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Hot Water Heater Energy Savings

In a typical American home the water heater uses more energy than any other appliance in the home except for the heating system. Depending on local energy prices, it costs a typical family of four between $400 and $600 per year for water heating. 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 $100-$300 per year at current rates. This web site offers many tips for reducing hot water usage. Here are some tips for increasing hot water energy efficiency.

Increasing Water Heating Efficiency

Set Back the Water Heater Thermostat

Some states now require that all new water heaters be set at 120°F at the time of sale. This increases the safety and energy efficiency of the heater.

If your water heater was purchased prior to 1984, it’s likely that the thermostat is set higher than this, probably between 140°F and 150°F. You should set it back if this is the case. Most people shower at a temperature of 105°F, so a setting of 120°F will still require mixing with cold water for a comfortable temperature.

Hot water temperatures greater than 120°F are not necessary and should be reduced for several reasons:

  • It can cause scalding. Children and seniors are most often scalded. Scalding occurs in: 2 seconds at 150°F, 15 seconds at 140°F, 30 seconds at 130°F, 10 minutes at 120°F
  • It causes the water heater to lose heat at a much greater rate than would occur if the temperature was kept lower; and
  • It increases the rate of corrosion on internal fittings and other surfaces.
  • By lowering the thermostat from 150°F to 120°F, energy demand is reduced by 15 percent.

Insulate Your Water Heater

Older water heaters lose heat quickly because they contain only an inch or two of fiberglass insulation (R-5). To reduce heat loss, they should be wrapped with additional fiberglass insulation.

Insulating kits can be purchased at home supply and hardware stores, and some electric utilities will install them at no charge for customers. Most have an insulating value of R-11 and will save $50-$80 per year at current rates.

Rigid foam board insulation placed under the water heater can further reduce heat loss. About two inches of extruded polystyrene board is recommended since it resists compression and does not absorb water.

Gas water heaters should be wrapped with insulation specifically made for gas water heaters. These kits are designed so that they won’t block the air intake and insulation will not come in contact with the flue. This is essential for proper functioning of the heater and to avoid a fire hazard.

Insulate Pipes

Your house is a good candidate for pipe insulation if you use water frequently throughout the day, if the pipe runs are long, or if they pass through an insulated crawlspace or basement. It is necessary to wrap hot water pipes only. Pipe insulation comes in different forms:

  • Closed-cell flexible foam tubes (R-3 to R-5);
  • Rigid foam (R-7); and
  • Fiberglass batts (R-11).

Other Water Heating Alternatives

If you have already taken basic hot water conservation measures and seek further reductions of your hot water bill, other water heating alternatives may be considered.

These include tempering tanks and demand water, heat pump, solar, and wood-fired water heaters. In general, these systems are most cost-effective in new homes or for families using greater than average quantities of hot water.

Anti Convection Valves

If the hot and cold water outlet and inlet run vertically up from the water tank, convection up these pipes causes heat loss when the tank is not being used.

To reduce heat loss, anti convection valves, essentially tiny ball check valves, can be purchased at plumbing outlets and installed on both the inlet and outlet of the water heater. You may need a plumber to install them for you. If so, wait until other plumbing work needs to be done. This will save on costs.

Water Heater Timers

Timers are not very effective at reducing energy use unless time of use (or “peak”) rate structures are in use.

Also, if the tank is well insulated, the savings from timers will be relatively small. A water heater timer might save 36 kWh per year on a well-insulated water heater. Tank insulation wraps, because they are simpler, less expensive and more effective, are a preferable means of saving energy.

Hot Water Heater Benefits and Costs

Assuming only the minimum savings of $100 per year, it would easily make sense to spend up to $400 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.

Hot Water Heater Future Trends

The standard hot water heater is a staple of the American home. Often ignored or taken for granted until they develop a problem, these devices are one of the essentials of modern life. Anyone who has ever lived in a cold climate without hot water knows the importance of a hot water heater.

Currently there is no Energy Star label for hot water heaters. It is not known if these products are slated to receive an Energy Star label in the near future.

Here are some other products that could offer energy savings:

Point-of-use water heaters

Point of use hot water heaters may offer an alternative to traditional hot water heating systems for some homeowners. These systems offer some advantages and disadvantage depending upon each individual situation.

Point-of-use water heaters are also known as “tankless” heaters because they have no (or only a tiny) storage tank. They are relatively small units that provide hot water on demand.

They use gas or electricity for fuel, and can be installed near demand points, such as under kitchen sinks. They are often more expensive than a conventional water heater, but can cost less to operate since they don’t maintain a tank full of hot water when not in use.

A point of use heater typically provides 1-2 gallons of hot water per minute. Before installing a point of use water heater in your home, make sure its reduced capacity will be adequate for your needs.

Solar water heaters

A solar water heater typically includes collectors mounted on the roof or in a clear area of the yard, a separate storage tank near the conventional heater in the home, connecting pipe, and a controller.

Solar water heaters can reduce the annual fuel cost of supplying hot water to your home by more than half. Throughout the year, the solar system preheats the water before it reaches the conventional water heater. During the summer, it may provide all the required heat.


A desuperheater is an attachment to your air conditioner or heat pump that allows waste heat from that device to help heat domestic water. In hot climates, a desuperheater can provide most of a home’s hot water needs during the summer.


Tim Caldwell