That water storage tank works constantly to keep water hot and ready whenever you want it. But as the water sits, it naturally cools down, a process known as “standby heat loss.” When the water cools, the burner or heating element kicks on to warm it up again, in a constantly repeating cycle.

Water heating is the second largest energy hog in your home, accounting for 14% to 18% of your household’s total energy costs — between $400 and $600 per year. (Heating and cooling is the #1 energy hog.)

Here are 5 tips to trim your water heating costs:

#1 Turn Down the Tank’s Thermostat

For every 10 degrees you turn it down, you’ll save 3% to 5% on your bill. Most water heaters come preset at 140 degrees, which has the added risk of scalding. The Energy Department recommends most households lower it to 120 degrees. That’s high enough for your needs, and high enough to reduce mineral buildup in your tank and pipes.

Here’s how to ensure you get 120 degrees:

  • First measure to see what temperature your water is at now. Don’t trust the thermostat. They are often inaccurate. Instead, use a thermometer to measure the temperature of the hot water at the faucet farthest away from the heater.
  • To remember this setting, mark that temperature on your thermostat.
  • Now turn down the thermostat to what you think will be 120 degrees, based on your earlier measurement.
  • Wait at least 2 hours. Measure the water temperature again at the same far-away faucet. It may take a few attempts to get it right.
  • Once it’s right, mark that spot on your thermostat so you’ll remember it.

If the thermostat on your water heater doesn’t have a numbered gauge, put it midway between the “low” and “medium” marks. Wait a day, and then measure the tap temperature as described above. Keep adjusting until you hit your target temperature.

Keep in mind that some water heaters have two thermostats — one for the bottom heating element and one for the top.

Related: 4 more effective ways to take back your energy bills