My 50 gallon hot water heater consumes about 900 dollars a year to heat water. I use propane since I live out in the boonies. I take one shower a day and other than that, I don't use hot water in the house. I use cold water to wash my clothes and my dishwasher can heat water with its electrical heating element.
The bottom line is that that tank out there is keeping a lot of water warm all the time when the need is very infrequent.
I've been thinking of installing an on demand hot water heater. It too would use propane but only heat water when I use it. The disadvantage for most people is that these things don't supply a lot of hot water unless you have a 1 inch input to the unit. The output for the least expensive devices is something like 3.2 gallons a minute. That's fine for me since I use low flow shower heads.
So, does anyone have any real experience with on demand heaters? I'm very interested in any personal experiences.