Take a look at this

http://www.airgenerate.com/products/airtap.html

Coastal, I did see those heat-pump adapters in my research and it's very interesting. But by the time you pay for the storage tank WH, *and* the airtap then it's really getting pricey.

Electric tankless are les efficient. I would propose a Propane then and then you would probably only have to fil it a few times a yea, but definately not electric. I have a Bosch for the childrens side of the house and a Takagi for our side of the home. Both Natural gas and neither one has run out of hot water.

You might consider solar hot water as a primary heating source (with a decent storage capacity) and then use an electric hot water tank inline o bring the water up to "final" temperature.  In this scenario, the electric heating element would be rarely used.  You could also go with an electric tankless, but the added cost to purchase may not justify the energy savings.  Federal rebates on solar HW = 30%.

Ed

Check out my project - www.GouinGreen.com

I think that using more than one tankless is a good idea and, depending on your floor plan might have a big impact. Since the units would be (relatively) small I think it should also be quite cost effective. We're adding 1 1/2 bathrooms that will be a long way from the water heater and will put an extra heater in those to avoid waiting for the hot water to work it's way through 100+' of pipe and then cooling off when we're finished. It also avoids any conflict in water usage between those bathrooms and the kitchen.

There were some good suggestions above. I think that the comment "Electric tankless are less efficient" means less efficient than gas. I suspect that Ken is right and that a propane version would be cheaper to run - if you're allowed to install one. You can get the 30% Energy Star tax credit for heater and installation with a propane heater (http://www.energystar.gov/index.cfm?c=products.pr_tax_credits#c4). If you're only considering one fuel, tankless is more efficient than a tank.

You should also take a look at the rest of the equation. Low flow showheads and a front loading washer will probably save you more than the difference between a tank and tankless (and maybe also electric vs. propane).