Gray area. Since it didn't do this from the day it was installed, it is unlikely that it is actually wired wrong. Therefore, a component has failed (I'm guessing top heating element as shorted internally). It's two screws, two wires, and a big nut. Either is qualified to find the problem and replace it, but the plumber is more likely to already have a replacement in stock, so I personally would aim this at the plumber. Re-reading your original post, it's 7 months old, there's probably a warranty, so call back whoever installed it (most likely a plumber).

If you want to control two hot water heaters with the one timer in order to avoid having to keep two clocks in synch, you might be able to use a relay ("definite purpose contactor"), such as a Cutler-Hammer C25BNB230B. You'd connect the load feeds of the timer to one hot water heater as well as to the control input terminals of the relay. The second circuit (for the second hot water heater) would get switched simultaneously with the first. Make sure that the relay is designed to accept 240V control input. Done on a DIY basis, the parts-and-materials cost should be something in the neighborhood of $40, which makes it roughly comparable to adding a second timer. (You'll also need a box--say "6"x"6"x"6"--for the device.) One disadvantage is that the relay will draw a slight amount of current whenever the timer switch is on.

Mallory, it seems that it's in everyone's best interests to keep the extra heater. You can always shut one off and you have a free backup, so long as it was free. The labor to remove it, should be motivation for the builder to leave it for you. It's got a vent sure, but it's still an atmospherically vented appliance that puts indoor air quality at risk. They really need to make those things illegal. You probably have little control in keeping your garage air separate from your house air at this point but it's something to be aware of. You could possibly do more to seal the mud sill of attached walls and be aware of the need to keep the garage-to-house door closed and keep the weather stripping fresh. For readers and posters perpetuating the myth that tankless (on-demand) water heaters save money, scientific studies have found otherwise. Heat pump water heaters are where it's at, especially in hot, humid climates or even cold climates when basements and tall crawlspaces are involved.

If you're really sure you want tankless (and you kinda seem to be), I'm not going to argue with you. I'll just say a couple of things and then I'll bow out. Disclaimer: I'm not an expert on these matters. They just interest me and I hope to be more energy independent in the future, so I read up on them. I always welcome corrections from knowledgeable folk. First point: IMO electric resistive heating of ANY kind basically just doesn't play nice with PV, off grid or on. The only time it really makes sense is when you're off grid and your system produces more energy during the day than you can store in your battery. This can also apply to some extent if you're intertied and your utility pays you wholesale or less when you sell your power, essentially penalizing you for conserving. Either way, dumping your excess PV energy into water heaters is one way to store it for later use. However, it should be obvious that to store that energy, you have to use traditional storage water heaters, not tankless. Second point: Peak demand matters. It matters to your electric utility, and it matters to your bill. You probably know more about CA rates than I do, but it appears to me that right now California is more into time of use (TOU) metering than peak demand metering. However, more and more utilities are adopting peak demand metering for residential customers (they've had it for business for ages). So even if you're not dealing with it now, it may well be in your future. Demand based metering watches your power (not just energy) usage. The higher it is, the more you pay for all your electricity. In one demand scheme, you pay a surcharge based on your peak power usage (in kilowatts), In another, the price they charge you for every kilowatt hour you use depends on your peak usage -- the higher your peak, even if it's only once in the month, the more you pay per kWh that month. Let me give you an example of the second scheme. Let's say your house's big energy hog right now is an electric range.. Most of the time, you just use one or two surface units at a time. So your peak demand is relatively low, and you pay (say) 14 cents per kWh most months. But when you cook Thanksgiving dinner, you have all the surface units going, plus the oven, and a microwave. On that one day, you have a much higher peak demand. Your utility takes note. And that month, you pay 20 cents per kWh for EVERY kWh you use all month. So even though that month's usage is only a little higher than usual, the final bill for the month is MUCH higher. Now imagine what could happen to your bill if you add an appliance that increases your peak demand every day of every month. Guess what: when it comes to peak demand, tankless electric water heaters are MONSTERS. Think about it. With its mild climate, California is a great place for heat pump storage water heaters. That's what I'd get if I were you. Not tankless, and definitely not electric tankless. And that's all I have to say about that.