Oh, believe me, I understand the physics involved. But the requirement remains to get those BTUs into the water as fast as it's used, which requires a fat pipe, beit electrical or gas.
Some energy savings are realized over a conventional hot water heater in that there is no thermal loss through the hot water tank insulation. In practice, though, I think these losses are overstated- yes, a hot water heater uses a lot of electricity, but that's because it's heating up a lot of water. I think I worked it out once to around 25-50 cents per shower. Of course, I was taking a shower at the time I worked it out, so those numbers might be a bit off
