1 CostHelper readers report paying $385-$750 for do-it-yourself installation of new water heater, at an average cost of $574, while a New Jersey reader reports paying $2,500 a plumber (triple the normal rate) to fix the botched do-it-yourself installation of a 40-gallon water heater. Electric water heaters typically cost less than gas units but are more expensive to operate. 2  Solar water heaters cost $1,000-$5,000 or more, with installation usually included in the purchase price. 3  A central, whole-house, gas tankless water heater can cost $800-$3,000 or more, without installation.