As part of our in-progress remodel we replaced our big tank with a tankless. Putting the new heater under the stairs gave us enough extra space to turn a half bath into a full bath. The tankless heater is also able to handle one zone of a radiant floor, so we went ahead and put some of that in, too. Gee, I wonder why we're over budget?

It seems to work fine so far, although there's an electric ignition on ours (the actual heating is gas) and so we didn't have hot water during a recent power outage.

I considered a tankless when our water heater went kerflooey in a major way a couple of months back. Even though they would have made more on the tankless, both the emergency plumber and my regular plumber were of the opinion that tankless WHs weren't all that great for cold climates (I'm in NH) except for summer houses; the incoming water during the colder periods is just TOO cold, so it takes a LOT more energy to heat the water (negating the money-saving aspects) and if the incoming water is too cold, the water doesn't get quite as hot by the time it passes through the tankless unit so you may need booster heaters for washing machine, dishwasher, etc. and depending on how hot you like showers/baths you may not even get a really hot shower on cold days. They're fabulous for warmer regions but not so good for us. We went with another tank heater, if only because the colder it is the more I need to boil myself in the bathtub! :-) Do you need to have such a large tank heater or could you get away with a smaller one that has a good recovery rate (aka reheats faster)? We were going to bump up to a 50 gallon one but ended up with a 30 gallon with a better recovery rate than the old one - I can drain the thing filling my clawfoot tub and DH can take a steamy shower in about 20 minutes, while the old one took more like 45 to reheat.

Thanks for reminding me, redrange - I need to talk to the plumber about the heat for the kitchen (he handles forced-hot-water heating too) since we're going to lose the empty wall where the one baseboard rad is... wondering if we can tie a hydronic radiant retrofit (the tubing staples to the underside of the subfloor, with metal "fins" to conduct heat) into the current boiler while still keeping the HWBBs in the other rooms in the zone or if it would need its own dedicated WH, or whether we should just say t'ellwiddit and go electric. I'm so in love with the warm floors (which just have tile warming, not true radiant heating) in my bathroom that if we had the money we'd pull out all the HWBBs on the first floor and put in a radiant retrofit system... but that's so far out of budget it's not even funny.

I was swayed from tankless also. But didn't know it was an issue with living in cold climates as I have seen many installed in this environment. A search on GW formums for tankless has a number of posts discussing them before and after.

I've had a tankless in two houses and I live in New England, where it can get pretty darn cold. I've never had an issue with generating enough hot water in the winter months.

We're going with a tankless. We found two types of plumbing contractors when looking at HW tanks. There are those who haven't installed tankless and tell you they're not that good. Then there are those who have experience with them and like them IF you put in a system that will meet your needs. Tom

Wanted to get a tankless but it didn't work with our house configuration. We were limited to a small area where the "box" could be installed, and something about our stone and mud foundation and placement of a window, etc. didn't meet the installation requirements. We were told it's much easier to install tankless heaters in newer homes.

Our tank water heater was in the hallway, which we needed when we built a new bedroom, so we decided to go tankless. I live in San Diego and I have had no problems with it. It gets plenty hot enough and if you need to you can always buy an addition that will make the temp of the water hotter. My only complaint is it takes a little longer for the water to get hot. So, at night to wash my face, I brush my teeth, leave the hot water on for the entire 2 minutes and then it gets hot enough to wash my face.

We did a lot of research too. We went with a tankless that would allow us to run 2 appliances and a shower at once.

It was not hard to install either. Our plumber had installed many.

good luck in your decision.

Sdtriplets, which brand did you install? Tagkai? Bosch,Rinnai? Have heard both good & bad things about Rinnai & Tagkai. Thinking of getting a new Spa model Rinnai, that is new for 2007 for Master Bathrooms with Jacuzzi's it mounts on External wall & needs no chimney to operate. (Wife has to have her tub.. I am a shower person)
But have neen thinking of getting one in addition to the 40 gal electric water heater for the 1400 sq ft addition we are putting onto the home. Tankless will supply this spa area of MB and sinks and W/D laundry unit and sink. We are on a well water system. My plumber who will install it has 2 of them in his house.He has had no problems with his setup he is on a deep 500 ft well system for water supply. Who up here was saying that cold water systems don't work? My master plumber says I must have 1 inch galvanized propane line to supply LP gas to the unit. Looking forward to paying for hot water only when we use it !!
The Rinnai models have a battery backup so they do work during power outages.
What model, brand do you have?