Looks, good. From the photos, I can't tell if the plywood is in direct contact with the block wall, but if it is, and depending on the humidity level in your basement, you'll want to watch for moisture and mold gathering on the backside of the plywood.
The only complaints I've heard from people with on-demand heaters is, because it takes a certain flow rate to turn them on, it's hard to get a dribble of hot water. The other is that a few have had condensation freeze-ups where the exhaust exits the pipe outdoors in really cold weather.
Do you think you can determine the change in your gas usage (eventually) compared to the old unit?
Wow I didn't expect so many replies and I'll try to get to everyone who has asked a question. Short on time right now because of doctor appoint.
I am on well water and the pump switch was 20/40. I was instructed to go to a 30/50. The tech said the more pressure the better the install will be. I opted for a 40/60 instead of messing with trying to make an adjustment to an existing switch. I also installed a whole house filter to catch any sand before the cold water meets the heater. A small expansion tank was added to eliminate relief pop-offs.
Because our home is 84' long I originally installed a wild loop using ma small Grundfos pump that was controlled by a timer so it wasn't running when we were sleeping. We always had instant hot water there was never any wait involved. I was told the new heater needed a pump that could handle 35' of head at roughly 10psi. The cheapest I could find at the local supply house was a Taco 009.
So I went shopping on ebay and found a sub with the same ratings for $150 new. I'm still waiting for it to arrive. It will install where you see the 1/2" copper capped on my install.
Pricing: I can purchase a standard 40 gallon gas water tank for $150. The 199k American tankless heater was $1100. with a $200. rebate. The additional materials copper, fittings, PVC, pump, exp. tank, filter, ect. all added another grand.
These tanks are made to be vented with PVC (not foam core). They have secondary heat exchangers that wring all the usable heat out the gas/propane that they can making them condense slightly acidic water, hence you see the condensate pump on the lower right of the plywood panel. The flue gas temperatures are cooler than our gas clothes drier. They are rated to 2" or 3" PVC depending on the length of pipe that you need to run.
The instruction I received was to install the heater on an outside wall with double layer of 3/4" ply. I added a thick sheet of plastic between block/plywood to keep the plywood from drawing moisture from the block wall.
On a correction I set the tank initially at 160 degrees F not 140 degrees F. We like HOT water.
Other American
facts
BTW: AO Smith acquired American and Takagni (hope I spelled that right.)