Good question! First, you should know that tankless electric water heaters require a special connection. To produce hot water at an adequate temperature, these devices require a lot of power (24 kW vs. 3.5 kW for a typical 40-gallon water heater). Major changes to the electrical installation are therefore needed to make sure it’s safe and compliant.
The water temperature that exits this type of water heater varies greatly depending on the temperature of the water entering it. In Montréal, for example, the water temperature in the water supply system varies between 6°C and 20°C during the year. In addition, for daily hot water consumption, this type of devise generates only very small energy savings, since most of the energy it consumes is used to heat water and not to maintain it at a stable temperature.
Due to the inconvenience of connecting it, the reduced comfort and the small potential energy savings, Hydro-Québec does not recommend using this type of water heater.