Water Heaters - Does a tankless water heater make sense in a cold climate?

I live in Minnesota, and I came home today to find my 17 year old water heater leaking, and I need to replace it. Doing some quick research, I found a couple units recommended for a house my size ( 1 1/2 baths, no dishwasher). My current water heater is in my unfinished, uninsulated basement. My concern is that I am looking at units around 4.2 g/min at 45 degree rise, and that my rise will be much higher due to the lower than average ground water temperature, so that I might only get, say, 2 g/min at a 60 rise. Also, I wonder for my size of a home if I will really see much actual savings. We currently have a natural gas powered unit, and i think most of the savings for tankless are seen vs. electric units. Also, we may only be in our house another 3-6 years, so I'm worried the upfront costs may not get made back up. ANy advice in general, or cold climate specific is greatly appreciated, as I need to make a decision SOON. Thanks.

I looked into one of those. If you are going from electric to gas. Yes, you would be saving money. From gas to gas. I don't think its worth it. That just my thoughts.
You will not see any savings worth going through the trouble of the install.

When you get the new water heater. Just get one with a good ratting.

Travis

The high initial cost, high repair costs, possible plumbing remediation and dubious operational cost savings make me leery of installing one.

Go with the smallest, best insulated tank with heat traps you can find which will probably have the highest efficiency rating. I think the next owner will be happy to get any recently replaced hot water tank so they can go a few years without that headache.

I am in agreement that tankless water heaters are not the way to go .
The reality of tankless heaters is that they have been very popular in Europe for many years where living space is at a premium.
In North America when installation costs, maintenance and replacement costs are considered I believe they will actually cost considerably more than storage hw heating.

In the 3 to 6 years you plan on staying at this house you WILL NOT make up the savings.

Here is some info which may help from consumer reports
http://www.consumerreports.org/cro/appliances/heating-cooling-and-air/water-heaters/tankless-water-heaters/overview/tankless-water-heaters-ov.htm

I dealt with them in Europe quite a bit. If you liked lukewarm showers they were ok. They really did deliver continuous "warm" water as long as you wanted to stay in there, which wasn't very long normally.

Until they become more reliable and hmmm.. user friendly?.. they won't be very popular here. Most like HOT..not warm.
They do work in some situations, there have been plenty of folks here who said they loved them. But they take a large initial investment and some change of lifestyle from what I have seen. Esp for retrofit. New construction might be different. Key, I think, is a good installer who knows the quirks.

How bout this..when I was in a (ahem) hotel in Brazil..they had shower heads that warmed the water. Wires out of the wall into the showerhead. Made me a bit worried, esp since I think they used 220 down there. It was more like kept it at room temp actually.

I would recommend that you buy a regular water heater as well. When we had our house inspected before purchase, I specifically asked about the tankless water heaters out now. The inspector told me not to do it. He cited pretty much everything the Consumer reports article did.

I suggest insulating your water heater. I've seen them advertised in home depot's and Lowe's Sunday advertisements.