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I had the same problem with my tankless water heater. Two things solved the problem for me, One, I removed a lot of plastic bits from all the faucets heads by taking off the aerator head and ran water through the lines (looked like bits from a drill came out) and two, make sure your water pressure is at least 50 psi. If the pressure is too low, it will not activate the heater. Also, on a semi-related issue, if you get an E-1 error on the water heater display, check to make sure your propane is on (don't ask how I know about this one!)
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