This is all based on the assumption that the water heater (
not hot water heater) is o
n all the time...it is
not. By implementing this, you will force the water heater to be on more frequently, raising your electrical costs.
Temp at the faucet is ok @ 120*F but problems do arise when lowering the W/H tank temp. Tank temperature should not be lower than 130*F (hence the minimum thermostat setting) to prevent bacterial growth, (such as Legionnaires disease). Dishwashers need 140*F to properly clean & disinfect.
The other down side to lowering the H/W temp. is the greater use of hot water to get the same end result (and if more people are using the hot water the last one will be lacking

).
This exchanger would work...
http://www.americanroyal.net/page/page/4344238.htm
but you will still need to limit the hot water exchanged by limiting the volume passed thru the exchanger and then mix it with the tank water in a sump.
Oh, and CHOMPERS is correct about the copper and copper pipe builds up
with a thin scale of calcium carbonate that further protects the pipe.
Boy, do I sound grumpy...
Dr Joe
.