As I understand it, in residential systems, tankless water heater are commonly paired with a buffer tank to deal with the "cold sandwich" and finite capacity of tankless heater1. This seems reasonable, but I'm curious as to why the only config I see is a buffer tank at the output of the tankless. That is, why is a buffer at input of tankless heater seemingly not an option?
It seems to me that keeping a buffer of hot water at the output negates one primary benefit of a tankless system: energy-efficiency. As such, the system is obligated to keep the reserve hot 24/7, thereby generating energy waste.
On the other hand, keeping a reserve at the input, the system can selectively heat the reserve when the demand is expected to be the highest (a couple of hrs a day?) and neglect it at other times. And in the worst case, if demand is unpredictable, the system could simply be programmed to maintain a hot input buffer 24/7, just as with buffer at the output. But in either case, an additional opportunity for efficiency with an input buffer is by maintaining a lower reserve temperature.
Under limited circumstances, I think an input buffer tank may not be an adequate solution to the "cold sandwich", but assuming the system could be programmed to minimize the problem during certain time of day, in a typical residential system, is there a really compelling reason to keep buffer at tankless output? Is there historical or empirical data to back the choice to put buffer on output?