Saltidog, Dude, chill. I was respectfully saying you had a different opinion - not what your opinion was or that it had anything to do with the heating elements. You can disagree without being disagreeable. I do understand thermodynamics very well, thank you. There is no "trend" and no misrepresentation. Yes, the units have resistive elements as backup, for high demand situations, and when the ambient temperature gets low enough that enough heat can't be extracted using the heat pump (for geospring unit that's 45 degrees F) Saltidog, I don't know what you are getting your panties in a bunch about... yes, I understand your heater works well for you. I would expect that. It's installed in a basement that's at least 700 cubic feet of space. Because it's underground it will maintain a temperature of around 50 - 55 degrees or more if there are other heat sources in the basement. That's enough to allow the heat pump to work just fine. The water heater will work in almost all situations / applications where one would normally install a tank heater. It will even run on the heat pump in most situations. The question is when you have the water heater in a fully conditioned space (not basement) and that space is being heated. At that time, one is shifting the heating load of the water heater to the furnace - which may or may not be more cost effective. I think the water heaters are great - esp if they can work out the reliability problems (which I think are teething pains, not inherent problems). I stick by my assertion that there are three applications whereby they produce the most system efficiency / cost effectiveness.

We installed a tankless hot water heater a couple of years ago when our old tank died. It cost more ($2200 maybe with the new gas vent, larger gas line, etc.), but it also has a few advantages. Smaller footprint literally and figuratively, constant hot water as long you want to stand in the shower, and lower utility bill (though not by THAT much). We are empty nesters, so it doesn't get a big workout very often...holidays and such. One disadvantage is the lack of experienced plumbers, even those listed on the company's website! The dealer that installed it went under with the building bust, and I had to pull up the product manual on my laptop and talk through it with the plumber who did my annual filter cleaning. (We have very hard water and I knew it needed cleaning, just didn't want to attempt to disassemble it myself....but I will now that WE learned how to do it.) In this economy, I'll bet more people are opting for saving $$ than going green on this appliance, since the payback time is considerable.

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.

As you require major work and a serious investment made to your home, I would forego the multiple system approach and install 1-integrated HP system that can do it all - and on ONE 200-amp entrance as well! Air-conditioning, heating, zoning, Domestic Hot Water (DHW) production. BTW: I would recommend keeping your existing base board heaters for emergency backup and just switching their breakers “OFF’. Times are changing - Think Water! SpacePak 'Cold Climate' Air-To-Water Heat Pump IMPO SR