You might be able to get a better quote on the furnace and A/C. I understand that you can only get an 80% furnace, but in that case you should consider getting the highest efficiency single stage A/C for that kind of money. I wouldn't invest in a tankless water heater at that price. Why not just a regular gas water heater or one that condenses and vents thru the side of the house with a pvc pipe? By the way, how much is your electricity? You may want to consider getting a heatpump which typically doesn't cost more than the same model A/C. The time to do something like this is when replacing the A/C.

Guys if you read the post, the reason the tank water heater was so expensive was due to the construction required to get his house up to code. I personally like my tank heater. If your changing from a tank to tankless there is alot of work to do. Moving water lines, moving gas lines (possibly upgrading gas line size too) and running a new intake/exhaust if using gas, upgrading the main service amps if using electric. Some things to consider Tank Heater Pros Costs less to replace in the future Easier to maintain (Tank water heaters are easy to flush out every year) Easier to install (dont have to upgrade gas line or main service amps) Gas water heater will still operate in power outage (electric will still have some hot water to use for a while till power kicks back on). Cons Not as efficient as tankless No Tax Credits Hot water limited by FHR (first hour rating) Tankless Heater Pros Unlimited hot water More efficient Saves space Cons Will cost more in the future to replace (there is no guarantee the tankless will last longer than a tank version, the heat exchanger can go bad and that is the most expensive part of the tankless) , Harder to maintain (you need to try to clean those tankless heaters out every year with a descaler so they stay working efficiently) Harder to install (upgrade gas line or main service amps) Tankless heaters have a limited throughoutput. While it is unlimited hot water, it can only supply so many gallons of hot water at a time Will not operate in a power outage. A tankless water heater is controlled by electronics whether the heater is gas or electric does not matter. Requires minimum gallons per minute from city water supply, some people have not been able to install due to that problem. Consumer reports note that users complain of inconsistant water temperatures. http://www.consumerreports.org/cro/appliances/heating-cooling-and-air/water-heaters/tankless-water-heaters/overview/tankless-water-heaters-ov.htm Another good site to look at: http://www.waterheaterrescue.com/pages/WHRpages/English/Longevity/tankless-water-heaters.html

I installed a tankless 6 years ago and will never install a tank again. I did it myself and will do it again if I am ever in a new house. I have a 120k Noritz unit that performs flawlessly. I just don't get it guys. Installing a tankless without recirc is like trying to start your car with a half dead battery. Really! "Your builder is right, it defeats the purpose of tankless" nonsense! I did not have recirc initially. I learned by experience you do not just replace a tank with a tankless. It is a bad result for hot water supply. Slow and inconsistent. Internal recirculation tanks might help but never having used one I have no opinion. But unless you circulate water and insulate your pipes to maintain the heat you are really missing the boat. Recirculating inside the heater means your pipes are cold and it takes longer to get to a tap because unlike a tank there is no pressure in the lines to radiate towards the taps. Why store water inside your heater when you need the heat in the pipes for faster delivery? That is just a limited solution to the issue in my opinion. How much does it cost to keep the lines hot. Depends on heat loss and vol. of water in the lines. Insulate!!! I would say my pipes take very little in cost to keep hot. Maybe $5-7 a month. I used 3/4 inch pipe for recirculation to store more water for start up and to feed 110 degree water into the heater. I do not have a timer to shut off recirculation at night so I could save a few bucks if I did that. Its a simple thing to lay out. You go to the last tap in the system and put a return to the heater from there. You need to have a cold water supply for the recirculation. A one way check valve between the recirc and the street supply prevents hot water from pumping back to the street as hot water pressure rises. A second check valve goes between the last tap and where the street supply feeds the recirc line to prevent cold water pressure from the street from back flowing through the hot water lines. Why any builder would not just put a return line back to the heater is beyond me. Its really not a lot of extra work. Especially with all the cheap Pex being used now. A small grundfos 1/25th hp pump is all that is needed in most cases. I use a Honeywell aquastat to trigger the pump. The pump engages maybe once an hour for maybe a minute to raise the water temp from 105 to 110. Heat loss? Did you insulate the pipes you say are losing heat from? You can lnstall a timer to turn off recirc in the night so you use no energy at all. You can do the same during the day when you are not at home. For some families you could have a daily timer that changes recirc to match your schedule. The hot water works with the recirc off, it just does not work properly as iz well known. Tankless is a superior technology. I did not think the endless supply would matter to me, its noticeably better. A tank cools as soon as you start using water out of the tank and cold water replaces it. The temp drops and drops the longer it flows. A tankless heats water on demand and it is maintained at the same temp. Its really is an advantage. But, as has been stated here by users, un managed hot water supply sucks and who cares if it costs a little bit of money to heat and pressurize your pipes so hot water is instant. Its way less expense than keeping 40 gallons of water hot in a tank. I would never heed the advice by someone on this thread that you don't need recirc. Have your builder install a true full house recirculation system. Don't pay attention to this "you don't need it stuff." If the builder balks or talks down to the idea get someone who knows what they are doing to come install it and over ride their obstinate attitude. Just do not listen to the talk of having a better system is not needed. You are going to great expense to have the best hot water supply you can have. Don't let someone with out your best interests in mind wreck your enjoyment of a great tankless system. Recirc all the way!!! Gee people, why would anyone not do this in new construction when its way easier to do.

Funny to be accused of evangelism by poster that incited an "Amen", a few posts up :) Always appreciate feedback and constantly working on preachiness of writing style. I think including links or reading opines without sourcing helps others decide on misleading comments. It looks like Stiebel updated their Accelera HPWH to include an electronic control screen since we bought one a couple years ago for parents house. After an updated check on reviews I still feel safer with Accelera but it's hard without knowing volume of units sold. Surely Rheem has sold more HPWH than Stiebel at this point, despite Accelera being around longer. Reliability is a compelling reason to go with Rheem Marathon an electric resistance tank. Best warranty and most well-reviewed water heater available. Tank size plays a role here too. Bigger tank means better hot water performance, with minor hit in efficiency. The bigger the tank, the better for grid storage and demand control. Demand control has been around a long time with the most basic strategy using a timer and time-of-use billing options through utility. Studies will continue forever on more advanced grid-smart water heating technology but at this point, it's a time-tested technique with this smart water heater article quoting up to one million in use already with potential savings for homeowners and grid. Another article from same site points to irony of battle between grid storage potential of simple electric resistance tanks and the efficiency of heat pump water heaters. In that first article the Hidden Battery link seemed misdirected but it was put out by the NRDC pointing to potential of electric tanks to reduce the need of new power plants and grid storage for renewables. Large, reliable electric resistance tanks are becoming more of an asset while gas is becoming more of a liability. I think most of this forum's posts could be described as meaningless or feel-good-only but definitely not water heating. It has large environmental and social consequences. It's one of the only home purchases capable of beating the stock market for returns on investment. I think the ROI currently lies with HPWH but the second best choice could easily be a good ole electric tank. If an electric utility offers good incentives, electric tanks like the Marathon, could beat tankless gas or HPWH in total lifetime costs including repairs and replacement. A home equipped with PV panels and Marathon tank could also be in the running as best long-term water heating investment.