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Water heaters consume much of their energy just to keep a supply of hot water ready and waiting in the tank. The heat gradually leaks out of the tank until the heater turns on again to heat the water back up. To minimize this heat loss, ready-made kits for insulating water heaters and hot water pipes are available at hardware stores and building supply stores. Your utility company may also provide these at a discounted cost or offer a rebate on your purchase. Be careful not to cover the thermostat when insulating your water heater and always follow manufacturer's instructions.
Lower the thermostats on your water heater to 120?F. Electric water heaters often have two thermostats—one for the upper heating element and one for the lower heating element. These should be adjusted to the same level to prevent one element from doing all the work and wearing out prematurely.
Here's some other ways to reduce your water heater's energy use:
- For electric water heaters, install a timer that can automatically turn the hot water off at night and on in the morning. A simple timer can pay for itself in less than a year.
- Install a heat trap above the water heater. A heat trap is a simple piping arrangement that prevents hot water from rising up in the pipes, thereby minimizing standby losses.
- Drain a quart of water from your hot water tank every 3 months. This will remove sediment that prevents heat transfer and lowers the unit's efficiency.
Credits: US Department of Energy (http://www.eere.energy.gov/consumerinfo/heatcool/hc_reducing_water_heater_energy_use.html)