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Cost Factors for Replacing Your Water Heater in MN

Closeup of a tech working on a water heater connection with a wrench.

When the time comes to replace your water heater in Minnesota, you'll find yourself navigating a wide price range, typically between $1,600 and upwards of $10,000. This broad spectrum is primarily influenced by the cost of the water heater unit itself, making it crucial to have a clear budget in mind when consulting with your plumber and exploring your equipment options.

For instance, opting for a traditional tank-style water heater might cost up to $4,800 for a complete installation. On the other hand, the starting price for installing a tankless water heater could be around $5,000. This guide aims to dissect the various elements that contribute to the overall cost of replacing a water heater in Minnesota, covering aspects such as:

Be sure to also ask about long-term savings. Some energy-efficient installations may be eligible for rebates or tax incentives to help offset the cost of making the switch. Let's look at some of the more common options available to homeowners in Minnesota.

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Water Heater Type

Closeup of a tankless water heater affixed to a wall.

Tank, tankless, or hybrid are the three standard options for water heater type. A traditional tank heater is the least expensive to buy and the most expensive to operate, but even with long-term savings, expect to spend more on a tankless or hybrid heater over the unit's lifetime.

Tankless heaters are popular in Minnesota because they never run out of hot water, which is great when hopping into a hot shower on a cold winter morning. Hybrid systems are even more convenient, with a small tank of already heated water available to use while the system heats up to keep a steady stream. Expect to pay at least triple for a tankless water heater compared to a traditional tank unit during installation, but you'll also get about double the lifespan.

Brand & Quality

As with any major purchase, brand matters. You wouldn't buy a car from a company you've never heard of, and you shouldn't buy a water heater from a manufacturer without a reputation for quality. Better brands typically offer longer and more comprehensive warranties, which does keep costs a bit higher. Premium pricing, when paired with premium quality, is often a saving in the long run.

Size & Capacity

The number of gallons of hot water the unit can produce per hour is often closely associated with the price. For a tank water heater, that means a larger tank costs more since your hot water is limited to whatever is stored in the tank.

A tankless water heater produces hot water on demand, which means it takes a bit longer to get hot water when you first turn on the faucet, but after that, you shouldn't run out. However, capacity is an essential metric for these heaters if you have several bathrooms and water-using appliances that may run simultaneously. If your tankless heater can't provide enough hot water to keep your shower hot while you run the dishwasher, it's an inconvenience.

Fuel Type

Gas and electric energy are the two main options for water heaters in Minnesota. Expect a gas-powered heater to cost more to buy but to last longer and cost less monthly. However, not all homes have local gas lines available, so electric may be the way to go.

Energy Efficiency

When considering the monthly costs to operate a water heater, tankless units are the clear winner. This style of water heater is top-notch when it comes to energy efficiency, saving an average of 8-14% on the cost of hot water compared to a traditional tank water heater. While these savings don't make your monthly utility bills substantially lower, consistent savings with rising energy prices can be a good deal in the long term.

The Contractor You Hire

Be sure to work with a reputable company no matter what water heater you choose to install. You want a company like MSP Plumbing Heating Air to handle the installation so that you get a good warranty and access to flexible financing.

Warranty Coverage

At MSP Plumbing Heating Air, you get a water heater installed right the first time — and always according to manufacturer instructions. That means you're covered for repairs for as long as the warranty lasts.

Financing Options

We partner with Wells Fargo to offer our customers a flexible line of credit on approval. You can use the credit for any home improvement project, including hot water heater installation or repairs.

Need a new hot water heater?

Let the experienced plumbers at MSP Plumbing Heating Air help with your tank or tankless water heater installation. We have more than 100 years of experience delivering reliable hot water to Minnesota homes.