12 min read
How much does a water heater cost in Ontario, and should you rent or buy?
What a new water heater costs in Ontario in 2026: tank, tankless and heat pump models, brands and warranties, yearly running costs, the right size, rebates, and whether to rent or buy.
UbaFounder, Zulma
Buying a new water heater in Ontario usually costs $900 to $2,500 installed for an electric tank, $1,400 to $3,500 for a gas tank, $2,400 to $5,500 for a gas tankless, and $3,500 to $5,500 for a heat pump water heater, before HST. Renting one costs about $20 to $94 a month, with repairs and replacement included. Over 15 years, buying usually costs the same or less than renting. These figures come from four Ontario sources and Natural Resources Canada, which we checked on 20 October 2026.
Key points
- The type you choose decides both the upfront price and the yearly running cost. Electric tanks are cheapest to install and most expensive to run; heat pump water heaters are the reverse.
- Most Ontario homes use a 40 or 50 gallon tank.
- A tankless heater must be sized for Ontario's cold winter water, not summer water.
- The only active Ontario rebate we found for 2026 is $500 for a heat pump water heater, through the Home Renovation Savings Program.
- In Ontario, a water heater can't be sold or rented to you at your door unless you invited the company first.
The types of water heater, side by side
| Type | Installed price (before HST) | Running cost a year* | Typical lifespan | Best for |
|---|---|---|---|---|
| Electric tank | $900 to $1,600 | $520 to $680 | 10 to 15 years | Homes without gas; tight spaces with no venting |
| Gas tank | $1,400 to $2,200 | $280 to $360 | 8 to 12 years | Homes with a gas line that want a simple swap |
| Gas tankless | $2,400 to $3,800 | $220 to $300 | 15 to 20 years | Gas homes that want endless hot water and floor space back |
| Heat pump water heater | $3,500 to $5,500 | $140 to $220 | 12 to 15 years | Homes without gas, or switching to electric; rebate eligible |
*Running costs assume a family of four using about 80 gallons of hot water a day, at Enbridge and Toronto Hydro rates as of May 2026. Lifespans vary by source: Reliance puts a tank at 14 to 16 years, and Enercare says a gas tank can last 15 years or more.
iSource: EcoFrost Heating & Cooling, "Gas vs Electric Water Heater: Ontario Cost Comparison 2026" (May 2026).
Electric tank
Runs only on electricity, with no gas line or venting, so it is the easiest and cheapest to install. It is also the most expensive to run, about twice the yearly cost of a gas tank at current Ontario rates (EcoFrost). Electric tanks reheat more slowly than gas.
Gas tank (conventional or power-vented)
Heats water faster than electric and keeps working in a power outage. It needs venting, either into a chimney (conventional) or out through a pipe pushed by a fan (power-vented). Power-vented models need an outlet and run about as loud as a hair dryer (Home Depot). A power-vented gas tank is the usual rental tank in Ontario.
Gas tankless (on demand)
Heats water only as it flows, so there is no tank and no standby heat loss, and the unit hangs on the wall. ENERGY STAR certified tankless models use about 30% less energy than standard tanks (Natural Resources Canada). The catch is flow: a tankless unit can only warm so much water at once, and Ontario's tap water drops to about 5°C in winter, so it must be sized for January, not July (EcoFrost). Almost every whole-home tankless in Ontario is gas; a whole-home electric tankless usually needs a costly electrical service upgrade.
Heat pump water heater
An electric tank that pulls heat from the surrounding air instead of heating with an element. ENERGY STAR certified models use up to 50% less energy than a standard electric water heater, according to Natural Resources Canada's water heater guide (its product page says up to 70%). It needs room around it (about 750 cubic feet of air, per EcoFrost) and a 240 V circuit, and it cools the room it sits in, which helps in summer and less in winter.
Solar water heater
Preheats water using the sun, alongside a regular gas or electric heater. Natural Resources Canada says a system typically supplies about 60% of an average home's hot water, depending on climate and use. It is rare in Ontario homes and not included in the price table.
How much energy you can save
| Upgrade | Energy saving | Source |
|---|---|---|
| ENERGY STAR gas tank instead of a standard gas tank | about 9% to 14% less energy | Natural Resources Canada |
| ENERGY STAR tankless instead of a standard tank | about 30% less energy | Natural Resources Canada |
| ENERGY STAR heat pump water heater instead of a standard electric tank | up to 50% less energy (up to 70% on NRCan's product page) | Natural Resources Canada |
| Switching an electric tank ($520 to $680 a year) to a heat pump water heater ($140 to $220) | about $380 to $460 a year | EcoFrost's running costs |
EcoFrost puts the payback on a heat pump water heater at 4 to 5 years, the shortest of any type.
Brands and what they cost
Tank water heaters
Home Depot's regular Ontario prices for Rheem tanks (unit only, before installation and tax; prices as of August 2024, so treat them as a guide):
| Rheem tank | Fuel | Unit price |
|---|---|---|
| 40 gallon | Electric | $631 |
| 60 gallon | Electric | $679 |
| 40 gallon | Gas | $939 |
| 50 gallon | Gas | $1,116 |
| 60 gallon | Gas | $1,649 |
| 40 gallon | Hybrid (heat pump) | $2,985 |
Home Depot sells tanks in three warranty tiers: 6, 9 or 12 years on the tank and parts, each with a 1-year in-home warranty. The longer tiers also come with better hot water delivery and higher efficiency.
