In 2009, Jim Lunt wrote a cutting edge article for the Journal of Light Construction that compared the advantages of high efficiency condensing hot water storage tank technology (for example, the HTP Phoenix and AO Smith Vertex) over tankless hot water heaters. We've got that article posted here: Condensing Water Heaters. Along with higher fuel efficiency ratings, the main advantages of high efficency condensing hot water storage tanks are:
- Much improved flow rates (the ability to provide more gallons per minute to multiple hot water outlets at the same time),
- Elimination of the "cold water sandwhich effect (where a person can get whacked by a slug of cold water while taking a shower),
- Big savings in the combustion venting system
- Big savings in the gas pipe sizing requirement
The main advantage for using a tankless water heater is to save space, or to serve low hot water demand applications; for example, for use in a detached studio residence with one bathroom and kitchenette.
AO Smith has released a very informative video on high efficiency condensing hot water storage tank technology, and it can be found here: https://www.youtube.com/watch?v=U7h-LerlC78