Hi,

Can you tell us in what part of the country you live? Here's why:

Hybrid units (heat pump) take heat from the surrounding air, "concentrates it" and uses that to heat the water. This works well if there is plenty of warm air around the unit that can be cooled (in the basement, garage, etc.) in a warm weather climate. It doesn't work well in cold weather climates where you are normally heating the area around the water heater.

In northern climates where you are heating the area around the water heater much of the year, what you are really doing with a hybrid unit is using the heat from the furnace to heat the air that in turn heats the water... not ideal. If you have a low efficiency furnace or use expensive fuel for the furnace, you will not have gained anything with the hybrid water heater.

Use a 92% tankless in northern climates and hybrid unit in southern climates. $3 a gallon sucks.

If you decide to go tankless, be sure to size it properly and that your gas supply lines are large enough.