"This is probably a terrible idea, like many of mine are. Please tell me why."

Your idea will work just as you say. Here's why it isn't a good idea. It will not save energy. Your demand system operate's very effencently,you don't need to buy a secound system to only give the demand heater vacations. If the demand doesn't keep up,take a bath or laundry off it and add a secound heater that qulifies for credits. Spend money on somthing that will actually cut energy used in the home. What you propose is equivlent to spending $60k for two motor vehicles for use in business simply to be able to get more tax write off when one $30 vehicle forfills your transportation needs. If you think you have figured out an angle where you will recover all your cost plus some,your questions should be for CPAs and attorneys instaed of technical people.

What you are saying would work. I think it's overdoing it though.

What I would do instead is look at ways of saving hot water.

First, I would make sure all the pipes are insulated. Then I would look at lower-flow showerheads. Lastly I would buy front loader washer when it came that time (I've owned one for 6 years).

See if you actually run out of hot water.

Then, if you do on any kind of regular basis, invest in a second tank heater.

Thanks for the responses.

klem1 - I should probably clarify: This is basically a blank slate. We currently have an electric tank that should probably be replaced, and the water heater has to be moved anyway. So we do not have a demand system currently. To install a demand system that would be sufficient for the house (3 bath, kitchen, dishwasher) would probably require us to upgrade to a 300A electrical service.

Interesting you see it as "tank backs up the demand system" as I see it as the opposite! I am interested why you think it would not save energy. My thought would be to have the demand system set to say 5-10 degrees lower than the tank, so it would in theory not even turn on most of the time except to heat the water that cooled in the pipe between the two I suppose.

jake - Good point, might be a good idea to wait until a second heater is demonstrated to be needed.

Hi herg,i'm not against brain storming ideas as long as perticipants understand that's all that is happening. You seem to only present a riddle with moving targets. Around here that's known as pounding sand into rat holes amoung other bottomless indevors. It's obivous you will not be the one installing this,why don;t you ask those who will how best to handle it?

klem1, I apologize for offending you with my question.

Herg,

So let me be clear about something... you don't want to even think about whole house tankless. There is no savings for an electric tankless heater. The only appropriate application for an electric tankless is for limited Point Of Use

A hybrid / heat pump tank heater does save a significant amount of money and energy though.

Start with the hybrid. You may want to see if there's a larger hybrid tank heater out there. If you need additional hot water, add a second or add an electric tank heater that you can set the temp below your hybrid heater.

Herg,
It would work exactly as you said but it is not a great idea because I think it is an overkill. GE GeoSpring hybrid already has two 4.5 kW electric heaters built into it and together they equal to a medium size tankless water heater. The additional tankless would only be used when all that is not enough and that's not going to be very often. So, you would be installing a unit in your home that will kick in only very rarely.
I would get the heat pump water heater now and worry about an additional water heater only if you run out of hot water.
That said, using a medium size tankless as a point-of-use water heater can be an interesting idea. If you have more than one bathroom and one of them is far from where the main water heater is going to be installed, a point-of-use unit will let you get hot water much quicker and you will be saving some water.

jake - definitely do not want a whole house tankless. As I noted above that would require a new 300A service, plus we basically need the hybrid to get the required energy credits. And like you said, it wouldn't save any energy anyway.

tedred - Thanks for chiming in. Excellent points on that specific heater.

I think you guys are right, it is probably better to put in the hybrid and see if the other one is actually required before worrying about it. The other advantage to considering it now is we could run electrical to where the second WH would be located while the house is somewhat torn up. I guess maybe we could do that anyway.

Thank you for your responses!

A substantial investment in an efficient water heating system that is not necessary now, may never be used or only used intermittently would not be wise. If you need more hot water when visitors are there, an electric tank next to the heat pump water heater and piped so it can be used only when necessary would be the least expensive way to do. Shut it off at other times.