C.C.
Hi there,
I've been in the retail construction industry for years, and so I've had lots and lots of experience with tankless hot water heaters both in the commercial field and residential in my own home.
I think the estimate you have is WAY high. I've never paid that much even for a commercial-grade unit. Check eBay if your local plumbing supply house is giving you a high quote. Buy the unit yourself and save the plumber's markup. Furthermore, check around locally and find several plumbers to give you installation quotes. You shouldn't need to pay more than $2K all-in. I would stick with Rinnai or Takagi and stay far, far away from Bosch (Bosch does a lot of things well, but not water heaters).
I have always been very happy with my tankless hot water heaters; I have heard of people who have had issues with them HOWEVER it is almost always because of incorrect installation. A couple of things to watch out for: read the manual and determine the correct type of exhaust. This is SO IMPORTANT! Your unit will fail if the incorrect type of exhaust pipe is installed. For instance, for a gas hot water heater, you usually need to install stainless steel exhaust pipe. A lot of plumbers try to cheap out and use galvanized or aluminum. This will ruin your hwh and void the warranty - it will cause condensation to run back into the unit's electronics and/or overheat and shut down. If you use the proper exhaust, you won't have problems.
One other thing to think about is, if you have low-flow faucets and shower heads, you will need to change them out for standard flow. Tankless heaters require a certain flow demand in order to kick in and work. If the demand is too low, they don't turn on. Also, although it sounds counter-intuitive, you will need to set the temperature pretty low - therefore a lower flow demand will cause it to work (i.e. if it's kicking out 120* water, you will only need very little hot water when you take a shower, so the heater won't turn on - however if you set it at 103*, your shower will be almost entirely hot water, so the unit will turn on... see what I mean?)
Anyway, if you follow the above suggestions, the tankless unit will be the best thing that ever happened to you. If I can be of any help or answer any installation related questions, let me know!