It all depends on the details...
Where I live (Alberta, Canada), we have natural gas. However, when our hot water tank blew out about a month ago, we chose to replace it with another tank as the payback period for the tankless was longer than the anticipated life of the unit itself. Until the cost of these units comes down 20-30%, it just doesn't make sense.
Also, check into the installation requirements for the tankless heaters. They usually require venting to the outside and we only had a 3' side yard adjacent to our nearest neighbour but needed a minimum of 4' to meet bylaw requirements. As a gas fired appliance, permits will be required to be legit (there's another long thread on this topic elsewhere!).