LJD, you might want to check your heater, it's probably undersized; just like most anyone else that has or had a tankless heater and is complaining about cold or cool water.
My tankless heater is set at 120�F and will burn you if cold water isn't introduced. And yes my water is plenty cold coming out of the well, through a whole house filter and a water softener. My heater rise with a 2.5GPM (using your example) is about 120�F. Check the link. Plenty hot enough to shower and and run the dishwasher at the same time.
Efficiency, is much better than having an an oil fired boiler kicking on in the middle of summer with nobody using hot water; only because it dropped down.
I burned about 250 gallons ($2.18 gal) of propane for a household of two, for the year, just for hot water. I would have burned around 500-550 gallons ($3.50 gal) of heating oil for the same hot water only. The house is heated by a wood stove. Which is cheaper for hot water? A tank water heater would be more efficient than my boiler for domestic hot water, but not nearly as efficient as the tankless heater.
Tankless was also energy star rated so I could get a tax credit with it.
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Today's Featured Article - Madison's County - by Anthony West. Philip Madison has been a good friend of mine for quite some time. He has patiently suffered my incessant chit chat on the subject of tractors for longer than I care to remember, and on many occasions he has put himself out, dropped what ever it was he was doing, to come and lend a hand cranking handles, or loading a find onto a trailer. Although he himself has never actually owned or restored a tractor, he was always enthusiastic and always around helping with other peoples projects.
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