No hot water - Rinnai tankless hot water heater

possible bad power transformer or unit is overheating

You will need to have heat in the room to thaw pipes . Cold will come in from flue pipe and freeze pipes . its a slow thaw so pipes don't split .

If you have tankless electric, it can simply be insulated... but tankless electric are seldom mounted outdoor.
Service bulletin says: "the only way of assuring protection is to completely remove the heater during those times the area may experience freezing temperatures.

There are tankless with built-in heater for exterior installation.
Check your manual, or add a comment with specific model number and maybe I can find the information.

Here's why they install tankless outdoors: Because tankless burn more fuel per gallon of hot water. This requires larger gas line and larger vent pipe than typical tank-type gas water heater that is usually installed indoors.
They install tankless outdoors, so there is no need for expensive vent pipe, and because there is ample incoming air to support combustion.
So if tankless does not have factory-installed internal heater, then the unit can freeze easily when the combustion draws in cold air.
Of course you can put heat-tapes on the pipes but the heat exchanger inside will quickly freeze during periods when hot water is not being used, and combustion is not taking place.

You can move the tankless installation inside and use correctly-sized vent and intake pipes directly through the wall. This will generally protect tanklesss from freezing if room is heated adequately.

If you need further help, I’m available over the phone at https://www.6ya.com/expert/gene_9f0ef4df2f9897e7

I agree with you. The foam insulation should only be on the Hot Water side. The cold water side doesn't make any difference, as that temperature rarely changes in California.

Hope this helped you AK, thanks for choosing FixYa.

check to see if you have a blocked line on the hot water side

Power outage will reset Rinnai unit to that temperature. Read manual for more info.

What type of pipes are install on this heater?

I wonder if you have this problem below caused by a drop in water pressure from someone flushing a toilet or a washing machine. I would call the company to remedy this issue.

17. What is a cold water sandwich effect? The term “cold water sandwich effect” is a term that is used to describe the introduction of cold water into the hot water supply line during frequent on/off operation of an instantaneous water heater. The cold water sandwich effect, when present, appears as a momentary drop in hot water temperature as it is discharged from a hot water supply outlet (i.e. shower, tub, or faucet). This phenomenon is present in the operation of all instantaneous, tankless style, water heaters, but is minimized with the high tech design of Rinnai water heaters.
The technology built into the Rinnai water heaters is designed to minimize the cold water sandwich effect. Rinnai water heaters are microprocessor controlled and when water flow through them ceases, they remain in a “ready to fire state” for approximately 1 minute. If water flow through a Rinnai water heater begins within the first minute following water flow stoppage, the water heater will fire back up within 1 to 2 seconds. This minimizes the cold water sandwich effect that would otherwise be experienced with a low tech tankless water heater. It should be noted that the cold water sandwich effect cannot be removed completely from tankless style water heaters. The safety standards developed to insure the safe operation of water heaters require a delay in the ignition sequence of all gas water heaters.
While the cold water sandwich effect cannot be completely eliminated from standard plumbing systems, it can be eliminated from plumbing systems that have a supply and return hot water circulating system. Rinnai has developed 2 methods to eliminate the cold water sandwich effect in residential hot water circulating systems.
The first (and preferred) method to remove the cold water sandwich from circulating systems utilizes a small electric tank water heater (powered up) that is used with a dual purpose. The small water heater acts as a mixing tank to eliminate the cold water sandwich effect from the Rinnai water heater and it uses its electric heating element to offset the heat losses from the hot water circulating system.
The second method to remove the cold water sandwich from circulating systems utilizes a small 2 to 6 gallon storage tank installed on the hot water outlet of the Rinnai water heater. This tank acts as a mixing tank to blend the cold water sandwich with hot water and eliminating its effect at fixtures.

Its A Possibility The Left Over Water In The Hot Is Frozen. If Your Line Is Exposed Outside Somewhere It Can Easily Freeze Up. Turn On The Hot Water Everywhere In The House And If Accessible Check The Lines To See Where The Warmth Ends. You Can Leave One Off Over Night In Hopes That It Will Eventually Defrost.