Tankless gas water heaters are on average more energy efficient than tank-storage units; by eliminating the storage tank, they also eliminate standby losses through their tank.
Should you change to at taankless Water Heater?
According to some estimates tankless water heaters can provide energy savings up to 20 or 30%, but this is often overstated.
They eliminate standby heat loss, but we should not forget that storage water heaters with a thick layer of insulation around their tank (R-15 or greater) can reduce standby losses to low levels.
In the end, choosing between a tankless or a tank-type water water heater is largely a matter of regional availability and local prices (tank-type water heaters tend to be cheaper in North-Amercia, but not in most European countries).
Changing from an existing tank-style water heater to a tankless water heater system for energy-saving purposes is rarely advantageous.
Tankless heaters require a larger natural gas line - at least 3/4" – and modifications in the existing venting system. That is, replacing a storage unit with a tankless one can entail significantly higher installation costs (often above $1.000)
Pay also attention to the capacity of tankless units. Common models may not be able to meet the simultaneous requirements of two showers, or of showering and dishwashing...
Obviously, there are high-capacity tankless units, able to provide 5 gallons/20 liters or more hot water per minute, and also condensing models able to produce even higher amounts of hot water.
Bottom line: choosing a tank-style water heater or a tankless water heater is largely a matter of local prices and availabity. The replacement of one system by another, in an existing home, is rarely advantageous.