Standard Hot Water System Benefits and Costs

In typical American homes, the water heater uses more energy than any other appliance except for the heating system. Depending on local energy prices, a family of four spends between $200 and $500 per year for heating water. For many families, this represents a significant portion of their utility bills.

For most households, the energy used to heat water can be reduced by 25-50 percent through conservation. This amounts to a savings of approximately $50-$250 per year at current rates.

Assuming only the minimum savings of $50 per year, it would easily make sense to spend up to $200 improving the energy efficiency of your hot water heater. It should be possible to insulate your water heater and a substantial amount of hot water pipes for this amount of money. Reducing the temperature of the hot water tank is also an easy way to save.