Tankless Water Heaters: Gas Versus Electric
One of your reasons for choosing a tankless water heater powered by gas is probably environmental, as you don't want to use a tank that is constantly consuming energy as it heats water all day and night. A tankless system, on the other hand, uses energy primarily when the water is needed.
Yet keep in mind that a gas-fueled heater is still likely to leave a greater environmental footprint than an electric heater. After all, it still emits greenhouse gases, and does nothing to reduce your dependence on fossil fuels. Although, if you're in a region where electricity is produced by burning coal, then that issue may be moot.
It is also simply more expensive to install and maintain a tankless gas water heater. The venting requirements are quite strict, and will most likely involve some degree of renovation, and the annual maintenance costs can be added as well. And even the fuel sources, gas versus electricity, are projected to rise at different rates in the future. Gas is expected to become much more expensive, much more quickly than electricity, especially as world gas reserves are used up. An electric water heater is likely to be less expensive over the years than one fueled by gas.
An on demand water heater can save on energy costs and on energy demand, and theoretically be a more environmentally responsible option for heating the water in your home. Yet the costs and energy questions associated with a tankless gas water heater may simply not live up to high enough economic and environmental standards. It's true that this kind of system is still the most popular of the tankless options, and yet when you look at all the factors, an electric system may ultimately be the better choice.