I've seen some of the previous posts on tankless water heaters but none seem to have addressed my two main questions?
1) What does the system cost?
2) What does it save?
I recently got a quote for almost $3,000. It would have to save a lot of energy (even with recent high prices) to pay back the difference between it and a new, efficient regular water heater. My guess is that just like new windows, there's no real payback.
I just started exploring this, so don't have real experience.
Just surfing the Net, I see there are tankless systems (100K+ BTU burners - Bosch & Takagi) for under $1,000, and I figure installation of $500-$1,000, so $3K looks high to me. I replaced my 40 gal heater just 2 years ago at $588 (all-in cost w/ $94 Sunnyvale permit and EQ bracing) after it started leaking, and had I've been smarter, I would have selected a 50 gal (maybe 60 gal) tank, and forget looking at a tankless 2 years later. Someone posted in this site a comment that heating & holding water in a tank is a primitive way to get hot water, but at a $1,000+ spread (and limited number of qualified technicians to service problems), a 50-60 gal tank looks pretty good to me.
Basically, the utility of having "unlimited" supply of hot water on demand is a real turn on for some, but the $ calculus doesn't seem to pencil out.
Now, wait for the contrary opinions to flow in . . .
It doesn't work out financially. The tank type heater is a primitive way to heat water, but it's also a simple beast that's cheaper to make. Supposedly the tankless heaters last quite a bit longer (it's the tank itself that usually dies on the heater) so I suppose that you could argue that the tankless heater is cheaper than two tank replacements. That's only going to help you if you are planning on living in the house for long enough to outlive that first water heater, though. I believe that the high cost of installation is because you need to install a bigger gas supply line.
I stopped by Home Despot for a part, and while browsing, was surprised to see a display for Bosch tankless water heaters - - they range from $500 for a low end model to $1,073 for the most expensive, plus installation & permit. The San Jose store (DeAnza Rd) had an extensive GE tank display, but very little info on the Bosch heater.
The Bosch efficiency numbers didn't look impressive, and the "bullet points" on the differences among Bosch models are (1) most handle 1 critical (vs. 2) use simultaneously - shower, laundry, dishwashing, etc., and (2) BTU burner rating. In any event, seeing the Bosch units in Home Despot is a sign of mainstream acceptance.
I doubt the financial numbers work if you're replacing a working system with a tankless system; the decision point is when you have to replace - - go with a new 50 gal tank (not 40) or go tankless.
Also, I was thinking how well a tankless unit would work when using hot water in short cycles, for example, washing up or rinsing a few dishes.
In any event, read Consumer Reports' report on tank heaters (I think 2004) to be an educated buyer.