Replacing a water heater can come with a high price, and many people often wonder why that is. For one, it isn't just the installation labor we pay for; it's also the new water heater itself. Prices for those can span a wide range, depending on type and size, as can the prices on the various special tools and materials that might be needed for the job. Also, don't forget about our old friend "code." The local plumbing "code" can affect how complex a job is and how many extra materials might be needed to get "compliance." Finally, if the job takes a little longer than expected (and installation work sometimes can), well, then, that's just a reflection of the pay we're giving for some good, old-fashioned, specialized plumbing skills.The work might also encompass other responsibilities, such as taking out the water heater that is no longer in service, examining and maybe enhancing the plumbing connections so that they function well with the new appliance, and properly discarding the water heater that is no longer in service. Referrals, reviews, and quality all figure in this. Insurance, licensing, and experience all add to the overall expense because these well-maintained numbers ensure customer safety and quality service. Lastly, this is a tradesman-replacement job that is in demand, and that fact alone can push the price up.