Thomas. The instant -on systems arent "always -on" They just heat the water as the demand picks up.
Sorry, I mixed up the names.
Does your night time heater have a large insulated storage tank for hot water?
Yes it does. The energy saving comes from using "surplus energy" that the power plants produce anyway. It doesn't come from heating only water that's needed.
If you're heating with gas in any case, your solution looks pretty good.