more gallons of water your heater can hold (and heat), the bigger it is. And the bigger the water heater the more expensive it will be.

But here’s the thing: you don’t get to choose the size you want. Instead, you have to find the size that accurately matches your hot water needs.

Here’s why:

  • If you get a tank that’s too small for your home, you’ll run out of hot water quickly
  • If you get a tank that’s too big, you’ll waste money paying for hot water that you’ll never use

So instead of just guessing and choosing a water heater because it’s cheaper or bigger, you’ll want to find one that fits your needs.

You can determine what size water heater you need in 2 ways:

1. Match your household size to gallons (a good estimate)

This method provides a good estimate as to what size water heater you’ll need.

Use the chart below to match your household size with a water heater size:

water heater size chart by number of people in home

Water heater sizes per household

2. Calculate your peak hour demand (more accurate)

For more accuracy, you’ll want to calculate your home’s peak hour demand to determine what size water heater you need for your home.

Peak hour demand refers to how many gallons of hot water your household will need in the busiest hour of the day.

And don’t worry—it’s easy to calculate. Just follow the 2 steps below:

  • Step #1: Use the worksheet below from to estimate how many gallons of hot water your home uses during the busiest hour of the day (peak hour demand):
Image source:

Image source:

  • Step #2: Once you calculate your peak hour demand, make sure the water heater you choose has a first hour rating (FHR) that falls within 1-3 gallons of that number. Example: If you determine that you need 42 gallons of hot water during your peak hour demand, you’ll want to make sure that your water heater has an FHR between 39-45.

    FHR tells you the maximum gallons of hot water a tank can produce at any given hour. Sometimes called “1st-hour rating,” you’ll find FHR on the EnergyGuide label of a water heater.

Cost factor #2: Type of water heater (gas vs electric)

The 2 most common types of water heaters are gas-fired water heaters and electric water heaters.

Gas water heaters are generally more expensive to install, but they’re also cheaper to operate than electric water heaters. (that’s because gas is typically a cheaper fuel source than electricity).

We’ve created a side-by-side chart to help you choose between the 2 types of water heaters:

gas vs electric water heaters comparison

Gas vs. electric water heaters

Cost factor #3: Water heater efficiency

Basically, the more energy efficient the water heater, the more expensive it will be.

Water heater efficiency is measured by its Energy Factor (EF). The higher the EF, the more efficient the water heater.

  • The EF for most gas tank water heaters ranges from 0.58 to 0.60
  • The EF for most electric tank water heaters is 0.90 or higher

Water heater EF scoring takes into account several factors like…

  • How efficiently heat is transferred to the water in the tank
  • How much heat is lost from stored water (manufacturers refer to this as “standby heat loss”)
  • How much heat gets lost as water circulates through the tank and pipes

To find the EF for a particular water heater look on the water heater’s manufacturer label or, if you’re searching online, look in the product details (seen in the image below).

Screenshot taken from Google Shopping

Our recommendation is to find a water heater with an EF of 0.60 or higher for a gas water heater, and an EF of 0.90 or higher for an electric water heater.

Note: Even though electric water heaters generally have higher EF ratings, that doesn’t guarantee lower operating costs because electricity is still more expensive than gas.

Cost factor #4: Installation factors

When it comes to water heater installations, the bulk of your overall install price will go toward labor fees.

And how much you’ll pay for labor really depends on 2 factors:

  1. The difficulty of the installation
  2. The contractor you hire to do the install

Let’s look at these 2 installation factors in more detail...

#1: The difficulty of the installation

The bottom line is, the more time and work it takes to install a water heater, the more expensive the total cost will be.

Some examples of “difficult” water heater installations include:

  • The home’s plumbing isn’t up to code and needs to be upgraded
  • A pipe or gas line needs to be installed
  • The water heater is in a hard-to-access spot
  • The space where the new water heater will be located needs to be modified

#2: The contractor you hire

The better the contractor, the more they’ll likely charge for their services.

But don’t let that scare you from hiring a higher-priced contractor because you get what you pay for. Quality installations often come with higher price tags—which means if you’re willing to spend a bit more on labor fees, you’ll avoid wasting money on problems caused by an incorrectly installed water heater.

We’ll share a few tips when choosing a plumbing contractor. Make sure the contractor...

  • Is licensed (so that you know they’re following the proper codes)
  • Is insured (in case something goes wrong the job)
  • Has good online reviews (on sites like Better Business BureauGoogleYelp)
  • Offers a written contract (so you can hold them to their word)

Live in Phoenix? Need a new water heater?

We can help. Just give us a call and we’ll send over one of our trusted plumbers to give you an honest estimate to install a new tank water heater.

Want to learn more about our plumbing services? Visit our plumbing installation page to learn more about what we offer and what you can expect when you hire us.

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