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Anna:

I installed a whole house tankless heater a year ago and the only drawback that I've found is that there is a minimum water flow that is required to turn the heater on, so if you want to trickle hot water it won't work. On the plus side, I never run out of hot water if the flow is enough. Between that and the fireplace insert that I installed last year I cut my natural gas and electric bill by 1/2 to 2/3rds vs. last year. My hot water heater was made in 1963 by Rheem and I replaced it with a Bosch unit. The heater was on sale for slightly more than $800.00 but the thing that really got me was the installation kit for the air intake and exhaust - a bit over $200.00, all for what I think cost <$50.00 in material.

The only other down side was that the heater made me realize that the water supply pipes in the house are corroded internally and I need to re-plumb the whole house. I'm switching to Pex and all I need to get are the manifolds.