So we already have an effective way to store heat which can work for decades without servicing and is also cheap to produce (in terms of money and energy consumption).
I actually don't know the answer. I'm just thinking that there must be more to it, if the answer was as simple as "just heat water".
With hot water tanks, they are unfortunately pretty badly insulated as well, with some of them loosing heat very quickly. Depending on how you plan on using that water, you also have to make sure the temperature never dips below ~60C to avoid legionella from spreading.
I actually think that heating your home slighly higher than you‘d usually do is the simplest and most effective approach, assuming it is properly insulated. Just rise the target temp for 1-2C when the energy is cheap and reset it once it isn‘t. Probably not as efficient, but extremely simple to implement.
They both are rated for annual kWH usage less than the US EPA yellow label can display (for their category of tanked water heaters, i.e. competing mostly with resistive heating models).
Annually water heating is about 3% of my energy consumption.
Without rebates, they're similarly priced.
As far as reliability, they both have decent warranties and backup heating elements. Both heat water without internet connectivity. Similar performances (as far as heat output).
Overall, I feel the AO Smith is more customer friendly. Definitely easier to install:
1) AO has both top and side water connections; Rhm has one top and then one side connection (why?!)
2) AO's venting connections are far superior to Rheem's (which require custom/expensive adapters if installed in spaces <700sqft) — AO just has two standard 8" duct connectors on top... so much easier/cheaper to install into a closet. Rhm's top slit needs a $120 plastic adapter, and then ejects to the side (of a 24"D cylinder) [again: why?].
3) Rheem will not stay in ELECTRIC-HEAT (only) mode, for longer than two days — it automatically reverts to the prior heat pump option (which is annoying; you can use the app and set up a schedule to "force" electric mode... but then you have to use an app). AO stays in whichever mode you select.
4) AO is just nicer presentation. Despite a few obviously less-expensive components and design decisions... the AO is better thought-out. Just as an example, the Rheem has a threaded 3/4" socket for condensate, while the AO has a pre-installed (cheaper, too) drip tube.
5) The AO's electric vault is on the side (and not top) so a top leak is less likely to fill the conductors // corrosion. This is a better decision.
6) Rheem will likely last longer, despite being two years older. We'll see.
Either one will save you a lot of electricity + bonus dehumidification (while operating). I bought whichever was cheapest, the first time; now I would buy the AO even if ~$250 more expensive because the install is that much easier. This last rebate period I bought three =P