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I was looking at this question, which is somewhat related to mine but didn't give me a good answer: How to evaluate the suitability of an electric tankless water-heater

Basically, my mom's water heater tank broke this morning. It was a 40 gal oil-furnace driven tank, and the plumber says to replace it will be $2500 or something (they want to replace it with a 40gal stainless steel tank, as they say there is nothing smaller than that available). My mom lives alone (it was lucky I just happened to be here this weekend) and generally doesn't use that much water.

I was looking into alternative options and came across these things on amazon: 6gal electric water heater & 20 gal electric water heater

However, I don't really know much about these sorts of things. The house has two bathroom sinks, two showers, and one kitchen sink, although one of the showers is never used. There is also a dishwasher and a washing machine, although I don't believe she does much warm or hot washing. Generally only one source will ever be used at once. (The max would probably be a shower and the dishwasher running at the same time.)

I was sort of thinking it would be possible to put a 6gal heater at every sink/shower (5 total for $1k) and then a 20 gal in the basement hooked to the main line as a "reserve" or something. Does this make any sense? It would leave the house with 50gal of hot water (up from a 40gal tank) and cost $1000 less than a new tank. However, I don't even know if this is possible to do. Additionally, I kind of guess that it might cost more to operate than the old system. Can anyone tell me if this is a good idea (or even possible) in my situation?

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You're adding more points of failure, and when the small tank runs out, you will see a temperature drop until the tank fills with hot water from the reserve. You also have to worry about eventually reselling the home. Given that, my preference is to keep it simple with a single tank.

One option to give you the same effect is a single electric tank with the lower element turned down. You are then only keeping half of the tank hot but can easily adjust it to have full capacity.

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Thank you for your input, I really appreciate it! Do you have any insight into feasibility (other than the additional points of failure) or operation costs of the electric setup I mentioned? –  matt5784 Aug 12 '12 at 0:00
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My gut says that multiple heaters will be more expensive to operate unless you turn off the reserve. Feasibility depends on whether you have the space to locate additional water heaters, a power source including room on the breaker panel, and a place to connect a drain pan in case of leaks and for TPR the valve output. –  BMitch Aug 12 '12 at 0:19
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Also consider that installing multiple water heaters will cost you a lot in labor, unless you do the work yourslef(and in that case you can get probably get the main heater replaced for much cheaper)

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