I definitely am aware that the ASHP based water heaters are the efficient/electrical choice... BUT... I'm honestly concerned about the long recovery times of that solution - hence the on-demand/propane system. Add to that, Oregon's climate is dealing primarily with heating, less so with cooling... so I would think it would be better to place the water heater outside the envelope of the living area (if doing ASHP)... in my case, in the garage. I'm super early in the planning/research stage, so as I get more information on the HP based systems, and location of it (inside or outside the airbarrier/insulation) - I'm certain my opinion will morph. Building science. It's fun, right?!?!