Fred derf fred: I too was set on going tankless - till i saw the upcharge. It is coming to about $5,750 more to go with (4) gas tankless (Rinnai 94LS 9.4gpm top of the line) compared to State gas water heaters - as spec'd in the drawings of our house. I did research and found out that gas tankless do have an EF (efficiency rating) of .82, however GAS (i believe you compared electric tank) tank heaters commonly have .62, and a few have .68 efficiency. This results in savings of tankless is about $250 per year, for all 4 units combined. So it would take me more than 20 years to recoup the cost difference. This was based on a formula as provided by the dept. of energy. Additionally, State, who sells both, has a 'calculator' on their website that corraborated the results. Also, please note that your existing ELECTRIC tank heater was very OLD. New, gas models are much more efficient so I do not think it is a fair comparison. I am no expert, but these are my findings. I would greatly appreciate any other comments ASAP as we are about to make the decision on going tank or tankless

If you go with any sort of solar system, make sure it has a gas backup and not electric. My energy costs went up $100/month when I added our solar system down here in San Diego. I am now getting it corrected with the installation of a small gas tankless unit, using the solar storage system as a pre-heater. If you're building the home then many of the traditional drawbacks of tankless don't apply to you. You can build in the correct gas line and venting from the start. If I were in your shoes I'd probably go tankless (30 percent tax credit this year -- see the stimulus law or visit www.energystar.gov). If a single unit won't handle your demand then get two. And plumb it with the small tank system (10 gallon) for recirculation and to overcome any sandwich problems. This approach has been detailed in this forum somewhere.

dan i have two rinnai LP gas units that are ganged together in series. the two digital controllers are linked and when i set the control on one unit, the other automatically updates. the only negative i have with the rinnai's is that the controller can only adjust temps in increments of 5 degrees - i wish it was in 1 degree increments. for us, it was more efficient to have two small units installed rather than 1 large one. this was done for efficiency - most of the time we only need one unit running but there are cases where the second will kick in. gas tankless is great and the rinnai's look to be well built. 3200 sounds very high to me. I don't know the exact dollar number for ours , but the 2 rinnai's we had cost us an additional 1200 dollars over what a hot water tank would have cost (we just paid for the upgrade). my guess is that a hot water tank installed would run around 800 dollars max - so I am having a hard time seeing where the 3200 price tag came from. is there is a lot of plumbing and venting work required to install your unit? i do know that the ducts for the tankless units are very expensive, so if you have a long run for the vent - that might be where the extra cost is.

"A 3/4" pipe that's 50' long will take about 2.5 minutes at 2 gpm to move the cold water out of the pipes." This is not mathematically correct: The volume of water in 50' lineal of 3/4" pipe is about 1 gallon. Does the water heater ever display error codes or have to be reset? A faulty ignitor or sensor could be responsible for the OP's complaint of high gas bills. My tankless water heater had this problem (or rather symptom) for a while. I noticed something funny when I was on the roof replacing shingles and got a big whiff of gas coming out of the exhaust flue. Someone inside was running the hot water and the heater was trying to cycle on, but the gas was just blowing right through. We had been experiencing problems with the unit not heating up promptly, or heating for about 5 seconds and then going out. Sometimes the heater would trip and send an error code, requiring a manual reset. This smell of gas on the roof got me thinking maybe the heater is having trouble igniting? Luckily the guy helping me with the shingles was not a smoker, or i may have discovered the problem under different circumstances. After extensive troubleshooting, it turned out the main burner was partially clogged with dust. The dust was mostly accumulated around the sides of the burner, where the sensor and ignitors are. The heat from the flame was not getting to the sensor, especially when the burner was running at low or moderate flame. Only high flame created fire wide enough for the sensor to detect. The dust had also partially obstructed the ignitor sparks from the flow of gas, resulting in the smell I noticed on the roof. The symptoms were caused by the heater's safety override feature. If the sensor does not detect flame after several seconds of delivering gas, it kills the ignition and starts over. Same thing if the spark does not ignite the gas. My gas bill skyrocketed during this episode, even though it was summertime. I mean we had like a $100 gas bill in September when $20 is normal. I fixed the problems with the heater, took it apart and blew out all the dust. I installed an intake vent to draw fresh air directly into the unit without mixing in garage dust. Then I put a 5 gallon electric heater in line directly after the tankless. I keep the electric unit turned down to 110, and the tankless turned up to 130. This keeps filling the small tank with 130 deg water. The comfort factor is 100%. There is no shot of cold in the hot water line when you turn a faucet off and back on. For my small house, the one small tank right next to the tankless is perfect. There is about 50' of run to reach the master bath, but no problem. Hot arrives in about 30 seconds if the pipe is dead cold, and that is at a flow of 2 GPM.