If you live in America, you should definitely check with your power company. There are a lot of initiatives that will give you $500 off a hybrid water heater which will decrease your power bills in exchange for a slightly larger upfront cost.

Mine cost $1,600 after the discount, but my power bill dropped ~$35 a month, and it spits out enough cold air that by having a fan in the basement I can cool my entire house throughout most of the summer without using my HVAC at all.

Which means that if it lasts seven years with regular maintenance, it will have paid me at least $35 * 12 * 7 - $1600 = $1340 to own this water heater.

It's literally the *Vimes Boots theory in practice, but for water heaters.

Because I had the money to buy the more expensive higher quality item with new technology, I ended up getting to have more money in the end.