Does this pricing sound fair for tankless water heater install?

hdclownJuly 23, 2008

My gas company (TECO Peoples Gas) has a subsidizing program for a tankless water heater. They will pay select contractors up to $1650 towards a unit/install. In return, they bill me $24.99 over 60 months, which comesout

to $1499.40. So there's a $150 savings from that. TECO says that that cost typically cover the entire unit and a basic install.

TECO's primary contractor for my area called me and gave me a rough price of $1800-$2600, indicating 9 out of 10 times that the install comes in at the middle range of $2200-2300. That pricing does not jive with what TECO says about $1650 covering it.

This contractor uses Rannai and Nortiz units only. They said that they prefer to do exterior installs, I'd assume so they don't have to deal with venting through the roof. My current water heater is in the garage, less then 10 feet from the outside of the garage where the gas meter is, so there is not a lot of piping that needs to be run. Additionally, my entire house was re-piped with PEX, so the piping is all in the attic now.

I asked the contractor what effects the price and the said 3 things: electrical work, amount of plumbing needed, size of unit. The contract said I'd likely be at the 7.5/gpm range and they would need to run dedicated electrical for the unit.

Lastly, if I do this program through TECO, they provide their own 5 year warranty on the ENTIRE unit. They basically piggy back on the 10 year heat exchanger only warranty offered by the manufacturer and cover the entire unit for the first 5 years. Labor is no covered.

At the end of the day, when all my costs are paid (up front and over 5 years), I'm looking at around a max of $2000-2100 paid out of pocket.

So, what I'm looking to know if this pricing structure sounds reasonable and if I should go down this road.

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A 7.5 gal a minute unit from Rheem /Paloma costs ~$1100 with a basic vent kit. Your subsidized cost of $1500 from your gas company sounds like a deal and I would take it. The Rheem has a 10 year warranty on exchanger and 3 on everything else. If they want to extend it to 5 years, cool. Take advantage of the offer from your gas company!

I think contractors are charging too much for installing tankless heaters because they are new. The manufacturers are also pushing the cost up because they are trendy in the US. In Europe and Japan they have been using them for years. I don't know that Noritz, for example, is worth any better than the others. The only brand I wouldn't buy is Bosch -- only because it made a model that was a really bad design.

I don't know that the circuit needs to be dedicated. It's not a high current draw.

    Bookmark   July 23, 2008 at 2:48PM
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The $1450 cost I pay to the gas company is not guaranteed to cover the entire cost. The one place I spoke to so far told me $1800 MINIMUM. I'm getting a second quote today.

I basically contact one of 3 of the gas company's contractors who participate in this program and tell them I want a tankless water heater. They come and give me a price and the gas company pays them $1650, and I pay anything over that.

So at the end of the day, I pay $1450 to the gas company (over 5 years) PLUS any extra over $1650 for the unit+install.

I'm of the opinion that the gas contractors are upcharging if they know I want to use the gas company program, because it's a way to make more cash but the home owner still feel like they are "saving" money and get the benefit of an easy payment plan.

If I do an external mount, I need about 10 feet of PEX piping, 20 feet of electrical work, and 6 ft of gas piping. Everything is really close and direct access. So for someone to come and tell me that's going to cost $1000 for install sounds over-inflated to me.

    Bookmark   July 23, 2008 at 3:14PM
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I understand now.

I'm with you... $1,000 is too much for an install, esp with PEX and a short runs to the gas.

    Bookmark   July 23, 2008 at 4:39PM
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Got a second quote today. It breaks down as follows:

Nortiz 751, Outdoor mount
3 ft of 3/4 gas piping from meter to unit
40 ft of 3/4" CPVC ran from attic to outside unit
Disconnect, remove, and dispose of old unit

Total cost $2188.

No electrical is included, I'd have to pay that to an electrician to do.

The 40' of CVPC piping sound likes it 10 to 15' too much, but heck, that's good for maybe $5-$10 in materials.

The Nortiz 751 MSRP's at $1299 for an outdoor unit, so they're charging me $889 for installation, and then I'm probably looking at another $120 or so to get the electrical done.

The first place I spoke with said $2200-2300 would likely be the install price. Probably the same Noritz unit, but they'd include the electrical.

So, given I have some more specifics now, how much would a fair installation price be?

    Bookmark   July 23, 2008 at 6:00PM
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Also, I learned that my gas company offers a finance program, or a $450 rebate.

So at the $2188 quote I got above, I can enroll in the finance program and pay $538 up front, and then $25/mo over 60 months. That puts me at a grand total paid of $2038 (slightly less then the total price due to the financing deal)

Or, my gas company will pay the contractor $450 directly, and I cover the rest. This means I pay $1738 out of pocket up front, and everything is paid in full.

I also just found the Noritz N-0751 for outdoor install on eBay for $1059 with free shipping on eBay. I'm thinking about having a general gas company come out and quote me to install a unit I provide. That might come in cheaper.

