We have two Rinnai water heaters that use propane/natural gas. Both provide plenty of hot water and of course they will do so continually. My only minor issue has been the controller. This small device allows you to adjust the temperature from 108 to 120 degrees. We like ours on 120, but in a power outage they default back to 108... If your controller is in an awkward spot, this can be an issue if you have frequent power outages since you will need to reset it if you like the higher temperatures.

We are going to replace our last hot water tank with a third Rinnai when we do a major remodel this summer, so I guess that speaks volumes for what we think of this technology.

Good luck!

This topic has been covered A LOT on the Plumbing Forum. Do a search on that Forum for "gas tankless heater" and you will be reading threads for hours. But in the meanwhile, I'll give you a little summary: the top manufacturer is Rinnai, with pricing to match. There are other good tankless manufacturers also, you'll see them discussed on the Plumbing Forum.

Here are pros and cons of tankless:

Cons:
- you will need to install a larger gas line
- you will need to install special venting specific to a tankless
- you will need to make sure that whoever installs it, REALLY knows what they are doing. A lot of people are saying they can install them, but don't really have the expertise. Rinnai requires its installers to go through a training program.
- upfront costs to purchase and install a tankless are significantly higher than traditional tank.
- it is important to know what climate you live in for this decision. If a cold climate, your incoming water temperature in winter (about 40 degrees for me) will require a significant amount of gas to heat the water "instantly". If you live in a mild climate, this is not an issue. Some argue that a tank heater, meanwhile, is heating the water 24/7 which is a waste. However, today the tanks are so well-insulated and efficient, this is not as much of an issue.

Pros:
- very small footprint.
- Endless hot water. You will not run out of hot water the way you might with a tank heater. For many people, this pro outweighs ALL the above-listed cons.

Here is a link that might be useful: Gardenweb's Plumbing Forum

I live in New England, where labor is expensive as well. Won't the 'larger gas' line add several hundred to the project? (making the total like 2-3K?)

I think I'll pass, maybe I need a bigger tank, or just a 2nd tank?

THanks
/j

can't i add something to my current water heater (even something that runs off electric) that raises the output 20DegF?

Jake here from the plumbing forum. I wanted to see what advice you got.

shannonplus2 got most of it right. However, I would add the following:

You ~may~ have to increase the gas service. That's not a given at all. Call your gas supplier and find out. Tell them you are considering a tankless unit between 200k and 230k btu input (this is about the largest of the residential units). See what they say.

The special venting can be prohibitively expensive or downright cheap. The good news is that you can side-vent these units. My vent is about 2 feet total.

These units save about 35% in operating costs over a well insulated standard gas tank. (compare energy factors if you don't believe me) They also have a $300 tax credit. If you can do the installation inexpensively, it will pay for itself in about 5 years or so.

If tankless won't work for you, consider a 50 or 75 gal. Also pay attention to the BTU input and first hour rating.

thanks - this has been an unusually informative thread so far 8-)
I heard that the 75g tanks were more expensive than twinning my 40g - not too concered about BTU/1st hour as this isn't really a recovery issue... we tend to use all at once and then
not for a while...

thanks!
/j