I have a very high efficiency 80 gallon electric hot water heater like Paul's except a Bradford-White brand. The 80 gal eliminates the recovery time issues compared to a std 40 gal.  The newer high efficiency hot water heaters are so well insulated the energy losses are less on an 80 gal high efficiency than they are for a 40 gal std.

My local WI electric coop also has a rebate program on high efficiency hot water heaters.  The plumber who installed it also put a simple sand trap on the incoming water line from the well. A good water softener makes a big difference in water heater life also. 

I would not be afraid of a new high efficiency electric hot water heater. They are very much improved over years ago.  It cost a bit more initially but I prefer the electric to the propane. Long term I think the electric will be very cost competitive with the propane if not lower. Jmho.

Jim at Dawn