According to the CA Energy Commission (http://www.consumerenergycenter.org/home/appliances/waterheaters.html), heating water accounts for up to 25% of residential fuel costs. Electric water heaters cost approximately three to five times as much to operate than a gas water heater.
In many of the homes I visited as an energy auditor, I often found the water heater set too high–often 140 F or hotter, or Hot/Very Hot. I would ask the residents if they turned the temperature all the way to hot in the shower or other places. Often they would say no. Here’s an opportunity to save. Normally, it is recommended to set it to 120-125 degrees F or close to Warm or the middle of the range.
Other help for water heaters (primarily relating to gas water heaters unless otherwise noted):
Recirculating Pumps–If you have one on yours, consider putting it on a timer. For example, if you typically use hot water in the morning and evening, your recirculating pump doesn’t need to run all day and night. A recirculating pump typically uses 40-60 watts per hour. At $0.17/kilowatt-hour (kwh), this would cost about $5-$7 month running 24/7. Set a timer to turn it on half an hour before you get up and half an hour after you typically finish using hot water. Some timers have multiple start/stop times available to further assist in saving electricity.
If you have an electric water heater, a recirculating pump can cause the water heater to run significantly more often–EXPENSIVE! Consider a tankless, or on-demand, water heater instead (without a recirculating pump, of course).
Pipes–Wrap the outlet, or hot, pipes (i.e., those going to the house) with pipe insulation–the thicker the better. Pipe insulation helps reduce distribution losses. Insulation should fit securely along all exposed out-bound pipes. If you live in a cold climate, such as Running Springs or Idyllwild, you might consider also insulating the inlet, or cold, pipes.
Old–If your water heater makes gurgling or banging sounds, chances are pebble- to baseball-sized sediment chunks have built up. Sometimes tanks can be drained periodically to reduce the build up, but consult your owner’s manual (or the manufacturer’s website) to learn how much and how often to drain–usually five gallons or less a couple times a year can prolong the life of the unit. If the sediment is larger than the drain valve (i.e., the gurgling or banging continues after attempting to drain), or if the water heater is 10-15+ years old, and/or if there is rust along the bottom pan, consider replacing it before the bottom rusts out and causes a flood.
Backdraft–If the area around the burner is scorched, turn off the water heater until it is repaired or replaced. Backdrafting can occur for a number of reasons, such as improper venting or incomplete combustion, and is the number one cause of house fires. Always keep flammables at least three feet away from the water heater. Additionally, the water heater should be elevated at least 18″ off the ground to reduce the risk of explosion from vapors, such as from gasoline. Check local codes for your area.
Blanket–If the water heater is outside or in a cold climate, consider wrapping it with a water heater blanket. Follow the manufacturer’s directions and do not cover the thermostat (or, make access panels for electric models). Record the size, manufacturer, model number, age, and other pertinent information from the labels before covering it up.
Low-flow showerheads and faucet aerators–Save water and heating costs as well as reduce the likelihood of running out of hot water during a shower. Standard showerheads are rated at 2.5 gallons per minute (gpm), whereas low-flow models are rated as low as 1.5 gpm. Standard faucet aerators are rated at 2.0-2.2 gpm, while low-flow ones are 0.5-1.0 gpm.
Vacation–Are you a snowbird or going on vacation for a few days or longer? Turn the thermostat to Vacation (or turn off the breaker for an electric water heater) and unplug the recirculating pump if you have one. Some people make a mark at the preferred or current temperature setting so it’s easier to reset it upon return.
Tankless–Tankless, or on-demand, water heaters have numerous advantages over their storage counterparts, such as smaller space requirements, greater flexibility in locating unit, no standby losses, no heating and reheating the same water, high efficiency, and higher rebates from SoCal Gas. It’s important, though, to ensure the unit is properly sized for your household’s needs. See http://en.wikipedia.org/wiki/Water_heating for more discussion about the advantages and disadvantages of tankless water heaters.
Insta-hot–Don’t confuse tankless with an “instant” water heater. An “instant” water heater, or sometimes called “insta-hot,” has a small storage tank and is heating water all the time. These are usually under the kitchen sink and often have a separate faucet. Some coffee makers, such as Bunn models, and water coolers also heat water continuously. It usually costs less to turn off or unplug these and heat water in the microwave or an electric kettle.