My house was built in 2005 and has the builder grade carrier 40 gal electric water heater. It's on its 3rd element, has lots of rust down the side, have had to redo the inlet and outlet connections. The house is 1280sqft, 3 bed 2 bath. electric only. 2 adults and 2 kids. We want to replace the water heater this spring. The wife wants to look into the tankless water heaters. I have read up on some things and am getting some mixed results. Some sites, people say I would need one large one for the bathrooms, a smaller one for the kitchen and and laundry room. But others have said a 23kwatt large one would run my house but I would need to have the electrical system redone to handle it. Also some say I should look into the 50 gal heat pump style of unit. I'm just looking at my best options.