    Bookmark   July 23, 2008 at 6:06PM
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I'm in NC and occasionally install tankless units. One other option you may look into is the new Rheem unit, so far it has been running less $ for an equal quality unit. The last Rinnia unit I did priced out at 1200.00 for the unit(included 3 bath outdoor unit, piping cover box, and plumbing kit) + installation and materials. Installation includes, mount new W.H. in spec. approved location, install plumbing kit(and freeze protection valves if purchased) run new electrical to unit(does not have to be isolated circuit here, only about a 3amp draw) Route plumbing to new unit, run new gas to unit (possibly requires that entire system be updated to manage new demand), install control panel in cust. desired location. This can take anywhere for a few hours to all day. Generally the ones I have seen run about $1700-$2500 complete.

    Bookmark   July 23, 2008 at 6:47PM
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Tom Pultz

One thing to consider in your case is the location of the unit. I put my Noritz N-084M up in the garage attic because it was out of the way and I had easier access to gas and existing hot and cold water lines. However, the unit is probably 10 feet or more further from the kitchen now and the wait to get hot water there is longer... probably a good 45-60 secs total. Sounds like your outside install could be even further away... and it does make a difference.

We've had the unit up and running since June 10th and so far I like it allot. Don't think I'll ever save any money since the gas piping, new gas meter and line out to the main were expensive... but the endless hot water is nice when you need it, and I love having the old tank unit out of the garage.

Being able to dial the temperature you want is convenient too, especially if you have small children that take frequent baths and want to protect them against scalding. For the most part I just leave it at 120 F, but when it was colder early in June (summer doesn't start in Seattle until August!) I tried setting it to 125 F and this seemed to get the hot water to the kitchen a bit faster. I've since dialed it back to 120 F and that seems fine now and plenty hot for showering.

Have not had ANY problems with the so-called "cold water sandwich" or times that the unit turns cold during a shower. Once activated I can set the flow down really low in the kitchen and still maintain hot water. I think the Noritz has a cold water bypass so that it can mix in some cold water with the hot if needed to maintain the set temperature during low flowrate conditions. Newer units that can regulate to a lower Btu/hr flame are probably even better.

As to your question... it really depends on whether you want to spend your money or the utility's up front. If you can buy the unit for less and get it installed that might be the way to go, BUT I think a lot of contractors will not install a unit you did not buy from them. That's what I ran into so I did it myself. Better check before buying.

I did not run a dedicated electrical line... just tied into the garage door opener circuit in the attic since the until only consumes 135 W max, 85 W nominal without the freeze protection heater on.

Have fun.

    Bookmark   July 23, 2008 at 7:28PM
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Moving my unit outside would put it about 8-10 ft further away from the kitchen, washer, and master bath. About the same to the guest bath. I'm not to concerned with the issues of getting hot water any slower if I move it 10 more feet.

Actually, because my house is re-piped with PEX, I can get burning hot water pretty much instantly in the summer because the water in the pipes in the attic gets so hot. It usually takes 10-15 seconds for that to flush out the sink/shower in my master bath (furthest from the water heater).

An attic install is going to put me into need to dealing with venting. It seems like having to adjust venting will be costlier then putting it outside. If I was going to go with indoor mount, I'd just put it on the garage wall that my current tank is next too. I'll have to ask this second contractor about the cost difference between inside and outside in my house.

    Bookmark   July 23, 2008 at 7:46PM
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I got a 2nd estimate today. This time for a Rinnai R75LSe. Total price, including electrical came to $2350.

The breakdown is $2050 for the unit and all plumbing, and $300 for electrical

Details: Exterior mount 3' from gas meter, so 3' of gas piping will be added. About 15 feet of plumbing would be added (tap off existing PEX in attic, run directly outside), and about 6 feet of electrical (tap off hot side of existing outlet near exterior wall, run directly outside). Controller would be mounted anywhere within 25' of the unit (somewhere in the garage, 5-15' max from unit)

Compared to my Nortiz751-OD price, this is pretty much identical. The Nortiz quote was $2188 but had no electrical, so that left $162 for electrical work. The contractor who recommended the Noritz would put it in the same location and do the same install.

The contractor today also sells Noritz but recommended the Rinnai for being cheaper and a better warranty (5 parts/12 exchanger vs. 3/10 on Noritz).

So it seems like $900 + electrical is about the standard for installation from a gas company recommended contractor.

So my question becomes, do I source a unit off eBay for $950-1150 and try and get the install done by an independent (estimating $500'ish), or do I just go it through a gas company recommended contractor.

    Bookmark   July 29, 2008 at 8:53AM
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I had the same Rinnai installed two months ago and am totaly happy with it. It was so good to get the old water heater out of the kitchen and now I have a neat unit under the attic steps.

Rinnai is the brand that both my contractor and appliance person says is the best. Both put units in their own homes in the last six months.

There are some yearly service issues with these tankless units that you or your local plumber may not be aware of or feel confident in doing.

I wouldn't go the ebay route and have it installed by someone who is not familiar with the unit. It's rather new technology in the US, so have somebody that can help you out if your water ever turns cold.

    Bookmark   July 30, 2008 at 10:37PM
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What kind of yearly issues are you referring to?

    Bookmark   July 31, 2008 at 7:12AM
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