> But the _idea_ of using energy around the clock to keep 40 gallons
 > of water hot seems a bit screwy to me when you can just heat what
 > you need when you need it.
 >
 > But educate me,
We installed an "in-line" hot water heater when we built our house
about eight years ago.  There were some energy savings.  The only
drawback is that you have to run the hot water for about 30 seconds to
get any heat but after that you could take a four hour shower without
running out of hot water (not exactly an efficient behavior ).  You
do need to look at your use patterns.  With five people taking showers
in the morning, laundry, dishes etc it still works out well.
Unfortunately, the company that made this particular model has gone out
of business.
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