fxdbdennis makes some good points; However, if money is limited, two tankless units would be expensive. I think the important thing is to understand what the goal is. For some people, unlimited hot water is the priority and they are willing to pay for expensive tankless unit(s)to get it. Some even add a recirculating pump that makes the hot water to the faucet almost instantaneous at the cost of significant standby losses. Other people are interested in energy savings (even if it doesn't make financial sense). Still others want a system that is economical over the life of the system -- be that tank or tankless. What I understand from windyhill_gardener is that they are looking for a way to not vent through the chimney-- something that can be accomplished with a powervent tank unit or a tankless unit. I also hear that they want to lower their utility bill, again something they could do with either type of unit-- with a small advantage to the tankless unit. I also got the sense that budget is somewhat of an issue since they have not replaced their old 80% or less furnace yet and that this is an older home where running a new gas supply is not likely. I am also guessing that they don't have major hot water uses (jacuzzi tub) since they have an existing 40 gal tank. If my assumptions are correct, my advice would be to go with the 50 gal powervent unit and put any additional money towards the furnace. This would provide a significant quantity of reliable hot water at a good efficiency while keeping installation costs reasonable and allowing for the elimination of the chimney. It's hard to justify spending an additional $1,000 -$1500 for a single tankless unit in order to save $50 a year on the gas bill when the furnace needs to be replaced. With all of that said, I want to be clear that I am not negative on tankless units. For some applications they are a good choice.

Ok, so I've read through most of the posts here but was unable to locate my problem. Just had an ECO Smart ECO27 electric tankless installed 2 days ago in the lower level of my tri-level, which is where the previous hot water tank was located. Every faucet except the upstairs bath tub produces hot water. When the upstairs tub tap is turned on the output pipe from the tankless unit goes cold. I tried running hot water in the kitchen, which it was hot, then turned on the upstairs tub tap and the water cooled off. Any help provided would be greatly appreciated.

Look, houndhandler, I have explained exactly how the gas tankless achieves the savings. I spelled it out in the four points above. The largest savings doesn't come from standby losses through the jacket, it comes from lower flue temps and not having the stanby losses through the center of the tank. As the electric tankless show, the standby loss just through the jacket is only about 3%. I showed you energy factors to support my case. I have told you where you can find the energy factors for the various equipment. The energy factors provide measurable unbiased information, unlike marketing hype. I have shown that an increase in the energy factor provides a measurable ~35% overall gain without cherry picking my numbers. The longer shower argument is bogus, but If they take longer showers then they are getting 35% more utility for the same money. Now, I have consistently given people real information that they can then use to assess their own situation. I also have the benefit of having actually installed and used one in my own home. You, on the other hand, want to spread inaccurate information and FUD. Gas tankless isn't right for every situation. It is particularly not good if you have long flue runs or have to upgrade the gas supply. It can be very good if the alternative is a powervent, direct vent, or if the tankless allows you to avoid some other cost-- such as lining a flue. In my situation, the payback over a standard water heater, without any other considerations (such as the fact that I couldn't use a standard water heater without lining the flue) the payback was just under five years. The truth is that if I didn't go tankless, I would have gone with a powervent unit to avoid lining the masonry chimney. A powevent unit was more than the tankless. My payback period did include a tax credit, but no utility credits. The payback will be shorter if gas prices increase in five years. And why would you say that you can't use a recirculating pump on a tankless? Of course you can. I think it's a better idea to design the plumbing so that you don't have the water heater at one end of the house and the master bath at the other... but that's beside the point. If water is expensive or you place a high value on "instant" hot water... use a pump. I also recommend insulated pipes and a dedicated return. I've suggested in other posts to combine a motion sensor in the room and a thermostat on the pipe. Inconspicuous 120 volt motion sensors that fit in a 2x3 box are cheap. Hey, you walk into the bathroom and the pump kicks on until the pipe is hot and then it goes off. It doesn't cost much, gives you the hot water you want, and very little in the way of standby losses. It might kick on some times when you don't need it.. . but no big deal. Other people just use a manual pushbutton switch that runs the pump for five minutes or so just when they want it. To answer Anthem, the reason I don't compare tankless to condensing tank heaters is because the condensing tank heaters I've seen cost 2x or more than a tankless for an energy factor of .89. (or an 7.2% gain over a tankless)I can't imagine a scenario where that would ever make sense, Can you? Note that I wasn't cherry picking to make my point... most of the standard gas water heaters have an EF of 58-62 with .62 being the "high efficiency". I used the Polaris 50 gal condensing heater for comparison, If you know of condensing tank units less than $3000 give me a link to it. If you can think of a design situation where it makes sense to spend $3000 on a water heater, please tell me what it is.

Tankless heaters have used as a marketing idea that they will increase efficiency by not having hot water sitting around in a tank all day not being used. It's an easy concept for consumers to grasp, but it's not true. On an electric heater, the difference in the energy factor is very small between a tank and a tankless heater. A tank heater will be in the area of 0.93 and a tankless might be 0.95 - not enough difference to talk about and certainly not enough to provide payback. That represents the amount of heat lost through the walls of a well insulated tank. With gas heaters it's different. The vast majority of the efficiency gain is in the lowered flue temps. Second is not having the heat loss through the center of the tank. For your situation, what you should know is that a properly installed and operating electric tank heater is extremely reliable and efficient. Get yours replaced or repaired and the TPV properly routed to the drain so that it doesn't cause damage. Since you have lost confidence in your heater, I would just replace it rather than repair. Make sure that you are addressing thermal expansion issues that might have caused the TPV to open. If you want more space, consider a stacking washer and dryer and eliminating the sink. The front loading LG's are full size (huge inside) stack and don't use much water - eliminating the overflowing washtub issue. That would be a cheaper way to get space than a tankless heater and they are great machines.