Some tankless units are set up with flow restrictors on them to try to maintain the temperature rise...you may be hitting the max flow to keep the outlet water hot.
If you have hard water and haven't delimed the unit, its ability to produce hot water will be diminished, too. These things take more maintenance than a tank type heater - not saying you shouldn't service them too, it's just that you'll notice problems much faster with a tankless if you neglect it.





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