Mine did a similar thing, when in off position, it would only turn to pilot/ignite, but would not move past this point. I took off bottom cover to locate regulator. where the slector knob shaft meets the regulator, try spraying wd40 in the top of regulator where square shaft goes into reg. There is a saftey lock mech in there, and in my case it was stuck in the locked position. I then worked the knob back and fourth applying alot of pressure, but not enough to break the knob. it worked after a few tries, and lights and functions normally, locking again if pilot goes out. good luck.
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Error Code 11 indicates an ignition failure. Check that the gas supply is turned ON. Switch the heater to STANDBY and the ON again. If the burner doesn't light or you continue to have a problem contact your Rinnai dealer.
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An error code of 12 indicates that the front flame rod did not sense an ignition (heat). Turn the unit off and then on and see if the code reappears. Your flame rod could be bad, have carbon stuck on it, a loose wire or not getting flame to it quick enough because of a dirty burner. If your unit fires up with out an error code, I would suggest getting a good technician familiar with Rinnai in to clean it. For safety reasons, check to make sure the vent is free of obstruction or debris.
It may be, Rinnai suggests a maximum length of about 13 equivalent feet of venting including elbows. Add 6 feet for every 90 degree elbow. If the vent is longer than this it is taxing the combustion fan motor and it will start giving you error codes and will not ignite. Remove the trim panel from behind the heater and find the flexable air intake pipe. Temporally remove it from a fitting and test the unit a few times to see if the unit starts quieter. This procedure will be taking room air into the heater for combustion and circumventing the direct vent feature of the heater, not a fix. Have you had the gas pressure tested? It gould be that! You may wish to consider relocating the heater and fire your installation contractor for putting you in this predicament, not Rinnai.
The thermocouple [s] require replacement, or in my experience try servicing the unit first. There is an injector for the main pilot and a secondary injector for the flame thrower ignition. Both of these are prone to blocking due to dust and can be enough to shut the unit down. Although usually this is thermocouple related as you are manually keeping the unit running when you hold down the button, if the tcouple is broken it wont send enough millivolts to hold the magnetic valve open when you release the button.