Most efficient way to heat water

Hi all,
I live in a rural area that recently had a natural gas pipeline put in. I'm currently using electricity but I'm looking to switch to natural gas because I've read they are more efficient. I asked a plumber friend of mine about tankless water heaters and he said they are efficient but pricey and can take a while to off-set their cost. Plus, I know they can run hot and cold during a long shower. He suggested purchasing a 30 gal. natural gas heater and putting it before my 40 gal. electric one to utilize both, and less of each, type of energy. I thought it was an interesting idea but is it too cumbersome? I should mention that I'm having NG piped in anyway for my range and furnace and if I buy a NG heater I get a 300.00 credit. Any ideas would be appreciated!

I would go all gas. Gas will heat the water quicker. I would not use a dual fuel setup (gas & electric water heater pipe together). The electric co. more than likely will raise it's rates when the gas line is completed.

Thanks for the input, I wondered if the electric co. would try to recuperate some of the lost revenue. If I replace the 40 g electric heater with an NG, I'm still thinking of getting a smaller tank. It's just my wife and I, thoughts?

I would keep at 40 gal., maybe 40gal & 40,000 btu's since it's only the two of you, but if you need a quicker recovery time you should go 40gal & 50,000 btu's. You should have a plumbing contractor come out to make sure your flue will handle both ( the 40,000 & 50,000 btu's).