Beware of outrageously expensive water heater replacements

Many large plumbing companies are charging an outrageous amount of money for a simple water heater replacement. I have no problem with a company charging more money when they deliver more value, but that’s not what’s happening here.

Outrageous, you say?

Let me explain, and then you can decide for yourself. While the plumbing companies I refer charge somewhere in the neighborhood of $1,500 to $1,800 for a simple water heater replacement, I’ve heard numerous stories of plumbing companies charging over $6,000 for the exact same work. Does that sound outrageous to you?

I know what you’re thinking: I’m not comparing apples to apples, right? But I am. We’re talking about the replacement of a 40-gallon natural draft water heater. No modifications to the water, gas, or venting systems. Permit pulled, old water heater hauled away, no special warranties. All done by a licensed plumber. That’s it. It’s a very simple swap out, and some companies are charging three to four times what other companies are charging.

Water heaters are water heaters

Your plumber won’t install a special water heater. There’s very little difference in water heaters from manufacturer to manufacturer; in fact, so little that I consider water heaters a commodity.

As for the actual product costs, you can easily find this through the website of any big-box retailer. For example, a 40-gallon natural draft water heater with a six-year warranty sells for $519 at Home Depot. You can step up to a water heater with a twelve-year warranty for $719. And if we’re talking about a 50-gallon water heater, it’s not a huge increase in price. Only $799 for a 50-gallon water heater with a twelve-year warranty.

If you need a powervent water heater, you can plan to spend nearly twice as much for the product, and you only get a six-year warranty.

Side note: Home Depot sells extended warranties for their water heaters. You get an additional five years of coverage for $75. This is the greatest steal in the world, for people like me. Here where I live in Maple Grove, the average life of a water heater is approximately seven years. My powervent water heater has a six-year manufacturer’s warranty, and it is surely going to fail within the first eleven years of its life (6+5). When it does, that extra $75 is going to cover the cost of a new water heater along with the labor. I seriously feel like I’m doing something dishonest by purchasing this warranty.

How much work is it to replace a water heater?

If you’re simply swapping out a water heater, there’s not much to it. You disconnect the water lines, the gas line, and the gas vent. You drain the old tank, swap out the T&P discharge tube, then connect the new water heater. Seriously, this ain’t rocket science. I don’t do this for a living, yet a simple replacement only takes me about two hours, including the time to bring the new one in, drain the old one, and haul the old one out. Check out the video above for an old water heater replacement demonstration I did with my pops about seven years ago. I sped a bunch of stuff up and did some editing so it wouldn’t be a long video, but you can still see all of the major steps.

Special circumstances will make stuff take longer, of course. If there aren’t dielectric unions in place, those might need to be added. I did those in the video above. If the gas valve is an old type that’s no longer approved, it might need to be replaced. And if you’re changing from a tank water heater to tankless, that’s another story. It’ll be way more money for both the water heater and the labor… but still, not $6,000 if you hire someone with fair pricing.

Conclusion

If you need a new water heater, call around for pricing. Get recommendations. Don’t call the phone number on the first billboard you see. Be aware that there’s a HUGE difference in price for the exact same thing.

I’m not advocating DIY installations unless you’re qualified to do the work, and even in those cases, I still recommend obtaining a plumbing permit. Besides being a rule-follower, you benefit from having your work inspected by the city for a very low cost.