18 Feb. 26
Tankless Water Heater Costs in Chicagoland: How Much Money Can You Save Per Year in Cook County, IL?
Tankless Water Heater Cost in Chicagoland: How Much Money Can You Save Per Year by Calling Arco Plumbing?
If you’ve ever tried to Google the cost of a tankless water heater in Chicago, you already know the numbers are all over the place.
That’s because Chicago homes vary wildly: historic bungalows, West Loop high-rises, Lincoln Park 2-flats, Oak Park single-family homes.
Each of these homes come with unique installation challenges.
Meaning, tankless water heater costs vary, with an average initial cost of $2,500.
As for how much you can save, expect to save between $50 to $180/year on average.
Why? It depends on several factors and primarily how many people are using it.
Why Chicago Homeowners Are Switching to Tankless
A tankless water heater heats water only when you need it. No 40 to 75-gallon tank. No constant reheating. No running out mid-shower because the water suddenly turns cold.
That’s right. One of the main selling points of a tankless water heater is having unlimited hot water.
Here at ARCO Plumbing, several Chicago homeowners have told us:
- “I’m tired of the tank failing every 10 years.”
- “We just don’t have room for a giant tank anymore.”
- “There’s not enough hot water for everyone at home.”
Still… there’s the hesitation:
“Is a tankless water heater actually worth it?”
“Or is this just another expensive upgrade?”
“Will draining my water heater be difficult? What about maintaining it?”
Here’s a general breakdown of what to expect – from installation to maintenance.
How Much Can a Tankless Water Heater Save Per Year in Chicagoland?
Since usage varies per family or home, we’ll use key assumptions of what we’ve learned here at ARCO Plumbing through the years in a typical Chicago household:
- 3 to 4 people
- Natural gas
- Gas at ~$1.00/therm
- 60 gallons/day hot water use
- Chicago groundwater temp: 40–50°F in winter
- Tank heater efficiency: ~0.60
- Tankless efficiency: ~0.90–0.95
| System | Annual Gas Use | Energy Cost | Maintenance | Total Annual Cost |
| Standard 50-gallon tank | 275–325 therms | $275–$325 | $0–$80 | $275–$405 |
| Gas tankless | 180–220 therms | $180–$220 | $120–$200 | $300–$420 |
Expected Savings Per Year:
- Light-use homes: $50–$120/yr
- Average homes: $120–$180/yr
- Heavy-use homes (5+ people): $180–$300/yr
Tankless water heaters typically have an 8 to 14% energy efficiency for homes with a high demand for hot water.
High demand is around 86 gallons per day.
Whereas homes that use less than or roughly 41 gallons per day (low demand), the energy efficiency could increase to 24 to 34%.
Payback Period (ROI)
Three-Family Home
- ROI: 16-17 years
- Net yearly savings: ~$120
- Install difference vs tank: +$2,000
- Lifespan benefit: Tankless lasts 15–20+ years (vs tank’s 8–12)
Five-Family Home
- ROI: 8-9 years
- Net yearly savings: ~$220
- Install difference vs tank: +$1,800
Is It Worth Spending for a Tankless Water Heater?
If your goal is comfort and endless hot water, tankless wins immediately.
If your goal is pure ROI, the alternative is to go for tankless water heaters powered by gas. They’re much easier to maintain too.
Solar tankless water heaters are viable as well, but have the highest installation costs (more on this later) than all other types.
That said, the cheapest option would be a water heater tank. For larger homes, this can be a struggle though since you’ll need a larger tank and space becomes a major issue.
You can also learn more about our heater services on our general plumbing services page. For detailed information, you can contact us immediately.
| Feature | Tank | Gas Tankless |
| Hot water supply | Finite | Endless |
| Footprint | Large | Small, wall-mounted |
| Upfront cost | Lower | Higher |
| Lifespan | 8–12 yrs | 15–20+ yrs |
| Best for | Tight budgets, low use | Comfort lovers, busy households |
Tankless Water Heater Cost Installation in Chicago
Tankless water heater costs depend mostly on the size and age of your home. And Chicago homes vary wildly.
There are 100-year-old bungalows in Irving Park to modern lofts in the West Loop. An older home might mean tougher installation leading to higher costs.
Naturally, a tankless water heater enough for 6 people costs more than it will for 2 or 3.
Below is an average range of tankless water heater costs, starting from single family homes.
Typical Installations (Most Single-Family Homes)
Average range: $2,000 – $4,500
This is the most common range for homes in several areas like:
- Lakeview
- Oak Park
- Lincoln Park
- Portage Park
- Norwood Park
Installation costs factors:
- Standard venting
- Permit + materials
- Quality gas tankless unit
- Moderate installation labor
Higher-Complexity Installations (Older Homes or Challenging Layout)
Average range: $5,500 – $8,500+
Complex layouts require harder labor, more tools, and a thorough inspection that may include adjusting the gas line.
Some of the most common aspects involved in high complexity installations include:
- Long vent runs
- Gas line upsizing
- Multi-unit buildings
- Tight mechanical spaces
- Condensing unit drain routing
- Brick exterior vent drilling required
Lower-Cost Scenarios (Ideal Conditions)
Average cost: $1,383 – $3,806
If all is well and the installation doesn’t require additional labor, the average is usually around $2,500.
These cases are rare but possible in some areas around West Loop, South Loop, or Uptown.
| Cost Component | Low End | Typical | High/Complex |
| Unit price | $400 | $1,100–$2,600 | $3,000+ |
| Installation labor | $900 | $1,200–$3,500 | $3,000–$5,000 |
| Gas/electrical upgrades | $0 | $500–$1,200 | $1,500–$3,000 |
| Venting + condensate | $150 | $300–$900 | $1,500+ |
| TOTAL Installed | $1,383 | $2,000–$4,500 | $5,500–$8,500+ |
Why Chicago Has Such a Wide Cost Range for Tankless Water Heaters
Chicago-specific factors influence pricing more than you would expect:
- Older homes needing gas line resizing
- Long vent runs in classic Chicago flats
- Brick exteriors requiring special drilling
- Municipality-dependent permits and inspections
- Chicago’s notoriously hard water, often requiring scale filtration
- Multi-unit buildings needing HOA, fire code, or building engineer approval
The real question isn’t “How much does a tankless water heater cost?”
It’s “What does a tankless water heater cost for my type of Chicago home?
How to Know If You’re Ready for Tankless?
Before you consider switching to tankless, here’s a quick checklist to make the decision process easier:
- Your home has natural gas
- You want a longer-lasting system
- Your tank heater is 8–12 years old
- You’re tired of tank failures and flood risks
- You have multiple showers/laundry demands
- You experience lukewarm or inconsistent hot water
Want Unlimited Hot Water? Talk to ARCO Plumbing
When you book an estimate or schedule a service with ARCO Plumbing, you get:
- Clear options (tank vs tankless)
- A cost breakdown for your home
- Accurate sizing for Chicago winter
- A transparent, code-correct installation plan
Call ARCO Plumbing today at 630-960-5950.