Agreed. With the tankless coil, you absolutely cannot demand more water than what a shower requires (about 1.5 gallons per minute of 130°F. water). The coil can't deliver the hot water in excess of this rate. However, it's got nothing to do with the size of the pipes............and everything to do with the capacity of the coil and the furnace.

The supply lines to the DW, toilet, and sinks are all 3/8". The only 1/2" line is the washing machine and it doesn't flow at that rate through the very limiting stop valve.

Bedrooms don't affect hot water use.............bathrooms do.

The tankless is limited by volume. It cannot make unlimited hot water............and if you tried to run 3/4" lines without restriction, the water would barely be warm.

There's some insulation inside, between the actual tank and the sheet metal skin but it's not too thick.

I imagine testing has been done on just how effective those add on blankets are but I suspect they do at least some good and they can't be too expensive.

I install water heaters now and then so this is something I should know about. I found this site:

http://www.greenandsave.com/utility_savings/gas/hot_water_heater_blanket.html

and they say savings of about 10% can be reasonably expected. Oh well, every little bit helps.

I remodeled a guest house a couple of years ago that had been flooded during a serious rain. It was on a hill, practically in the woods. Behind the bathroom was a little closet for the water heater, several feet higher than the bathroom floor, as it was on the uphill side. Made it hard to access the heater. It was a gas unit - 50 gal., and they guy had been keeping it on 24/7 for about 15 years so he could have hot water for the 3 or 4 weeks out of the year that guests were staying over. He was a U Cal pyschology professor and utterly unschooled in the physical world.

The rats found this arrangement to their liking -- year round radiant heat floor on top of the thing, and they left a thick layer of calling cards. Oh lord, the smell. I talked him into getting rid of that one, which was looking pretty old, and I installed a ten gallon electric I found cheap on Craigslist. I put a 30 amp switch on the bathroom wall so they could easily turn it on and off for guests. Doing that with the gas unit would have been near unworkable, as lighting it in that small closet would have been a pain.

One of the few cases where an electric water heater could be operated more economically than a gas unit.

Tankless water heaters make 'sufficient' hot water as long as the flow rate demanded does not exceed their rated flow rate.

A Brian points out for a shower, 1.5 - 2 gpm and 130 degrees. If you try to put a shower and washer on the same heater, and run them both at the same time, your water temperature will drop.

You must install an individual heater at each device, or a really big honking heater sized for the combination of devices you want to operate simultaneously, such as dishwasher, shower and a sink or two.

Or, you can put in a tank to store the total gallons demanded by one cycle, which is how the typical "hot water heater" came about in the first place.

Or water pressure.

Agreed.

I'm assuming typical city water with 60-80 psi. If you're down around 30 psi, all bets are off.

I'll bet the problem is the new A/C. These high efficiency compressors draw lots more power on startup than the old units - once they're going, they draw less. If your AC unit is oversized for the house it will cycle on and off more often than a smaller unit (it will also not dehumidify as well) - this will show up on your bill.

My tankless uses less energy. It really draws some current when it's on, but has zero standby losses. If you have access and ability to run new wiring, then it's feasible, otherwise it will take a long time to pay for itself. My unit requires 3 runs of 3 conductor 6ga wire, on 3 separate 40amp breakers.

Just had a new house plumbed, in an area with some of the lowest electric rates in the country. As such, I was interested in an electric tankless - gas wasn't really an option for us.

The plumber was willing to install one, but strongly advised against it. Per him, the failure rate on electric tankless heaters, is sky high for every brand he's dealt with. And as you mention, they aren't cheap, and require significant wiring expenses. Just one guy's opinion...but he came highly recommended by many contractors in my area. Perhaps there are brands less prone to failure he's not dealt with.

His preference was a traditional 2 element unit, with a recirculation pump. It added a minimal amount to the plumbing cost, and like a tankless, we still get instant hot water even at the fixtures furthest from the water heater. With PEX plumbing contained inside of insulated walls, it's very efficient.

Based upon the initial purchase price and the extensive wiring involved, I was always of the same persuasion..........no way a tankless could ever pay for itself.

But, I'm having a hard time believing that the tenants need 500kwh per month to actually heat the hot water............

There have been any number of discussions here about water heaters. Pretty much all have come to the same conclusion; Electrics are expensive to buy and even more expensive to operate. Gas or butane/propane are the cheapest on both counts. Tankless gas is even cheaper to operate than tank type gas but are slightly more expensive to buy.

I have two Paloma tankless in my house. They are over 20 years old and require virtually no maintenance. If anyone is in the market for water heaters for either new construction or or replacement I would highly recommend looking into the Paloma brand tankless. They are all stainless and bronze construction. They are not cheap but over their lifetime they will definitely save you money. I am pretty sure that there are tax rebates for installation.

I have heard some people say bad stuff about the tankless heaters, the gas company guy who hooked up the house said he sees a lot of problems with them. But we have installed a bunch of them and don't hear any complaints. Even several years down the road.

The Rinnai's have a 10 year warranty, and thats about all you can expect out of a gas tank heater.

Everything in my area is gas, propane, or oil. Electric sucks, some condo's use them and they suck.

When I was running a tankless system (electric), I solved the usage issue. I had a presure regulator in the cold line supplying the heater (and the rest of the interior taps). I put a valve on the inlet side of the tankless heater and just throttled it down so you pretty much could only flow what it could heat. That part worked real well and you could sing the whole opera (even the "ring" series) in the shower without running out of hot water. I was saving about a dollar a day with the electric tankless. That's about 250 KWH per month.

As I mentioned I have had my two for 20 years and have put one $11 diaphragm in each. The construction of the Paloma, I think, is as good as you could ask for.

Oil is cheapest in my area. That's what heats my water and electricity keeps it hot. I don't know how it takes 500kwh to keep water hot, there's something else going on here. In colder months heat loss from the water heater goes into the house offsetting the cost of oil used for heat.