Dana;
A low efficiency tankless with recovery coil... I wouldn't believe the numbers even if they came from other than the manufacturer. Were it insulated, maybe.
Poor guy has all that fancy equipment and can't afford sheet rock?
They do things a bit differently up in the wilds of Canuckistan, eh? ;-) (Notice the code-inspired moisture trap of the poly vapor barrier on an insulated studwall? That would be a mold-disaster in my neighborhood. At least they're letting the footing dry into the basement by stopping both the insulation & vapor barrier a foot or so above the slab.)
The numbers on the efficiency of the drainwater heat exchangers are all from 3rd party test houses following a standard protocol developed by Natural Resources Canada using realistic drain temps, and IIRC 40F incomding water temp. NRCan, maintains
a periodically updated list of performance by model. Since the output of the HX is roughly room temp (when there is 40F incoming water), there's no point to insulating them. In a MD location the incoming water temps are higher, the summetime output temps somewhat higher than room temp (depends on the efficiency and flow rate) and the net efficiencies slightly lower than specified by NRCan due to the lower delta-T, but they are still substantial even with 60F incoming water temp (the annual average incoming water temp in MD will be about 55F.)
If they didn't work I'd have heard about it from my spouse by now, given where I'm running the temps of my kludge of a combi system. The (measured) peak output of the modulating burner as-operated is nowhere near enough to support a continuous ~3 gpm (bucket-measured) gusher shower on it's own, but with the 4" x 48" DWHX it definitely been working. Without the time-out on the occupancy sensor for the bathroom lights my kid would still be in there!
From an economic payback on fuel use it's not necessarily worth it at buck a therm gas, but if you subtract the difference in cost between upsized boiler or indirect tank it does. Payback on never running out of hot water during showers even with a 50KBTU/hr boiler is immediate. Estimated lifespan to where performance has degraded to 80% of it's initial performance is between 30-50 years (based on US D.O.E. work done on first-generation versions back in the mid-1980s.) We'll see- we're coming up on year 5 on mine.
Tom: It's not about the payback on fuel savings, it's about the performance. Even if the thing was 50' away the performance hit isn't very big, given the modest temperatures. At the ~100F drain water temps even if you fed the entire cold water distribution with the output of the DWHX it's not going to overheat the toilet or cause other issues- the output of a ~50% efficiency unit is very tepid water at best, even with 60F incoming water. If people in FL can stand 75F incoming water temps on the cold feed, so can the rest of us, and since it's only going to happen DURING active showering, the inconvenience is very limited. About half of the residential installations I've seen don't isolate it's output to just the HW heater and shower, and I've NEVER heard anybody complain about the tepid water on the cold side.