I put one in last year, and according to my kill-a-watt meter, we're paying less than $10 a month for hot water even at our summer electricity pricing, which is 22 cents/kw. That said, the heart of the technology is basically the same as a $99 window air-conditioner, and the new units are made in China - so who knows what the durability will be. I paid $699 shipped, but apparently, these units were selling for $499 before the tax credit was announced, and it looks like the price was recently jacked to $799... The quality seems decent, but it does have a "buzzy" sound when it's running that would be really annoying if you had it near a sleeping or living area. The install was super-easy for me - I used a new AOSmith 50-gallon electric water heater as the tank (I hooked up the power supply to the standard heater, but turned off the breaker, so I can use the standard elements if the Airtap fails) Would I do it again? - MEH..I dunno - playing around with the pricing to steal the tax credit seems kind of sleazy, the warranty is really ambiguous - to qualify for the tax credit they had to offer a five-year warranty I believe, but their website now says two years - the new integrated units from GE and Rheem have ten years of coverage, and they have the benefit of being able to use both the heat pump and standard electric elements to give you super-fast recovery if you have guests over, or a huge garden tub to fill. A quick Ebay search shows the competitors are around $1500~ish, but if you haven't taken the tax credit yet, you could snag $500 in government cheese and nullify the cost difference with a better warranty. The technology is an excellent idea, and when the competition drives pricing to where it really belongs - (Until then... meh... Certainly it can pencil out, but the energy-saving payoff exceeds the warranty which makes me nervous. Solar really isn't any better, and tankless seems to be snake-oil when you look for real savings data, but to each his own...

Vibrating or just humming? Humming could be caused by a jammed pump rotor from debris released in the line and now jamming the pump. Vibration is a little odder.

I agree with nigelsgarden that the recirc should work. Did you run a new line back to the hot water heater and feed the recirculated water back into the cold water inlet fitting on the heater? There are easy to install recirc pumps which use the cold water feed to the bath room as the return pipe. The problem here is that with the recirc pump running you won't have any cold water, because the cold water pipe will get packed full of hot water. Mark, if you saw anything discouraging feeding the mini hot tank with the hot water line it would have been to avoid the following situation": 1-You start showering, and the tank gives you nice hot water right away. 2-The nice hot water you use from the tank is replaced by the cold water in the 50 feet of pipe from the hot water heater to the bathroom. 3-As the limited supply of hot water in the mini hot tank starts to become exhausted, the shower will begin to cool down, because the cold purge water is filling the mini hot tank. 4-The shower probably won't go completely cold, because when the pipe purge is done, there will be hot water from the big hot water heater filling the mini hot tank, and the outlet temperature will rise again, until the temp at the shower equals the output form the main hot water heater. If you like to sing in the shower, the cold phase might give your voice a nice operatic vibrato (caused by shivvering) and the arrival of the very hot water can help you with a couple of high notes till you get everything regulated.

Ok, so you have two problems. One is a business problem and one is a mechanical problem. Here's how I would do this: Your dealings with the installation company need to be in writing going forward. It can be e-mail, or paper and ink. If you have a phone conversation document who you talked to, what was said and when. I would provide them payment for everything but the water heater and minus the rebates. Tell them in writing that you are providing payment for the items that are operating properly. Tell them if you receive the rebate documents in time to submit them, you will pay them that amount. Likewise, when the water heater is fixed you will pay that amount as well. By doing this you will establish that you are working in good faith, that you have paid for work that was properly done, and that you aren't being unreasonable. You can also make it very clear that if they don't provide the rebate documentation in time, you will deduct it from the amount owed. As for the water heater - you can expect a little variation in temperature but what you are getting is clearly excessive. The folks you purchased this from (I'm assuming the installation company) is responsible for making this right. If they were smart, they would install the tempering valve and be done with it. I agree with you - they have attempted a fix on this water heater twice now and it's not fixed. They need to replace it with something else and / or install a mixing valve without additional charge. That's not great for them, but it's a completely reasonable solution. Any negotiations with State needs to be on them -- not you. I would give them a deadline by which you want all of this resolved. The water heater, the rebates, all of it. I would say that you want it done no later than 12/26 so that you have a few business days to complete the rebate paperwork. If it's not completely resolved by that time you will hire a different plumber to replace the water heater. By paying for the work that was properly done, clearly communicating reasonable deadlines and expectations, and doing this in writing, you are preparing yourself for a small claims court case. That will be much more expensive for them than installing a mixing valve.