Tankless water heaters
EcoFrost, a GTA installer, publishes installed prices by brand (2026), including the gas line, venting and permit:
| Brand | Installed price | Known for | Heat exchanger warranty |
|---|---|---|---|
| Rinnai | $3,000 to $5,500 | Most-installed, wide range, easy to service | Up to 15 years |
| Navien | $3,200 to $5,500 | Highest efficiency, built-in recirculation | Up to 15 years |
| Noritz | $3,200 to $5,500 | High demand, large households | Up to 15 years |
| Rheem | $2,800 to $4,800 | Value | 12 to 15 years |
| A.O. Smith | $3,000 to $5,200 | Reliability | Up to 15 years on select models |
Bosch has discontinued its Therm series gas tankless heaters, so existing units can be serviced but are no longer a good choice for new installs (EcoFrost).
What size do you need?
Most Ontario homes use a 40 or 50 gallon tank. A 40 gallon tank suits 1 to 3 people; 50 or 60 gallons suits a family of four or more (Reliance). Home Depot sizes by bedrooms and bathrooms:
| Bathrooms | Bedrooms | Minimum tank size |
|---|---|---|
| 1 to 1.5 | 1 / 2 / 3 | 20 / 30 / 40 gallons |
| 2 to 2.5 | 2 / 3 / 4 / 5 | 50 / 50 / 50 / 60 gallons |
| 3 to 3.5 | 3 / 4 / 5 | 50 / 60 / 60 gallons |
For a tankless heater, add up the flow of everything that might run at once: a shower uses 1 to 2 gallons a minute, a dishwasher 1 to 2.5, a washing machine 1.5 to 3 (Home Depot). Then size for winter water temperature.
Rent or buy?
What renting costs
| Water heater | Buy, installed | Rent, per month |
|---|---|---|
| Electric tank, 40 to 50 gallons | $1,000 to $2,500 | $20 to $37 |
| Conventional gas tank, 40 to 50 gallons | $1,200 to $2,900 | $25 to $57 |
| Power-vented gas tank, 40 to 50 gallons | $1,700 to $3,500 | $39 to $57 |
| Tankless gas | $2,700 to $5,500 | $45 to $63 |
| High-efficiency gas tank | not listed | $66 to $94 |
Reliance, which rents water heaters on 7 and 10 year terms, notes that some companies stretch rentals over 15 years to show a lower monthly price, so compare the length of the term, not only the monthly fee.
iSource: Reliance Home Comfort's 2026 Ontario guides.
The 15-year arithmetic
Take a rental at $45 a month: $540 a year, or $8,100 over 15 years, before HST. Across $30 to $60 a month, 15 years of rent is $5,400 to $10,800. Buying and maintaining a tank over the same 15 years runs about $4,050 to $10,400 (Builders Ontario).
A quick test: divide the installed price of the heater you'd buy by your monthly rent. A $2,750 power-vented tank divided by $45 a month is about 61 months. If you'll stay in the house well beyond that, buying usually wins.
What renting covers, and what owners pay for repairs
Renting includes installation, repairs, parts, labour and replacement if the tank fails. If you own, you pay once the warranty runs out. Enercare, which also rents water heaters, lists these repair prices for customer-owned tanks:
| Repair | Parts and labour (before tax) |
|---|---|
| Venter assembly | $827 |
| Gas valve | $526 |
| Flame sensor | $342 |
| Thermocouple | $183 |
Rent if a surprise bill like these would be hard to cover. Buy if you have savings and a plumber you trust.
Rebates in 2026
- Heat pump water heater: $500 through the Home Renovation Savings Program, for replacing a gas, electric, propane or oil water heater with an ENERGY STAR certified heat pump water heater. You need a home energy assessment first, and at least two energy-saving upgrades in total.
- Gas tank or tankless: no active rebate that we found for 2026. EcoFrost reports that Enbridge's older Home Efficiency Rebate Plus, which covered tankless heaters, closed on 31 December 2025.
iSource: Home Renovation Savings Program (homerenovationsavings.ca), checked 20 October 2026. Rebates change, so check before you buy.
Installation and labour
- Labour: installation usually runs $500 to $1,500 for a tank and $1,000 to $3,000 for a tankless, on top of the unit (Reliance).
- Time: a same-size gas tank swap takes 2 to 3 hours; a tankless install 4 to 6 hours; a heat pump water heater 4 to 5 hours (EcoFrost).
- Switching from gas to electric adds about $1,200 to $2,200 for a new 240 V circuit and capping the gas line and flue (EcoFrost).
- Who can do the work: a gas water heater is installed by a TSSA-registered contractor with a certified gas technician; a new electrical circuit is done by an ESA-licensed electrical contractor with a permit (Builders Ontario).
