one of those new hot water heaters that only come on when you are using water??? I live in a trailer in a cold climate and my propane bill is horribly high as the heater is always running (gas) to keep water hot. The water heater is on an outside wall which has to be the stupidest design going. thank you . I know one name for the heater I mean is Rinnai…. some one else told me they now have less expensive ones that work the same way. thank you for any opinions or answers.
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Geeta Fookata has provided the best answer so far. After you get some prices for a tankless install, you’ll find yourself at Home Despot buying insulation.
It is called tankless – they heat the water on demand. The gas ones are very reliable and work well. The electrics are still sort of working the kinks out – I would wait another year or so before going tankless electric.
These are about $800 more than a standard water heater but can save you a lot of money on gas, especially if you have a problem with heating it.
You might try installing heat traps (valves in the pipes at the top of your tank) and a water heater blanket (insulated jacket) and foam pipe insulation and see if that helps you out before investing so much in an overhaul to a tankless system.
Why has the unit been put on the outside of your home? Is it an older model unit? I have some of these units, and they have to be vented to the outside. Maybe they miss understood the directions? Are u renting or buying? Check on line as for the requirements for ur particular unit, that my have been the place that they could put it. But i have to agree with u, its kinda dumb. I hoping in the near future to purchase one. Most new homes in the south have them now. Although I have only seen them in the garage of the new houses. Ive not seen any of the newer ones, but will be checking on them in the coming future. Does ur Rinni use natural gas? then u use propane to heat the house? that might be the reason for them moving it. I know some hot water heater are placed under the house, seems to me to weird to have them there– they would be hard to service..i guess to each his own?
An on demand, or tankless water heater is not a good idea. Unfortunatly, when the trailer was designed for your area they calculated heat from the tank to keep the pipes from freezing. By going to an on demand type you will get frozen pipes. Since it is near the end of the life of the water heater you probably have scale built up on the inside of the tank. Keeping the flame from effectivly heating the water. A new tank will remedy that without the frozen pipes.
My mother has a gas tankless, and she loves it. Hers is fitted for natural gas, but I think they can be fitted for propane as well. A whole-house system is expensive, but will pay for itself in a year or maybe less in conditions like yours. Florida, maybe not so quickly.
I want a tankless when my current (relatively new) water heater conks out, and in the meantime I’m thinking of investing in an under-sink version that will provide supplementary hot water to my shower so we can shower and still run the washing machine. 
they are VERY expensive and costly to run, especially an electric one. just keep the one you have and insulate the space better. In addition, the temp rise is only about 50-60 degrees so you’d need one for every faucet to not feel a drop in the hot water temp if something else is on.
also drain your tank once a year to keep the settlement from building up
and rotting your tank.
What you’re referring to is a tankless, or on-demand water heater. In your situation, that seems to be a reasonable solution.
What you can do in the meantime is insulate your water tank with a water heater blanket if it isn’t already insulated. These blankets keep heat from escaping as fast through the water heater body. Also, don’t forget pipe insulation for your cold and hot tank lines. These lines are metal and can conduct heat out of your water heater.
Tankless water heaters are the best solution for your situation, but they are considerably more expensive than a standard water heater. The second solution is stopgap, will help, but not as much as a tankless heater.