I am designing a passive solar home (without solar hot water) and am looking at a Rheem Marathon water heater and trying to determine whether I'd be better off purchasing an on-demand tankless water heater. Our family of 4 uses about 60-70 gallons of hot water/day on average. Any suggestions?

Have you considered a heat pump water heater?

again, go to
http://www.greenbuildingadvisor.com/search/node/water%20heater
and type water heater into the search box; lots of good information that some of us will be quoting. Heat pump water heaters running off solar PV panels seem to be the choice of most experts right now, especially in the kind of home you're building. Marc Rosenbaum's articles including this one
http://blog.energysmiths.com/2011/11/getting-into-hot-water-part-2.html
have excellent data & should answer most of your question.

Electric hot water heaters have severe flow rate issues in cold climates, but can be OK in places where the incoming water temps are never lower than 55F. It also requires massive dedicated power wiring/capacity just to serve the water heater for thoses intermittent by quite intense power draws.

If the bulk of the hot water is from showers (rather than tub-baths) you get a HUGE bang per buck out of a drainwater heat exchanger- more so than the up-charge of going from a so-so electric tank heater to a Marathon or tankless. If you have at least 4-5' of vertical drain downstream of the showers this can work- easier to make work in full-basements or tall crawlspaces than in slab-on-grade (unless the showers are all on upper floors, not the ground floor.) The performance improvement is both on efficiency (more than half the showering heat can come from the drain flow), but also on capacity.

Natural Resources Canada maintains a 3rd party tested efficiency on many drainwater heat recovery models, here:

http://oee.nrcan.gc.ca/residential/personal/retrofit/13302

EFI is the US distributor for Renewability Power Pipe series:

http://www.witrendhome.com/media/watters-efi-powerpipe.pdf

(EFI will set up an account and give you the wholesale price with a credit card number over the phone, even in quantity-one orders.)

Heat pump water heaters work best if kept in a conditioned space, in a cooling dominated climate. The net-performance in heating dominated climates isn't simple to model or test, but the laws of thermodynamics tells you that if half the heat is being drawn from the space, it's an extra heating load during the heating season, and your heating fuel costs for making up the difference also have to be factored in. There may be some payback on it within the lifecycle of the equipment, but the particulars matter.

Accounting for everything, heat pump water heaters are almost always a good payback compared to normal electric ones. They don't do so well when compared to natural gas.

Posted By jonr on 17 Dec 2012 01:01 PM
Accounting for everything, heat pump water heaters are almost always a good payback compared to normal electric ones. They don't do so well when compared to natural gas.

Theoretically. Since they are relatively new and expensive, payback is assumed by the numbers and long service-free life. The typical warranty does not inspire this old plumber. http://blog.yagelski.com/2009/11/ge-hybrid-water-heater-does-heat-pump.html

As my hot water tank will be located in the same small utility room as my microinvertor for my solar PV, a heat -pump water heater would probably be the way to go, as the room will be rather warm. The energy used to generate the microinvertor heat could be transferred through the air to the heating of water.

With 4 showers in a short period, you would want an 80 gal HPWH, but they are huge, loud, and need a lot of air space. How big is the utility closet? And would noise be an issue?

I am v happy with an 80 gal Voltex model HPWH in an attached garage.

it's a small room under the stairs to the 2nd floor. it's about 200 sqft however we'd have either a louvered door or ventilation panels in the wall. The space should stay very warm due to the inverter from the PV solar.

sounds like the perfect location

as the exhaust of the heat pump is cooler than the surrounding area, what do you think about having the option to run ductwork from the tank to the center of the great room to dump cooler air for summer months? in the cooler months I could disconnect the exhaust connection to the great room and just have it dump locally into its room.

sounds plausible, but superinsulated homes are typically petty consistent temp wise, so you may find you don't need to bother. maybe just duct it out of the closet

Some units (but not most) are set up to do this....seems to me that a lot of these 'ideas' are not so useful since the cycling is infrequent. If you shower in the morning, it might run a couple hours while you are at work, and then not again all day. If you have a central AC system and it is in the conditioned space, it will be reducing your usage whether you duct the air or not.