TL;DR: Replacing a water heater in NWA typically runs $1.5k–$5k+ depending on tank vs. tankless, fuel type, and the installing contractor. Franklin offers free in-home replacement quotes and same-week install on most jobs.
Tips for saving money when replacing a water heater
Despite what service companies try to tell themselves, no one likes to replace their hot water heater. Replacing a water heater is a big investment and often comes at an unexpected time. That said, it is a purchase you can save money on if you play your cards right.
1. Get all the utility rebates you can. There’s real utility money on the table for heat pump water heater replacements. SWEPCO offers up to $1,150, and Ozarks Electric offers $500. Read more about available rebates here.
2. Consider getting multiple quotes. If you don’t feel good about the first quote you got, get another (or two). On the exact same equipment, NWA homeowners regularly see quotes swing hundreds to thousands — quotes are free, so the only cost is an hour of your time. If you’ve already got one and it feels off, we’ll come out for a free second opinion, no obligation to switch.
Quick summary of the different kinds of hot water heaters
[Gas] Tank hot water heater. The most common water heater out there. Uses natural gas or propane to keep a tank of water warm.
[Gas] Tankless hot water heater. Becoming more common by the day. Creates hot water on-demand, which is very efficient and allows for effectively unlimited hot water.
[Electric] Tank hot water heater. Uses electricity to keep a tank of water warm. Costs more to operate than a gas version.
[Electric] Tankless hot water heater. Uncommon. Requires a large amount of power, sometimes a new electrical panel. We do not recommend them for homes in NWA.
[Electric] Heat pump hot water heater. Less common but growing. The most efficient option, but also the most expensive. Often eligible for large utility rebates.
Tankless water heaters vs tank water heaters
The biggest difference: a tankless water heater makes hot water on the spot, only when you ask for it, while a tank water heater keeps a big reservoir hot 24/7 whether you’re using it or not. Heating on demand is more efficient and means you don’t run out mid-shower. Watch this video if you want to see how they work.
Why homeowners go tankless:
1. Effectively unlimited hot water. Because it heats water as it flows, a properly sized tankless unit never “runs out.” Back-to-back showers, a bath while the dishwasher runs — it keeps up where a 40–50 gallon tank would leave the last person cold.
2. It frees up space. A tankless unit is about the size of a small suitcase and hangs on the wall, reclaiming the floor space a bulky tank used to occupy in a closet, garage, or utility room.
3. Longer lifespan. Tankless units typically last 15–20 years vs. 8–10 for a conventional tank, and most have serviceable parts rather than a single tank that rusts out.
4. Lower standby energy loss. A tank loses heat around the clock just keeping water warm. Tankless skips that, so you’re not paying to reheat water you never used — a meaningful difference on a gas bill over the unit’s life.
5. No tank to rupture and flood. When a tank fails, it can dump 40–50 gallons onto your floor. There’s no stored reservoir in a tankless unit, so that particular failure mode is off the table.
Worth thinking about: tankless costs more up front — both the unit and the install, which usually means upsizing the gas line and adding dedicated venting. A single unit also has a flow-rate ceiling, so it has to be sized to how many fixtures your household runs at once. And — this matters a lot in NWA — our hard water scales up the heat exchanger over time, so tankless units need an annual descaling flush to keep running efficiently and stay under warranty. Our plumber will tell you honestly whether tankless makes sense for your home and how you use hot water.
A tankless water heater install is more involved than a like-for-like tank swap — it usually needs gas-line and venting work to do right — so it’s worth a free in-home quote before you commit. Franklin handles tankless water heater installation across NWA, sized and vented to code, with a flat-rate price before any work begins.
What is a heat pump water heater?
A heat pump water heater is a tank water heater with a small heat pump on top — instead of burning gas or running an electric heating element, it pulls heat out of the surrounding air and moves it into the water. Same look as a conventional tank, very different mechanics.
Why homeowners are switching:
1. Two to four times more efficient than a standard tank. Because it moves heat instead of generating it, a heat pump uses a fraction of the electricity for the same gallons of hot water. Most NWA households see annual operating costs drop by $100–$550 versus an electric tank.
2. Local utility rebates. SWEPCO offers up to $1,150 back for installing a heat pump water heater, and Ozarks Electric offers a $500 rebate. The rebate often brings a heat pump within range of (or below) a comparable gas or electric replacement.
3. All-electric, no gas line required. Great if your home doesn’t have natural gas, if you’re trying to move off gas entirely, or if running a new gas line would be expensive.
4. Longer lifespan. Typically 12–15+ years vs. 8–10 for a conventional tank, because the heating elements don’t wear out the same way.
5. Dehumidifies as a side effect. Since the unit pulls heat out of the surrounding air, it cools and dries the room around it — nice if it lives in a humid basement, garage, or utility room.
Worth thinking about: heat pump units are louder than tanks (think small dehumidifier running), need air space around them (so they don’t work in cramped closets), and have a slower recovery rate than a gas tank. Our plumber will tell you honestly whether your home is a good fit.