If the person installing the system saves $1000 in fuel costs, then $1000 of less fuel is bought. The price drops by that amount. This is the supply/demand curve.
Two problems with that. First, it assumes that the "Price elasticity of demand" is unity, and I don't know if that is the case.
Second, as I said before, energy is fungible. So for the $1,000 in fuel we might save in the US, that savings gets spread across energy world-wide. We would only get a portion back in reduced energy costs.
I don't see why it's that difficult to fathom, unless your ambiguous "some people" is so large as to negate any cost savings entirely.
I never, ever said it negates it. Just that it would reduce it by some amount. But if it is a 15% savings for those that do not use more energy just because they have more hot water, then it only takes a few people using additional hot water to make a significant degradation in overall savings.
You're also ignoring the fact that most of that $1000 goes to installation. Installing a new tankless requires a larger gas line and sometimes a larger water line. The 2nd tankless heater, in 15-20 years, will be marginally more expensive than a tank heater and will have a much quicker payback. You can see this easily by looking at tankless prices. The Bosch 1600 is ~$600. A GE 40 gallon (12 year) at HD is $528. A 50 gallon (6 year) is $374. (Warranty is worth 150$??)
Well, a perfectly suitable 40G for us will cost $360. I think the warranties are just insurance policies - this one with a 6/6 has the same construction as the 12/12 (maybe a second anode rod, but I can replace that myself if needed). So still a big diff in cost. My tank is 22 YO and is the same basic model as what I will buy.
Bottom line: Maybe a stick would work better but carrots can also work. In this case, it does - less fuel is used.
I don't think the question was ever whether one will work or not. It is which one will gives the most bang for the buck. I think a revenue neutral tax and some education can go a long, long way. Something like:
here is your energy tax rebate check- here are some things YOU can spend it on to reduce your high energy bills.
That way, we would not have a "one size fits all" program. T-Al can spend on tankless since he's on expensive propane, I'd probably buy more insulation, maybe a space heater.
And no one would get a credit to pay for something they were going to do w/o the credit, which is just a waste of my tax $.
And if you doubt the American publics ability to react to high prices, may I mention once again - what happened when gas went to $4? Did people find thousands of ways to conserve, or did they all go "I'm too stupid to know what to do - please Mr Govt, help me!"?
Are we having fun yet?
-ERD50