After ours was installed I stumbled across a company that makes an all in one unit called Eternal Hybrid (link below). You may want to contact them and see about getting the energy efficiency specs to go that route. I think Navien also makes an all in one system now too. I would think either company would be able to give you more accurate energy specs and better answer your question. The other thing to keep in mind is that without the loop (& pump), you are in effect wasting gallons of water waiting for the hot to kick in--think showers, sinks, etc. How much does the water wastage cost in terms of both water & sewer bills + the unnecessary waste of a resource? In addition to washing machines not pulling enough water through at a time to trigger the heater and then remain on long enough to actually get the water down the line to the machine, some dishwashers are having problems too. Here is a link that might be useful: Eternal Hybrid Hot Water Heater Site

You want to do a few things with locating your heater: 1. locate it so that it can be vented in an approved way (you can't locate the vent too close to windows, doors, etc.) 2. Locate it so that the vent run is short as possible (a few feet is good) if that's not possible, consider a condensing unit that vents with PVC. Stainless Steel venting is VERY expensive. A condensing unit adds several hundred dollars but can be cheaper than a long run of SS vent 3. Locate the heater close to where the water is being used. I was able to locate my heater 20' closer to the bathroom than it was. You can't vent the tankless through an existing flue and you sure can't vent it into a shed. Why can't you vent it to the sidewall? How close is the neighbor's house? You want to mount the unit inside unless you have really mild winters. For mild winter areas they have external installed units. Both interior and exterior have freeze protection, but that should be a fallback protection system. Here is a link that might be useful: See Pg 12 for venting locations

There is a LOT of disinformation on these forums about on-demand tankless units, ESPECIALLY the electric units. First, energy cost savings is NOT a reason in itself to make the switch. No reason alone is sufficient. It is the total package, in light of your particular lifestyle, that will dictate the pro-con outcome of the decision making process. First, tankless units save space -- a lot of it, especially electric units that do not need to be vented. In Texas we have no basements, so that can be an important issue. Second, an electric unit is unlikely to blow up, unlike anything using natural gas. Third, there is an endless supply of hot water, which in a successive-morning-shower household like mine, is a really important issue. And finally, yes there is some documented comp fuel savings (electric tankless over electric tanks, or gas over gas), that is really offset by the added initial cost of the unit plus upgraded electrical service or gas supply line sizing. Moreover, there ARE full-house electric units out there that provide plenty of water, unless you plan on taking two showers simultaneously while also doing your laundry and running the dishwasher! And if that's your bag, you can run 2 or more electicals together. Or get a really big gas unit. Bottom line, nearly every nay-sayer of tankless units ignore the pros and focus on a single con - cost, cost, cost. Well, we all don't drive a Ford Focus for a reason. Some of us enjoy our Buicks, Porsches or Camrys even though another car would get us from point A to point B cheaper while using less fuel etc etc etc. Full disclosure: I have a Steibel Eltron Tempra 36 whole-house electric unit. Love it. My electric bill went up nary at all.

Wow, thanks for all the good input. I didn't intend it to become a debate about solar, but found that interesting as well. I'm not familiar with the lease program that is mentioned. I'm looking to have an array installed that will be owned completely by me. I can get a 20kw system installed for about $60,000. There is a new Duke Energy program offering $1 rebate for each kw installed, so subtract $20,000. Then there are 55% state and federal tax credits, reducing the investment further to $18,000. The system should generate about $2,500 in energy per year (assuming 9 cents per kwh), resulting in about a 7 year payback. There is also potentially a benefit I can derive from depreciating the asset, but am not sure that is allowed, so need to check with my tax expert. I think the main different between now and before is the $1 Duke rebate. Without that, I agree the payback period would be too long (about 11 years), but a 7 year payback seems reasonable to me. There is always the possibility of repair costs in the first 7 years which could lengthen the period a bit, but the warranties on the panels at least are much longer than that. In any case, I think it is a worth a try. With regard to the water heater question, I agree that two heat pump units might be too many, as the one in the basement might be idle for long times, so am not considering doing 1 heat pump (for the upstairs which will get used daily, but shouldn't use more than 80 gallons per hour as there is only 1 shower), and then a gas powered tankless for the basement. We have natural gas that will be already piped to the house for the stove/grille. Any other thoughts or suggestions are welcome, thanks for the lively debate!