We routinely recommend against tankless units for a very different reason. We have lots of wells here in Nuevo Mexico, and our water is typically hard. Tankless units by necessity have small passages for water that must be heated rapidly. They're technically more complex, and they clog up in ways ordinary tanks don't. They're also expensive to fix. My solar engineer guru made a good living in the eighties repairing a) solar heating systems from the excessive-tax-credit days, and b) tankless water heaters. He says the added up-front cost and added maintenance/repair costs and added headaches are seldom made up by fuel savings from higher fuel efficiencies.
 
Allan at Pos Energy
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