I've had an on demand propane
water heater on one boat which is efficient in regards to propane
but used a bit more water since it had to sense water flow before firing up, so the hot water isn't instantaneous. You have to run a bit before the hot water comes in, then you go from freezing to scalding.
boat has a generator
I run to charge batteries, run refrigeration
, make water and is also tied to the water heater so I do all at the same time when it's running. But of course this uses more diesel
The most efficient was one of my first boats, it had a solar shower
bag you laid in the sun to heat up but I guess it wouldn't be too good in northern winters.
Depends on what you can get more easily, water or fuel