How to Reduce Your Water Heater’s Energy Use

Water heater in laundry roomImage: Dan Humphries

Easy and cheap ways to make your water heater more energy efficient.

In the saving energy fight, the hot water heater is a born loser. That’s because most of us have a conventional storage-type water heater.

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 accounts for 13% of your household’s total energy costs — about $270 per year based on annual home energy costs of $2,060.

Here are five tips to trim your water heating costs:

1. Turn Down Your 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: Effective Ways to Take Back Your Energy Bills

2. Use Less Hot Water

One sure way to cut hot water costs is to use less of it.

A family of four showering five minutes a day uses 700 gallons of water each week — a three-year supply of drinking water for one person!

Simply by installing low-flow showerheads and faucet aerators ($10 to $20 each), you’ll cut your hot water consumption by 25% to 60%. Plus, you’ll save on your water bill. That family of four using low-flow fixtures can save 14,000 gallons of water a year.

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 or compost bin and then load.

3. Drain the Sediment

Tanks naturally build up sediment, which reduces efficiency and makes saving energy a challenge. Draining the tank will keep it running efficiently. And it’s really easy to do:

  • Turn off the water and power to the unit. On a gas unit, set the burner to “pilot.”
  • Connect a garden hose to the spigot at the base of the tank.
  • With the other end of the hose pointed at your floor drain, carefully lift the tank’s pressure-relief valve and turn on the tank’s spigot; water should begin to flow.

Tip: While most manufacturers recommend draining the tank once or twice a year, you don’t have to drain it completely; in fact, the Department of Energy recommends draining less water more often — just a quart every three months.

Related: How to Care for Your Water Heater

4. Insulate Exposed Hot-Water Pipes

By insulating your hot water pipes, water will arrive at the faucet 2 to 4 degrees warmer, which means you won’t have to wait as long for it to heat up, thus saving energy, water, and money.

While this isn’t an expensive DIY job — 6-ft.-long, self-sealing sleeves ($2.50) easily slip over pipes — it could take effort, depending on where your hot water pipes are located. Exposed pipes in the basement are easy targets: Hard-to-reach pipes in crawl spaces or walls might not be worth the trouble.

5. Insulate Your Hot Water Tank

If you have an older tank, and especially if it’s located in an unheated space, wrapping it with an insulating blanket is a cheap and easy way to reduce costs.

Manufacturers have figured this out, so most newer models already are insulated. It’s easy to find out which one you have. Look on its label to see if it has an R-value of at least 24. If not, you should insulate your tank.

With these older models, an insulating blanket can cut heat loss by 25% to 45% and save 4% to 9% on the average water-heating bill.

Insulating blankets are easy to install and inexpensive ($20). When dressing your tank for saving energy, be careful not to block the thermostat on an electric water heater or the air inlet and exhaust on a gas unit.

If you have a newer model that’s already insulated, don’t make the mistake of thinking you can get additional savings by adding a layer of insulation. It can block critical components and become hazardous. Check with your manufacturer.

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