Replacing your water heater costs anywhere between $500 and $5,000. This price depends on the type of water heater, the size of the unit and the cost of installation. For instance:
The average cost to install an electric-powered, 40-gallon tank-style unit in a two-to-four person home is $750.
A tankless unit costs roughly $2,000.
Gas heaters cost $50 to $100 more than electric units.
Other costs include permits, retrofitting and enhancements.