Tankless propane vs tank style propane heater. the newer propane and natural gas tank waterheaters are required to be equipped with safety components which has driven the price of gas-fired tank style heaters up in the past couple of years. List prices around $800 for a 40 gallon good for a family of 2-3. Tankless already have the safeties in place and list for $1200 for the unit. If an "average" family of 3 uses 30 gallons of gas a month thru a 70% efficient tank style , the tankless at 84% efficiency would use 24.9 gallon of gas per month. At $2.50 per gallon of LP the savings per month would be $9.75. In 41 months the savings has paid the difference. The warranty for the tank is 6 years, the tankless exchanger is 12 years. The savings over an electric tank is vastly greater. If you burn Natural Gas, the cost to operate is even less. I hope all this helps. I have installed Rinnai, Bosch/Aquastar, Tagaki, Thermar, Saunier-Duval, Paloma tankless and Bradford-White, State, Rheem/Ruud, American, Master Mechanic, Sears tank style waterheaters for over 20 years. Rinnai excels over all the others. The vent is simple and the only caution is against a high mineral/lime content in the water. And the factory support is the best in the industry.

Kinda late looking at this, but hit the below energystar.gov website for gas storage tanks. I'm spoiled on tankless, but not everyone is. Here is a link that might be useful: Water Heater, High Efficiency Gas Storage

If you're really sure you want tankless (and you kinda seem to be), I'm not going to argue with you. I'll just say a couple of things and then I'll bow out. Disclaimer: I'm not an expert on these matters. They just interest me and I hope to be more energy independent in the future, so I read up on them. I always welcome corrections from knowledgeable folk. First point: IMO electric resistive heating of ANY kind basically just doesn't play nice with PV, off grid or on. The only time it really makes sense is when you're off grid and your system produces more energy during the day than you can store in your battery. This can also apply to some extent if you're intertied and your utility pays you wholesale or less when you sell your power, essentially penalizing you for conserving. Either way, dumping your excess PV energy into water heaters is one way to store it for later use. However, it should be obvious that to store that energy, you have to use traditional storage water heaters, not tankless. Second point: Peak demand matters. It matters to your electric utility, and it matters to your bill. You probably know more about CA rates than I do, but it appears to me that right now California is more into time of use (TOU) metering than peak demand metering. However, more and more utilities are adopting peak demand metering for residential customers (they've had it for business for ages). So even if you're not dealing with it now, it may well be in your future. Demand based metering watches your power (not just energy) usage. The higher it is, the more you pay for all your electricity. In one demand scheme, you pay a surcharge based on your peak power usage (in kilowatts), In another, the price they charge you for every kilowatt hour you use depends on your peak usage -- the higher your peak, even if it's only once in the month, the more you pay per kWh that month. Let me give you an example of the second scheme. Let's say your house's big energy hog right now is an electric range.. Most of the time, you just use one or two surface units at a time. So your peak demand is relatively low, and you pay (say) 14 cents per kWh most months. But when you cook Thanksgiving dinner, you have all the surface units going, plus the oven, and a microwave. On that one day, you have a much higher peak demand. Your utility takes note. And that month, you pay 20 cents per kWh for EVERY kWh you use all month. So even though that month's usage is only a little higher than usual, the final bill for the month is MUCH higher. Now imagine what could happen to your bill if you add an appliance that increases your peak demand every day of every month. Guess what: when it comes to peak demand, tankless electric water heaters are MONSTERS. Think about it. With its mild climate, California is a great place for heat pump storage water heaters. That's what I'd get if I were you. Not tankless, and definitely not electric tankless. And that's all I have to say about that.

First off let me say that is an insane amount of water, for a residential setting. Really insane for California where there is a shortage of the resource to begin with. It is an interesting idea though. I know nothing about this kind of setup. There are only two people in my home and we get along fine with 40 Gallons of water in a tank with plenty to spare. When the kids were here though we could see issues if everyone decided they wanted to shower at the same time as we do have 3 bathrooms. If I were going to attack this idea, I would put the tankless after tank. In this way (at least in theory) the tankless would only operate at full capacity once the water in the tank was exhausted? Or as the water began to cool the tankless would ramp up. That theory based on how hot the water is flowing into the tankless and whether or not the tankless would operate at a lower setting or not at all if hot water was already flowing through it. I don't know the answer to either one of those questions. As far as those rain shower heads, not a fan. I have a family member who has one, not the best shower experience I have had. To each his/her own though.