I was very excited to see that they installed an on-demand water heater in our new Entegra Esteem 27U. BUT, at this point, I'd seriously consider exchanging it out for a conventional unit. The pluses are that you don't burn propane or kilowatt-hours to keep the water hot while not using it. And winterizing does not involve any special steps. Piece of cake. Two really nice plusses!
The minuses are that, like Old Biscuit said, it takes water flow to make it operate. And it needs to be a medium flow, at least, not a "trickle". When we turn on a hot water tap or shower valve it takes about 2 or 3 seconds for it to decide it needs to start. That is to prevent false operations from causing it to fire. It then takes another 8 to 10 seconds for the burner to light and the heat exchanger to come up to temperature so that the outflow temperature reaches much over 100 degrees and be useful as "hot" water. (We have it set to 112 degrees) Then, it takes another 5 to 10 seconds for the hot outflow water to reach the point of use. And even then, it takes a little more time to reach desired temperature as it has to warm the walls of all of the piping from the water heater to the point of use. So that's maybe 15 seconds of running (wasting) water before it finally what you want at the tap.
In small RV's like our Esteem, fresh tank contents and holding tank limitations make wasting water a not so good idea. Like everything in life, there are tradeoffs in every decision. Maybe we'll get used to it. I do know that we don't get to wash or rinse dishes with hot water, as it is just way to wasteful to have it be hot when we want it hot, so I don't even try. The reason for the 112 degree setting is that we can shower with it running straight hot. Having to mix in cold just uses a little more water than we'd prefer to use.
Jim & Angie, Boise, ID
2021 Entegra Esteem 27U
2017 GMC Acadia Denali