One sure way to cut hot water costs is to use less of it.
The ACEEE says a family of four uses 700 gallons of hot water per week. Install low-flow shower heads and faucet aerators ($10 to $20 each) and cut hot water consumption by 25% to 60%, typically $200 off the average U.S. household water bill of $475, according to the U.S. Environmental Protection Agency.
Also, make sure you use the “economy” setting on your dishwasher, and break the pre-washing habit. Modern dishwashers can handle a dirty dish. Scrape what’s left of dinner into the trash and then load.