Americans waste a tremendous amount of hot water. That's why we can sell active solar hot water systems with two to three 4' x 10' flat plate thermal collectors and a 120 gallon solar storage tank in this country to individual families - for $5,00 to $6,00 installed!
If you have natural gas or propane on the property, they are still less expensive for heating of all types, including hot water. The ad for the electric tankless heaters at the beginning of this post don't mention that a 6 gpm electric tankless water heater requires two (yes, double runs) 40 amp, 240vac circuits, and the 8 gpm model requires three 40 amp circuits. (That's five big fat eight gauge wires from your main distribution/circuit breaker box for the 6 gpm model and seven of those wires for the 8gpm model.
If your current water heater is in good working condition (do drain it a bit to remove the sediment every year), set it at 125 degrees F, and add an aftermarket external "blanket" to conserve energy.
If I owned a house, and it needed a new water heater, I would install a gas or propane tankless type. I might also install a modest solar hot water system with "oversized" hot water storage. If you "oversize" hot solar storage and keep the average maximum temp below 140 degrees F, it will minimize losses and provide lots of usable hot water. Without solar, a simple Many people want to get the stored water as hot as possible, but the "standby losses" increase tremendously as water temperature rises.
The losses in stored and piped very hot water is also a reason why evacuated tube collectors are not as good as black-chrome coated flat plate collectors for everyday domestic hot water applications. Evacuated tubes are good if high water temperatures are required, but it's often a better idea to preheat water going to boilers with flat plate collectors and finish the temp rise with gas. Plus, in cold climates, ice and snow will not easily melt off of evacuated tube collectors, but will slide off flat plate collectors if they are mounted at a pitch of 30 degrees or steeper.
Dave van Harn
(I currently work part-time for Alternative Power Systems in Sebastopol, CA as their solar thermal specialist. For 3 years prior to that, I did inside sales and dealer development for
Heliodyne of Richmond, California, now the oldest solar heating manufacturer in the U.S.