Increasing water heater capacity might be cheaper than increasing battery capacity.
15kWh battery - 5.5k NZD + and hour of DIY.
So technically battery is more expensive but more useful.
Also easiest with water heater would be cranking up the temperature, but I really hate dealing with scolding water coming from taps (especially with small kids around).
Another thing with battery I can charge with whatever solar excess I have, but with hot water my only option is 16A.
Either way I do not care ATM - I export using spot price which has been 2x of what I actually pay for power - https://www.emi.ea.govt.nz/Wholesale/Reports/W_P_C?DateFrom=...
Your water heater temperature isn't exactly my business but please look into sanitary norms on minimum safe temperature. Water heaters have standing water and bacteria might start living there if the temperature isn't sufficient. I think legionnaires' disease is one of the most prevalent dangers.