Did you think about to use a propane water heater? I use an Evo on-demand heater in 2.5 years now and it works perfectly. A lot cheaper than electrical, don't have to worry about power - which is off quite often, the only negative thing is that you need to get your propane tank refilled in every few months.
BTW, it's cheap here, you can get one for a big house for US$ 3-400.
The Hun
We also have an EVO on-demand (but ours is 14L) using LPG, bought locally. I would reccomend using 'gas' instead of electricity for heating your water for the same reasons as the Hun. Light can go as it pleases but as long as there is enough water pressure, my shower is still steaming.
This is my first foray into the word of tankless 'gas' heaters and I have to say, it's not terrible. The water will stay very hot for 15-30 minutes(total guess, haven't actually timed it, yet.) It takes about 2 minutes to heat up.
I have a crazy idea, I don't need the water to be hot, just warm, so I was thinking, why don't I just buy a shower head heater and hook it up to the pipe that supplies the water to the shower, and get a low flow shower head, that should be enough to heat the water to 95-100 degrees, which is all that I want.
Dipre, with 4 people taking regular showers daily (hot water is not used for dishes or laundry) we go through about a tank (BBQ sized) a month.
As a side note, I used to have one of those shower head heaters when I lived in el Campo... Can I just say that those units scare the beejezus out of me? Trying to take a shower was, literally, an electrifying experience. Which was not a great one. Every time I had to take a shower I felt like I was about to take a bath with a toaster and hairdryer.
Also, they seem to pull a lot of power, don't have exact figures but the ones I have seen dim the lights just like a hairdryer, if not more. Then again, thats a very subjective view since I can only imagine it would depend on your wiring and hookup.