I'm looking at getting an EcoSmart(or similar) electric on demand water heater in my home(WA state, not in Seattle). The sizing indicates I'll need 3x8ga(3x40A breaker) conductors. Long story short, I want to conduit instead of Romex. The total conduit length would not exceed ~40'. Since steel conduit is an approved grounding mechanism, I am wondering if a single steel conduit is suitable for a ground with this larger draw. I'm trying not to run afoul of any safety or code issues.
Yes the metal conduit is technically an acceptable ground for the circuit described. However rarely would you see a professional electrician install this circuit with out a separate grounding conductor. The ground is just too important. The metal raceway can acquire loose joints over time thereby compromising the grounding pathway.
In case of mechanical stress to the house/walls, f.e. in earth quake locations or at hills, geologically active zones etc. it would be safer to provide an extra Ground wire.
Another aspect are counterflow heat exchangers which will help to save energy/money.
Easy for DIY, not expensive, e.g. How To Make A Heat Exchanger