Your rights in Ontario
- No door-to-door sales. Ontario's consumer protection law bars businesses from selling or renting water heaters, furnaces, air conditioners, water treatment devices and similar products at your door unless you contacted them first and invited them. A contract signed after that kind of door-to-door marketing is void, and you can keep the equipment with no obligation.
- No new liens. Ontario's Homeowner Protection Act, which became law on 6 June 2024, bans registering Notices of Security Interest (liens on your home's title) for consumer goods such as a rented water heater. It doesn't cancel older contracts, so talk to a lawyer before you sell if an old one is on your title.
iSource: Government of Ontario, "Door-to-door sales and home service contracts" (updated 19 June 2026).
How to get out of a water heater rental
- Find your contract. The tank usually has a sticker with the rental company's name. The contract sets the buyout price and the return terms.
- Ask for the numbers in writing: the buyout to keep the tank, or the removal fee, usually $200 to $500, to return it (Builders Ontario).
- Get two or three quotes for a replacement on the same written scope.
- Return the old tank as the contract says, and get a receipt.
- Get written confirmation the account is closed, and check your next two bills.
Looking after your water heater
From Home Depot's maintenance tips:
- Test the temperature and pressure relief valve once a year. If it keeps running after you close it, call a licensed contractor.
- Flush the tank once a year to clear sediment.
- Insulate the hot and cold pipes near the heater.
Tankless heaters need descaling once a year, especially in areas with hard water (EcoFrost).
Signs it's time to replace it
- Water leaking from the tank itself: the tank likely needs replacing (Enercare).
- Rusty or discoloured hot water (Enercare).
- Age: Home Depot suggests considering replacement after 10 to 15 years.
- Not enough hot water, or hot water that comes and goes, rising energy use, or new noises (Home Depot, Enercare).
If the tank is leaking, turn off the water heater and shut off your home's main water supply.
Questions people ask
What is the average cost of replacing a water heater in Ontario? About $1,400 to $2,200 installed for a gas tank, $900 to $1,600 for an electric tank, $2,400 to $3,800 for a gas tankless, and $3,500 to $5,500 for a heat pump water heater, before HST.
How much is a water heater for a 2,000 sq ft house? Size matters more by people and bathrooms than square footage. A home with 2 to 2.5 bathrooms and 3 or 4 bedrooms usually needs a 50 gallon tank, which costs about $1,400 to $3,500 installed for gas depending on the venting.
Is there a rebate on water heaters in Ontario? Yes, $500 for a heat pump water heater through the Home Renovation Savings Program, with an energy assessment and at least two upgrades. We found no active 2026 rebate for gas tank or tankless heaters.
How much does labour cost to replace a water heater? About $500 to $1,500 for a tank and $1,000 to $3,000 for a tankless, on top of the price of the heater.
Is it cheaper to buy or rent a water heater? Over 15 years, buying usually costs the same or less: rent runs $5,400 to $10,800 over 15 years at $30 to $60 a month, against about $4,050 to $10,400 to buy and maintain. Renting includes repairs and replacement.
Do tenants have to pay water heater rental in Ontario? It depends on the lease. Ontario's standard lease has a section where the landlord and tenant agree on who pays for utilities and which services are included in the rent, so check what yours says.
How much does it cost to rent a hot water heater in Ontario? About $20 to $37 a month for an electric tank, $39 to $57 for a power-vented gas tank, $45 to $63 for a tankless gas heater, and up to $94 for a high-efficiency gas tank.
How much does it cost to buy a water heater in Ontario? See the first question: about $900 to $5,500 installed, depending on the type.
How long does a water heater last? Estimates run from 8 to 12 years for a gas tank (EcoFrost) to 14 to 16 years (Reliance). Tankless heaters last 15 to 20 years.
Can someone sell me a water heater at my door? Not in Ontario, unless you contacted them first and invited them.
Find a plumber near you
Zulma Atlas lists plumbers across 39 towns, from Niagara to Toronto, York and Durham, with the services each one publishes. Find plumbers in your town
Sources (checked 20 October 2026)
- EcoFrost Heating & Cooling, "Gas vs Electric Water Heater: Ontario Cost Comparison 2026" (12 May 2026) and "Tankless Water Heaters in Canada" (3 August 2026).
- Reliance Home Comfort, "Rent vs. Buy Water Heater in Ontario (2026)" and "The 2026 Ontario Water Heater Pricing Guide".
- Home Depot Canada, "Best Water Heaters for Your Home" (unit prices as of 6 August 2024).
- Builders Ontario, "Water Heater Rent or Buy Ontario 2026" (October 2026).
- Enercare, "Water Heater Rental vs. Buyout" and its troubleshooting guides.
- Natural Resources Canada, "Guide to residential water heaters" (modified 10 June 2025) and its ENERGY STAR product pages.
- Home Renovation Savings Program, "Energy assessment required upgrades".
- Government of Ontario, "Door-to-door sales and home service contracts" (updated 19 June 2026) and "Guide to Ontario's standard lease" (updated 27 October 2025).
Written by Uba, founder of Zulma. Last checked 20 October 2026. We re-check these prices every six months.
