Bill Bushnell wrote:

ransley wrote:

....


The closet interior is unlikely to freeze unless we have several days of below
freezing weather, which hasn't happened in over 20 years. I live in Sunnyvale,
California.

The closet has NG service for the existing 50gal. water heater but no electrical.
I could run a new outlet to the closet if necessary and probably will need to for
the softener if I locate it there.

Tankless water heaters are not simply drop-in replacements for existing water
heaters. You will need a larger gas connections and maybe a larger flue.
Your tanked water heater was probably 34-40K BTU/hr and had a 1/2" gas line.
Tankless heaters might run 120-175K BTU/hr and need a 3/4" gas line. You
will also need a large enough gas service connection so that you don't
starve you other appliances (furnace, stove?, etc.) when the water heater
kicks on. Talk to you gas company (PG&E) to find out if your current
gas connection is sufficient for the tankless heater in addition to your
other appliances.