When it comes to managing household energy expenses, your water heater is a key factor. Water heating typically accounts for about 14-18% of home utility bills, making it the second-largest energy expense in most households. By taking steps to improve your water heater's energy efficiency, you can reduce your energy consumption and save money on bills. Here are some practical ways to increase your water heater’s efficiency and keep costs down.

1. Lower the Temperature Setting

One of the easiest ways to improve energy efficiency is to lower the thermostat on your water heater. Most water heaters are set to around 140°F by default, but reducing it to 120°F is generally adequate for household needs. This simple change can save up to 10% on water heating costs while reducing the risk of scalding and slowing down mineral buildup and corrosion in your pipes.

2. Insulate the Water Heater Tank

Older water heater models, especially those stored in unheated areas, can lose a lot of heat to the surrounding environment, causing them to work harder to maintain a set temperature. Adding an insulation blanket to your water heater tank can reduce standby heat loss by up to 25%, which can lead to significant energy savings. Insulation blankets are inexpensive and can be found at most hardware stores. When insulating, make sure you do not cover the thermostat or burner access panels, and always follow the manufacturer’s recommendations.

3. Insulate the Hot Water Pipes

In addition to insulating the tank, consider insulating the hot water pipes as well. Insulating the first six feet of pipes from your water heater can prevent heat loss as hot water travels through the system. Pipe insulation is affordable and easy to install, making it a quick way to improve efficiency. Insulated pipes also reduce the time it takes for hot water to reach your faucets, which helps conserve water.

4. Install Low-Flow Fixtures

Reducing the amount of hot water you use can go a long way in lowering water heating costs. Installing low-flow showerheads and faucet aerators is an effective way to cut down on hot water usage without sacrificing water pressure. Low-flow fixtures reduce the amount of water flowing through your pipes, which means your water heater won’t have to work as hard or as often to heat up new water.

5. Drain the Tank Regularly

Over time, sediment builds up in the bottom of your water heater tank, especially if you live in an area with hard water. This sediment reduces the efficiency of your water heater by creating an insulating layer between the water and the heating element, making it harder for the heater to warm the water. Draining a few gallons from the tank every six months can help flush out the sediment. For optimal results, consider a full tank flush annually or every two years. This maintenance step can improve energy efficiency and extend the lifespan of your heater.

6. Consider a Timer for Electric Water Heaters

If you have an electric water heater, installing a timer can help control when the heater is on, allowing you to set it to only run during times when hot water is likely needed. For instance, if your household primarily uses hot water in the morning and evening, the timer can turn the heater off during the middle of the day and overnight, which can save energy during off-hours. This strategy is especially helpful for homes that don’t use hot water consistently throughout the day.

7. Upgrade to an Energy-Efficient Model

If your water heater is over 10 years old, it might be time to consider replacing it with a more energy-efficient model. Newer water heaters, including tankless and heat pump models, can be significantly more efficient than older ones. While the upfront cost of a new water heater may be substantial, the energy savings over time can help offset this investment. Tankless water heaters, for example, only heat water when needed, which eliminates standby heat loss, and heat pump water heaters use electricity more efficiently to move heat rather than generating it directly.

8. Perform Regular Maintenance

Regular maintenance is key to keeping your water heater running efficiently. In addition to flushing the tank, have the anode rod inspected every couple of years. The anode rod helps prevent tank corrosion, and replacing it when it wears out can extend the life of your water heater. Always check for leaks and monitor the pressure relief valve as well to ensure your heater is functioning optimally.

Increasing your water heater’s energy efficiency doesn’t have to be complicated or require water heater repair. With simple adjustments like lowering the temperature, insulating your tank and pipes, installing low-flow fixtures, and scheduling regular maintenance, you can significantly reduce your energy usage and save on monthly bills. For those with older units, upgrading to a more energy-efficient model can provide long-term savings and improved performance. By adopting these strategies, you can enjoy reliable hot water while also benefiting the environment and your wallet.