July 14, 2022
By Mark Paup

Cost To Install a Tank Water Heater

Updated January 17, 2024

If you need to replace your tank water heater, you’re probably wondering how much it will cost you. On average, installing a tank water heater in Iowa costs anywhere from $2,400 to $3,000.

Without a plumber coming to your home for an in-home estimate, it’s impossible to say exactly what your installation will cost. However, we can help you get a better idea of where on the price spectrum your installation will fall by looking at four major factors that impact its cost.

Your potential installation cost for a tank water heater will depend on:
  • Your Household’s Hot Water Usage
  • Fuel Type
  • Efficiency Rating
  • Labor Costs

Below, we’ll look at each of these cost factors in detail to help you make the best investment possible for heating your home’s water.

Want an exact price estimate from a professional plumber?

Call Golden Rule at 515-393-4526 today or schedule below. We offer fast same-day service in the Des Moines Metro area and would be happy to assess your current water heater, hot water needs, and budget to provide you with our professional recommendations for a new tank water heater and an upfront estimate.

goldenrule water heater cost infographic

Your Household’s Hot Water Usage

The more gallons of hot water your household uses, the higher on the price spectrum your installation will be.

It’s important to properly calculate the tank water heater’s size. An undersized tank could mean that you constantly run out of hot water and pay higher utility bills. In contrast, an oversized tank could mean that you’re wasting money heating water that doesn’t get used.

To avoid wasting money or freezing showers, a professional plumber can find the tank size that best fits your household’s needs. They will determine it by calculating your household’s peak demand and then the first-hour rating.

Peak demand calculates the maximum amount of hot water (in gallons) your household might simultaneously need in an hour. Using peak demand is a more accurate gauge of needed tank water heater size than the number of people in your household. Some households may only have 3 people but use as much water as a 5-person household.

For example, if your household needs to run the dishwasher, start the laundry washing machine, and shower at the same time between 7-8 pm, you want to make sure your tank water heater can hold enough water to support that peak demand.

Let’s say taking a shower takes roughly 10 gallons of water, running the dishwasher takes 6 gallons, and the laundry washer takes 7 gallons. That means your household’s peak demand is around 23 gallons.

After calculating peak demand, the plumber will then find the right size tank water heater for your household using a first-hour rating (FHR), which refers to the maximum amount of hot water it could produce in an hour. They will find a water heater FHR within 3 gallons of your peak demand.

For example, if you use 23 gallons of water during peak demand, the plumber will recommend tank water heaters with an FHR of around 26 to ensure your household has enough hot water even when multiple water appliances are going.

You might wonder why the plumber doesn’t just recommend a 23-gallon tank water heater. This is because the FHR is a realistic estimate of how many guaranteed gallons of hot water your household can use in an hour without waiting for reheating. Going by gallons of water a tank water heater can hold doesn’t guarantee that it will be hot water since it has to refill with cold water once hot water flows out of the tank to an appliance.

Fuel Type

Depending on the water heater’s fuel type, you could be looking at a higher installation cost but a lower monthly operating cost or vice versa.

Tank water heaters typically use either gas or electricity for fuel. Gas water heaters tend to be pricier to install but have low monthly operating costs compared to electric water heaters, especially in Iowa.

In general, choosing a fuel type is greatly impacted by your current water heater’s fuel type. If you have an electric water heater but want to switch to a gas one, you will have to install gas lines and special venting. If you have a gas water heater but want to switch to an electric one, you’ll need to install the infrastructure needed to support it.

You can discuss with a plumber the cost-to-benefit ratio of installing a water heater with a different fuel type than your current one.

Efficiency Rating

The more efficiently a tank water heater can heat water, the higher on the price spectrum it will be to install, but the more likely you will benefit from long-term savings.

Plumbers measure water heater efficiency with an Energy Factor (EF). According to the Department of Energy, it measures how much hot water is produced per unit of fuel consumed. Higher EF ratings can range from 0.64 to 2.20, with higher ratings meaning more efficient water heaters.

Usually, gas water heaters have a 0.58-0.80 EF, and electric water heaters have a 0.90+ EF. Gas water heaters with an EF of 0.60+ and electric water heaters with an EF of 0.90+ can help reduce the cost of your monthly bills.

Speak to a plumber to determine if a highly efficient water heater is the best option for your household, budget, and long-term savings goals.

Labor Costs

Hiring an experienced plumber can make all the difference in your tank water heater installation’s quality. While an experienced plumber can have a higher price range, a higher-quality installation can mean saving money on repairs and greater long-term efficiency and performance for the water heater.

You want to check for the following when looking for a qualified plumber:
  • Licensing and insurance: Check the contractor’s website or their Better Business Bureau (BBB) profile.
  • Provides upfront written quotes so that you are never surprised by the final bill
  • Positive customer reviews: Look for good reviews on sites like Google, Facebook, and BBB.
  • Provides warranties and guarantees: You want to hire a plumbing company that will back up their work.
  • 10+ years of experience: A plumbing company that knows your area and has an established presence in your area will have a proven track record.
Your labor costs could also increase if:
  • Your plumbing isn’t up to code
  • You need to install gas lines and vents or electric wiring and infrastructure
  • Your water heater needs space modifications to accommodate its tank size

Want an experienced plumber to provide you with a free, in‑home estimate? Contact Golden Rule.

Make one call to Golden Rule at 515-393-4526, and we’ll have a brand-new tank water heater installed in your home as early as the same day you contact us. We stock our vehicles with the most popular tank water heater models to ensure fast same-day installations. For over 20 years, we’ve offered warranty and guarantee protections that other plumbers cannot match in the Des Moines Metro area.

Schedule with us today and see why thousands of Iowa homeowners rate our plumbers ‘ star

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If you found this post helpful, learn how does a tankless water heater work:

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