Tankless system will use less gas, but, gas is cheap. Storage is fine because the insulation they use is so good. The thing about tankless, is the reality of basically 'unlimited' hot water for a properly designed system. Installation costs and maintenance costs are more too, but I don't sell condensing direct-fired tanks, and I am no expert with how long they last to be honest. And no, you will never probably live long enough to recoup the costs! But it might be worth it for something you use multiple times a day, there is value in that
With the condensing tankless water heaters, unlike old conventional times, they do need maintenance and servicing because of the way they function (condensing appliances 'scale' up inside the heat exchanger over time). No way around it though. Just like anything mechanical, over a matter of time it will fail - That being said,
a good tankless unit in a residential application should last up to 20 years. Some brands (see, very few) are very good. Big name brands, Bosch, Rinnai, are both solid. Navien has good marketing here but they have had their fare share of major problems in the past. If the product has a good warranty, that helps a lot when you get down the road years later.
Storage tanks now are required to be condensing, so really it is a toss up. If you do not have a hydronic heating system or a boiler (where I would put an indirect storage tank which is awesome), I would go with a tankless unit, but make sure you have some sort of a recirculation system or buffer tank or I can bet you will be miserable with having to wait 30 seconds to a minute plus to get consistent hot water to your fixtures! With recirc or buffer tank it works as a conventional system does!
My advice? Spend the extra couple hundred for a good tankless system with the right ancillary provisions or go with another storage tank if you don't want to spend to have the luxury.
I know some awesome contractors on the island and in metro van if anyone needs I can refer them.
