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I bought a water heater from lowes today with installation cost of $329. They said if I needed anything done it would cost more depending on what was needed. Ok I get that. The way the contractor who lowes hired to do the job was speaking seemed like theres definitely going to be added cost. Asked how big are my pipes going into the water heater because NJ changed laws a few years ago. My water heater is very old but still works. (it's probably 20 years old)

I also didn't know I had to pay for a permit which could cost up to $200 I live in Union Township. The installers said they are not told the cost until after the job. I have to write a check to the township and give it to them. They will then write the mount and send it off.

What are typical cost for installation? And does anyone know the cost for the permit for Union Township?
I have $50 rebate from lowes for installation (better than nothing)

Never heard of a permit required. Had mine replaced fully installed by Home Depot. $1200 including all of the additional exhaust and piping work.

I recently learned that replacing a water heater is unnecessary for most cases unless it was leaking water due to rust. A few simple cheap parts usually will make a water heater last another 5-7 years.

I am not following what you said about the permit cost. We did replace a water heater ( a few times!!) and did have PSEG worry free contract. If I remember correctly it was indeed several hundred dollars (like I think over 500). The water heater itself was covered as it leaked before warranty was over.
Were you not quoted the installation cost?
Regarding the permit- you should call your town and inquire. I think I do remember that perhaps the permit was included in the install but then again we paid more than 329 for the install.. My long way of saying I think it sounds reasonable to me. bit I would definitely call the township.

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I paid $900 including installation for a 50 gallon Rheem water heater in the spring

Did have an issue with the size of the pipes, $50 cash and guy fixed that. I believe it would have been $100 upcharge through the company.

No permit

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Permits ARE required.

Anyone with a license will do it to code and not risk their very expensive license. The upgrades they warn you about are often cases where code has changed since the last one was put in. The best example I can think of is NJ increased the flue pipe size requirement for gas water heaters. Figure 500+ for that one. Without knowing what is in your house, that is why they hedged on extras.