Are you all electric? B/C NG water heaters are pretty cheap to run and I tend to agree with Brickeyee. If you want greater efficiency, then tankless is probably next. If you are all electric, then solar is the way to go (IMO). I paid about $6k and got about $5k back - from Fed/state/utility. Hard to argue with that math. I think I paid $2 last month for backup heat - and we have a recirc pump/loop which really adds up the heat loss. Heat pumps move heat around. A hot water heater (HP) will cool the area the hot water heater is in. If you live in Florida, this can be a win/win. But if you ever have to turn around and heat the space, you are doing double duty. It is rarely a good idea to do double duty. They are a fairly new thing (at least in #s), so reviews are scant. There is more talk on the HVAC forum.

Actually for high efficiency air conditioning systems the de-superheaters don't offer a whole lot. There just is not sufficient delta t left to heat water with since the compressor discharge temp is so close to ambient air temp. For the comparable costs, the hp water heater may have much higher payback. They also work with spas where the heat recovery unit will not.

There will be two issues with putting the GE in there: 1-) Constant humming at 55 dB is more than enough to be major disturbance if it is the kind of place you are planning to do office work. Besides, 55 dB is the quitest possible rate that was measured by the manufacturer so it can turn out to be lauder than that because of the different conditions it has to work in or because it gets old and inefficient in years. You must not have a hybrid water heater in a place where you want peace and quiet. 2-) Even with the lauvered door, it is going to suck heat from the room and make it cool and dry in there. If it is a room that needs heating, putting the water heater in there is kind of defeats the purpose. In most cases, it is best to put a hybrid in a room where it will be alone and free to make whatever noise and cool the place.

Assuming California ballpark utility rates of $1.25 per therm and 15.34 cents per kwh, a 3.7 UEF Heat Pump Water Heater is cheaper to operate, than any available gas model. I agree there are many situations that call for tankless gas but for most new construction, HPWH is now best choice. New designs can account for space requirements. Cold climates are the toughest fit, but think a good case can be made for them when incorporated into design. For existing replacements in temperate garages, large utility rooms and basements, HPWH should be the first choice. Just make sure the space matches the headroom and volume requirements. Some don't seem to make a distinction between high efficiency gas models that have fairly safe combustion venting and cheap gas models that are atmospherically or naturally vented. The only safe place for atmospherically vented models is strictly outside of the building envelope. Backdrafting so regularly, they should be illegal inside a home and someday will be. We do combustion appliances for clients that want them but will not do natural vented gas models inside the building envelope. They are a serious liability whether the home is tight or leaky. 30 years NG transition seems about right but that's for utility scale generation. Burning it inside residential homes adds too much unnecessary risk. The backdrafting issues are not compatible with efficient construction. Especially now that heat pumps are cheaper to heat with than NG in most utility markets. ETA: I appear to be way off with current ballpark CA utility pricing. At 19 cents per kwh and $1 per therm, NG is cheaper to operate assuming high efficiency units. Sorry CA! That's ignoring monthly utility fees and reduced cooling loads which if included, could make HPWH the better investment. Agree with David that NG is artificially low there compared to electric and is likely to change soon. ETA 2: Digging deeper into average CA prices, 1.25 per therm may not be too far off. Lots of regional and yearly variances in that state. In San Fran's current market, the Prestige beats NG but in San Diego it does not. Let's just say it's competitive there, for now.. :)