Ron Hammon wrote:

The big, ol' tank is not the primary source of heat loss. It is the
piping running for many yards in an unheated crawlspace, for example.
When you open a hot water fauct and wait on the flow "get hot", this
demonstrates the lost heat. Since heat loss is reduced as the pipes
cool down, I expect that things would actually IMPROVE with less hot
water use, not get worse. (Of course, eventually, it would still cost
to maintain tank temperature with NO hot water use. So, the "sweet
spot" is in the middle somewhere.)

All true. But here's the deal: Most people who discover tankless heaters for the
first time think they have discovered an amazing secret that is going to save
them hundreds, if not thousands in energy costs.

What they are thinking is that they will replce their storage tank heater with a
demand (tankless) heater. In that situation, you can exclude pipe loss as it is
the same for both types of heaters. Install costs on new construction is
similar. On retrofit instructions, it can be more for tankless than a
replacement tank. The only savings left is heat loss from the tank, which as
been documented, is not that great.

Ah ha, they say! They'll install heaters at each point of use. Well, great. No
pipe loss, but now they are dealing with approximately 3X capital cost *for each
location*, extended install cost (you do have gas or 220 50A service to every
bathroom, right?), and annual service costs.